According to a recent letter from Huawei’s founder and CEO, Ren Zhengfei, to all employees, the company needs restructuring. In his letter, he said that Huawei should “reorganize” within three to five years so that it can have an operation pattern that can cope with US sanctions. After the recent US ban on May 2019, US companies such as Google, Qualcomm, Micron and Intel stopped doing business with Huawei. Some companies in other countries also cut down their business transactions with Huawei.
Although the ban was recently relaxed, there is no official communication to that effect for now. The US government postponed its official communication to Huawei after the Chinese company released its Harmony OS. As a result, Huawei may not be able to use the Android system. In addition, Micron’s memory chips, ARM Holding’s chip design, and other American products may not be accessible.
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Although Huawei has its Harmony OS and Kirin chips, it will still face some problems if it is cut off from the US. For example, the software used for the development of Kirin chips is from an American company. It appears that Huawei needs an alternative to all the US techs that it is currently using. Nevertheless, Huawei’s smartphone business has been doing very well.
In Q1 2019, Huawei’s mobile phone shipments were 59 million smartphones, a year-on-year increase of more than 50%. Huawei is now in second place, above Apple in the smartphone shipments ranking. Huawei’s market performance is far better than market expectations. According to the latest data, Huawei’s mobile phone shipments in the first half of the year were 118 million units, a year-on-year increase of 24%. Ren Zhengfei is optimistic that its performance in the second half of the year will be better than the first.
