Huawei banks on strong smartphone growth despite blacklist

Huawei Technologies Co. expects smartphone shipments to grow 20% next year – about the same pace as in 2019 – even if it’s blocked from the latest Google software, suggesting the Trump administration efforts to contain the company’s rise may not be working.
The world’s largest smartphone maker after Samsung Electronics Co. can rely on its massive home market and in-house software to drive a one-fifth rise in 2020 unit growth, said Will Zhang, Huawei’s president of corporate strategy. Sourcing the hardware for smartphone manufacturing wasn’t a problem because of the availability of global supply, he told Bloomberg News. Billionaire founder Ren Zhengfei later chimed in to say the Chinese giant should manage to move 240 million to 250 million devices in 2019, a rise of as much as 21% from last year.
Huawei is approaching a critical juncture in its fight for survival, six months after Washington barred it from buying key U.S. components and software without special licenses. Those include Google’s Android operating system, semiconductor design tools from Synopsys Inc. and Cadence Design Systems Inc. and radio frequency chips made by Qorvo and Skyworks. That threatens to dent Huawei’s smartphone business, which ships more than twice as many devices as Apple Inc., while impeding its ability to make fifth-generation networking gear.
Yesterday, Ren said the inability to access Google’s latest and greatest would depress sales overseas — but not so much in China, where consumers behind the Great Firewall have long been forced to seek out local content. Huawei in fact is working now on American alternatives to both software and components.
“We have mobilized thousands of people and they are working hard to address these issues,” the founder said on a panel moderated by Bloomberg Television and live-cast from Shenzhen. “I expect that next year there will be a big rise. But we don’t know about the future.”  Stephen Engle, Gao Yuan & Peter Elstrom