Huawei’s sales grew in 2019, but it says next year will be ‘difficult’

A top Huawei executive says the Chinese tech company had a strong 2019. But next year promises to be “difficult” as it battles a prolonged American campaign against its business.

The company estimates that sales revenue will top 850 billion Chinese yuan ($122 billion) in 2019, an 18% increase over the previous year, according to a new year’s message written by Eric Xu, Huawei’s rotating chairman.

Huawei also sold 240 million smartphones this year, a 17% jump from 2018.

“These figures are lower than our initial projections, yet business remains solid and we stand strong in the face of adversity,” he said.

Xu acknowledged that Huawei faces several challenges — including a fragile global economy and pressure from the United States, which argues that the company poses a national security threat (Huawei denies this). Washington placed the company on a trade blacklist in May, barring American companies from selling the company software and components without a license.

Those restrictions undermined Huawei’s relationships with its partners, including Google and mobile operators that sell its smartphones. Because new Huawei devices no longer have access to some critical Google services, global sales outside of China have been hurt, according to independent research.

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“We won’t grow as rapidly as we did in the first half of 2019, growth that continued throughout the year owing to sheer momentum in the market,” Xu said. “It’s going to be a difficult year for us,” he added, referring to 2020.

Xu also outlined an aggressive plan for Huawei to follow if it hopes to succeed next year, including a need to “drive the global development of 5G.”

The door has not yet been closed to Huawei in several major markets, including Germany and the United Kingdom, despite efforts by the United States to discourage its allies from using the company’s equipment in their 5G networks.

Xu also called on Huawei employees to “hone our ability to fight and cut red tape,” adding that “every one of us needs to fight inertia and rid ourselves of complacency.”

He said Huawei needs to reward high performers while removing “mediocre managers” who “have lost their enterprising spirit.” He added that managers performing in the bottom 10% will be removed each year.