Huawei Denies Media Reports Its Smartphone Production Has Been Cut Back – Forbes
Huawei has come forward to flatly deny all the media reports that the company has cut down smartphone production, suspending a number of production lines at its major supplier.
The South China Morning Post was the first to report that “Foxconn, the Taiwanese electronics manufacturer that assembles handsets for many phone brands including Apple and Xiaomi, has stopped several production lines for Huawei phones in recent days as the Shenzhen company reduced orders for new phones,” citing unnamed people familiar with the matter. The reports said that it was unclear whether the scale-back was temporary or permanent.
The initial report was widely covered, including by me. But now, several days later, a company spokesperson has told me it is all untrue: “Huawei refutes these claims, our global production levels are normal, with no notable adjustments in either direction.”
The reported scaling back of Huawei production caused concern in the company given the scale of coverage the report received. The implication was that it was related to the U.S. blacklist that has seen U.S. companies hardware and software suppliers withdraw support for future Huawei devices, and ARM suspend support for the chip designs that power Huawei smartphones. This has led to endless headlines around alternatives for the Android OS and app store, as well as in-house Huawei chips.
Huawei held onto its lead over Apple for smartphone sales in the first quarter of the year, but will likely struggle to maintain that lead for the rest of the year. SCMP’s article quoted Zhao Ming, president of one of Huawei’s brands, acknowledging that the company objective of catching Samsung by the end of next year was at risk. “As the new situation has emerged,” he reportedly said, “it is too early to say whether we are able to achieve the goal.”
There has been plenty of recent speculation outside China as to the impact on new phone sales and prices as well as trade-in values since the U.S. blacklisting was announced. Most reports have suggested that sales are down, and trade-in prices have markedly reduced making upgrades more difficult for existing users. As such, reports that production was being scaled back seemed credible and unsurprising.
In the U.K., the company has also seen its flagship 5G devices pulled from the country’s first network launches. And there will be more U.K. headlines later this week, with the anticipated showdown between President Trump and Prime Minister Theresa May over the decision to allow some Huawei equipment into U.K. 5G networks. U.S. Secretary of State Mike Pompeo ramped up the pressure ahead of those talks, sending a public message to U.S. “allies and partners and friends… don’t do anything that would endanger our shared security interests or restrict our ability to share sensitive information.”