Last Updated: April 21, 2021
On May 15, 2019, the US government issued an executive order banning the use of telecommunications equipment from foreign firms that may pose a risk to national security. Among others, Huawei found itself on the blacklist.
Before this ordeal, Huawei had enjoyed rapid growth and was estimated to overtake Samsung to become the world’s largest smartphone manufacturer by the end of 2019. Despite its success, its operations had always been marred by accusations questioning its business practices and ties to the Chinese government.
Although phones have become all-in-one devices nowadays, their primary function is still communication, whether through regular calls, VoIP, video calls with your friends and family, or even conference calls. Privacy during these calls is essential, and the accusations against Huawei implied that it was spying on those calls (among other types of smartphone use) and conveyed that information to the Chinese government.
The culmination happened when Huawei, along with some other Chinese companies, was put on the Entity List, banning their use of telecommunications equipment and leaving them unable to work with any companies operating in the US (e.g. Google, Qualcomm, and Intel).
This put a wrench in Huawei’s world domination plan, and almost two years later, it still hasn’t recovered from the blow.
Did Huawei Sink or Swim?
Huawei is doing its best to swim through the bad times, but it’s swimming against the tide.
Compared to its 19% growth in 2019, Huawei’s 2020 report shows a significantly stunted growth of 3.8%. Its smartphone sales also suffered a 41.1% drop, placing it in fifth place in global phone sales. The drop was caused by reduced international sales due to the negative backlash. Meanwhile, Huawei remains popular in China, where most of its revenue comes from.
Through the years following the ban, Huawei has been trying to stay afloat. Besides seriously lowering the number of their global consumers, the ban also affected their suppliers in the US and globally, forcing them to stockpile chips, diversify their providers, and eventually look into developing their chips domestically.
Striving to progress, it focused on the research and development of new and improved technologies. Huawei has also put in effort towards educating others on its (confusing) model of ownership, hoping to dissuade the world from believing in its connection with the Chinese government.
That said, Huawei’s efforts haven’t been successful. Its phones are still virtually not offered in the US, and the Biden administration doesn’t seem to plan on easing the sanctions any time soon; in fact, they seem more eager to tighten them.
Can Huawei Make a Comeback?
For the time being, it seems like Huawei will have to rely mostly on Chinese consumers for its revenue. After their own ban, the US launched a campaign against Huawei and has since convinced more countries (UK, Canada, Sweden, and Australia) to establish restrictions against the company.
All current evidence points to Huawei’s time at the top of the global telecommunications market being over, with no sign of an impending comeback.