Huawei has responded to the U.S. government’s decision to extend restrictions against the company during its annual Global Analyst Summit. Responding to a question about the impact of the new changes on its consumer business, Huawei’s rotating chairman Guo Ping said:
“The priority for Huawei is to seek survival. Survival is the key word for us, at the moment.”
Huawei also issued an official statement on the rule changes, which it called, “a relentless pursuit to tighten the stranglehold on our company,” and one which “completely ignored the concerns of many companies and industry associations.” The statement in its entirety was read out during the keynote and subsequently published on its official Twitter account.
Media Statement on Foreign Direct Product Rule Changes Made by US Government. pic.twitter.com/r7YH3rirf3
— Huawei (@Huawei) May 18, 2020
The U.S. government issued new restrictions against Huawei on May 13, almost one year after it first added the company to the Entity List, which stopped U.S. companies from doing business with Huawei. Ping said it is still studying the impact of the new alterations. He admitted the company would be impacted, but said it is confident about finding solutions to the new challenges soon.
Business impact
The continued pressure is already impacting Huawei’s business. Ping said that over the past year the restrictions have created a $12 billion revenue gap, and made it more difficult for the company to win commercial contracts. The alterations made recently will make it harder for Huawei to source more products and components, and while it can design and produce some of them itself, it is not capable of making everything, prompting Ping to say survival is key.
During the question-and-answer session following the keynote, state-owned media company China Central Television (CCTV) asked Ping how Huawei had responded over the past year, and what was predicted for the year ahead.
“It was a difficult and challenging year for Huawei,” Ping replied. “We experienced a chaotic period of time. Due to the extreme limitations we increased investment in research and development (R&D). Luckily we have won the trust of most partners and employees, and have gained experience. We are confident we can find solutions.”
Data presented by Huawei highlights just how much has effort gone into finding these solutions already. Last year it increased spend in R&D by almost 30%, selected alternative sources for materials, rewrote 60 million lines of code, and ultimately invested a dizzying 15,000 man years of time in its efforts to continue its business.
One such project is Huawei Mobile Services (HMS). This is used on Huawei’s latest smartphones in place of Google Mobile Services, and includes the Huawei App Gallery instead of the Google Play store for access to apps. Huawei has accelerated work on HMS over the past year and said at the end of the last quarter that 1.4 million developers were now in the ecosystem.
Global cooperation under attack
Throughout his keynote presentation, Guo Ping talked about the importance of standards adoption and open source in mobile technology, while also commenting on the dangers of fragmentation and restrictions on the tech industry in general. He commented on the ongoing situation, saying:
“We have noted that foundations of trust and global collaboration are under attack. Cooperation is being hindered, and the U.S.’s moves against leading tech companies in other countries will in the long run shake other countries confidence in using American technology, escalate conflict in global industry, and ultimately hurt U.S. interests. Though being suppressed, Huawei will never be closed off, but more open than ever.”
Huawei has recently launched its latest flagships smartphones, the P40 Series, including the P40 Pro, which is the first widely available P Series phone to come without Google Services installed.
