Chipmakers such as Intel, Qualcomm, Xilinx and Broadcom and smartphone OS maker Google have started cutting supply of software and components to Huawei, Bloomberg reported.
Lack of component supply from Intel, Qualcomm, Xilinx and Broadcom will result into slow production of telecom and enterprise network products at Huawei manufacturing facilities. Huawei will not be able to serve its existing telecom operator customers resulting into drop in voice and data services from mobile service providers impacting millions of phone customers across the world.
Huawei will also be in a tight situation in terms of supply of network impacting the delivery of its existing 4G and 5G orders. Ericsson, Nokia, Cisco, ZTE, Samsung, among others, will start gaining from the recent development.
Huawei has confirmed that there will be a drop in its revenue growth though the China based technology company is looking for more options to avoid the US sanctions. Top suppliers in Asia will be trying to cash in on the opportunities.
The Donald Trump administration last week added Huawei Technologies to a trade blacklist, enacting restrictions that will make it extremely difficult for the company to do business with U.S. counterparts.
Huawei’s smartphone business will lose access to updates to Google’s Android operating system. Future versions of Huawei smartphones that run on Android will also lose access to popular services, including the Google Play Store and Gmail and YouTube apps.
Huawei shipped 59.1 million smartphones in Q1 2019 vs 39.3 million in Q1 2018. Huawei captured 18 percent global smartphone market share in Q1 2019. Huawei is closing in on Samsung and streaking ahead of Apple, due to its strong presence across China, Western Europe and Africa, Strategy Analytics report said.
Linda Sui of Strategic Analytics in her blog said on Monday that Huawei is facing mounting headwinds under the US ban. This will pose a big risk in overseas markets.
Google is expected to face drop in its Android OS market share for both smartphones and tablet as the US-based technology company has suspended business with Huawei in the wake of the recent US sanction.
Huawei Technologies is the second largest smartphone maker in the world with 17.9 percent market share during the first quarter of 2019. Huawei Technologies is also the largest telecom network maker.
Huawei in a statement said it has made substantial contributions to the development and growth of Android around the world.
Huawei said it will continue to provide security updates and after-sales services to existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally.
Android is expected to grab 85 percent share in the smartphone OS market in 2018, according to IDC report. Android OS volumes are expected to total 1.41 billion by 2022 — growing at a 5-year CAGR of 2.5 percent.
The IDC report earlier indicated that Huawei relies on Google OS, as well as components from other U.S. companies like Qualcomm.
A Reuters report said Huawei Technologies will not receive hardware, software and technical services except those publicly available via open source licensing from Google, in a blow to the Chinese technology company that the U.S. government has sought to blacklist around the world.
Holders of current Huawei smartphones with Google apps, however, will continue to be able to use and download app updates provided by Google, a Google spokesperson said.