Huawei Sales Growth Slumps as U.S. Sanctions Start to Bite

Huawei has seen a dramatic slowdown in sales growth as it deals with U.S. efforts to curb its business and warned of tougher days ahead, according to Bloomberg.

Revenue at the telecommunications giant increased 13% in the June quarter to 221.6 billion yuan ($32 billion), down from the 39% increase of the three months ended March. The latest results are the first since the Trump administration effectively banned U.S. companies from working with Huawei, forcing it to plug holes in its consumer business and adjust staffing levels.

Chairman Liang Hua said the supply of critical components from the U.S. hasn’t resumed, despite Donald Trump’s proclamation in June that the company would be able to buy some American technology again. For example, the U.S. government hasn’t given Google approval to supply the company with Android software.

“We don’t know when the U.S. government will make the decision on Android and when that decision will come,“ Liang said in an interview with Bloomberg Television. “If we are not able to use Android for our new smartphones, we have the ability to develop our own operating system.“

Concessions offered at the G-20 meeting in Osaka in June by President Trump aren’t making much of a difference. At the time, the president said he would allow some U.S. companies to supply technology products to Huawei provided there weren’t security concerns, but they need explicit Commerce Department approval.

In the first half, revenue rose 23% to 401.3 billion yuan ($58 billion), the company said in a statement. That compares with the 15% pace of a year earlier. Huawei wouldn’t confirm Bloomberg calculations of the second quarter sales. Huawei’s smartphone shipments for the half jumped 24% to 118 million units. Liang said sales had recovered to a level that was 80% that prior to the U.S. ban, adding that the company would not give up its overseas business because of the restrictions.