Market Insight

Huawei added to Entity List by US government on national security concerns - Impact on Global Smartphone markets

May 21, 2019


Want to learn more?
Have an expert contact you.

*** Update: The US government has eased restrictions on Huawei for 90 days in an effort to allow existing client relationships to continue largely uninterrupted. In the wake of this. Google has reversed its own decision and will resume its existing realtionship with Huawei. ***
 
Huawei has been added to the Entity List by the US Department of Commerce. Companies or persons on the Bureau of Industry and Security (BIS) Entity List are required to obtain a license before they can buy or transfer American technology. 
 
A license can be withheld on national security grounds – effectively barring Huawei from obtaining American technology, since national security concerns were the reason the DoC put Huawei, and its entities, on the list to begin with. As a result, suppliers like Google, Intel, and others, have stopped their cooperation with the company.
 
In the smartphone space, Huawei will lose access to Google’s Play Store and services ecosystem for new devices. The company retains access to Android OS, because of the open source nature of this software.
 
Existing devices and users will continue to have access to these assets, but software updates in the future will be impacted. Huawei’s shipments for the year will be lower than originally predicted. We expect Huawei’s shipments for the year to reach around 194m units, down from an earlier projection of between 240m to 250m units. If carriers in key markets, like Europe make quick portfolio adjustments, shipments can decline even further this year.

Organization
Huawei
Share facebook Twitter Google Plus Linked In Add This Contact Us