While Microsoft has only waded in the shallow end of the escalation between the US and China trade tariffs drama, its partner companies such as Huawei continue to get dealt potentially damaging financial blows.
According to a report from Bloomberg, restrictions placed on Huawei telecom equipment that results in the company being unable to sell or use any technology made by or in collaboration with US-based firms could end up putting a dent in Huawei’s smartphone sales of up to 60 million units.
As tough of a pill as it is to swallow, Huawei founder Ren Zhengfie confirmed that over the last month the company has seen a 40 percent dip in smartphone shipments abroad and after internal formulations, expects a prolonged ban could result in a loss of revenue to the tune of $30 billion over the next two years.
“We didn’t expect the damage to be this serious,” he told author-investor George Gilder and MIT Media Lab founder Nicholas Negroponte during a panel discussion in Shenzhen. “We did make some preparations, like the damaged plane I talked about. We only protected the engine and fuel tanks, but failed to protect other parts.”
While part of Huawei’s “damaged plane” is looking to insulate as much blowback as possible with the rollout of a new homespun operating system to replace its loss of access to Google’s Android OS, the technology company will still have to make due without access to the Google Play Store and arguably device crucial apps such as YouTube, Maps and Gmail.
Furthermore, Huawei may be looking to reduce further revenue losses by scrapping plans to release its upcoming flagship Honor 20 phone internationally despite the phone going on sale in parts of Europe next week.
Microsoft has yet to pile on by officially revoking licenses to Windows for the laptops and desktops Huawei sells as well, but they have been blacklisted from the companies Azure partner website and listings thus far.