Huawei phone sales rise despite US supplier licence refusals

The US government has not approved any of the 130 applications for licences to deal with Huawei, according to a report, despite promises from President Trump that such requests would be dealt with rapidly.

Earlier this year, the US Department of Commerce effectively blacklisted the Chinese mobile giant on national security grounds, preventing American firms from doing business with the company.

The ruling limited Huawei’s access to important components and to the Android operating system as well as Google applications. It is a huge blow to Huawei’s bid to gain market share in the west and overtake Samsung as the world’s leading smartphone manufacturer.

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Huawei ban

Although Huawei is building its own operating system and produces its own components (it already makes its own Kirin processors), the absence of key services like Google Maps and the Google Play Store is a huge blow in terms of the appeal of its devices in Western markets. Meanwhile, the production of components such as modems is an expensive, laborious task.

However, it has also had a significant impact on US vendors, many of whom will lose significant revenue streams if the ban persists. Of the $80 billion spent by Huawei on components last year, $11 billion was to American companies – including Qualcomm, Intel and Broadcom – who have petitioned for a relaxation of the restrictions.

The pressure appeared to have paid off, with the US confirming some vendors will be able to do business with Huawei – so long as there's no national security risk. The US Commerce department has previously confirmed it had received more than 50 applications but Reuters is now reporting the larger figure.

“The interagency process, weighing license requests concerning Huawei and its non-US affiliates, is currently ongoing,” A spokesperson told the news agency.

Growing smartphone sales

The lack of approvals highlights the ongoing uncertainty surrounding the matter. The US and China are engaged in a trade dispute with both sides trading tit-for-tat tariffs and it is thought the fate of Huawei could be included as part of any deal.

However despite its ongoing difficulties, Huawei actually increased its share of the mobile market over the past three months. Gartner says that although global sales dropped sharply after the ban, strong brand positioning and marketing saw sales in Greater China rise by 31 per cent.

In total, Huawei sold 58 million smartphones, with market share increasing from 13.3 per cent to 14.8 per cent. Samsung still leads the way however, with its 75.1 million units giving it a 20.4 per cent share  - up from 19.3 per cent last year.

The company’s most recent financials were surprisingly positive, with Huawei reporting a 23 per cent rise in revenue despite the ban. However founder Ren Zhengfei has suggested the figures are not reflective of the current situation and were aided by  sympathetic Chinese clients making payments in time.

Huawei has persistently denied any accusations of wrongdoing, while the US has never produced any evidence to support its claims that the company’s networking equipment represents a threat to national security.

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Via Reuters