China’s Huawei Technologies says sales increased 18 per cent in 2019, in a Dec. 31, 2019 story. (Photo by THE ASSOCIATED PRESS)

Huawei sales up 18% but US pressure means tough times ahead

BEIJING — China’s Huawei Technologies said Tuesday that its sales rose a lower-than-projected 18% in 2019 and predicted tough times ahead as the U.S. moves to restrict its business.

The flash sales estimate came in an annual New Year’s message to employees. Chairman Eric Xu warned that mediocre managers would face demotion as the telecom giant and leader in 5G mobile technology focuses on survival.

“It’s going to be a difficult year for us,” he wrote, calling on the company’s more than 190,000 employees “to work hard and go the extra mile to bring their capabilities to a new level.”

No one is predicting Huawei’s demise. The unlisted company, a major maker of both mobile transmission equipment and handsets, estimated that 2019 sales would rise to more than 850 billion yuan ($120 billion).

“These figures are lower than our initial projections, yet business remains solid and we stand strong in the face of adversity,” Xu said in the letter, which was released to The Associated Press and other media.

Huawei, based in the tech hub of Shenzhen in southern China, typically releases its official and audited annual financial results in March.

Zou Zhidan, an analyst at the consulting firm Zero Power in Shenzhen, said that given Huawei’s size and the breadth of its business, it won’t face a survival crisis. Rather, it will face obstacles to progress and pressure on its rapid profit growth, he said in an email response to questions.

Zou noted that Huawei enjoys a relatively good reputation outside of the U.S. and will benefit from its leading position in the still nascent 5G market.

“The difficulties for Huawei in 2020 won’t be small, but the company has its own strengths,” Zou wrote.

The U.S. government says Huawei technology poses a security risk and has urged other countries not to buy its 5G mobile network equipment. It has also put Huawei on its entity list, blocking U.S. technology sales to the company. Huawei denies the allegation.

Calling difficulty the prelude to greater success, Xu said America’s “strategic and long-term” campaign against Huawei is an opportunity to build up some muscle and build capabilities to navigate future challenges.

“Despite concerted efforts by the U.S. government to keep us down, we’ve made it out the other side and continue to create value for our customers,” he wrote.

The five-page letter exhorts employees to hone their skills and rid themselves of complacency. Saying that survival is the company’s top priority, Xu warns that mediocre managers “who have lost their enterprising spirit” will be removed faster than before.

By The Associated Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Recollections of well-known families in Red Deer

Past and present families recognized on Family Day

Assault suspect nabbed with sawed-off shotgun

Rocky Mountain House RCMP conduct investigation

New highway to B.C. proposed

The Howse Pass shortcut to British Columbia is worth taking another look… Continue reading

Red Deer RCMP execute search warrant

Heavy police presence on Nash Street

Your community calendar

Feb. 19 A Liberation of Holland event is being held at the… Continue reading

Reader’s opinion: Here’s how Premier Kenney can build a stronger Alberta

Apparently, the UPC government has decided that most seniors should pay more… Continue reading

Tournament of Hearts veteran skip Kerry Galusha curls through pain

MOOSE JAW, Sask. — If Kerry Galusha is skipping Northwest Territories at… Continue reading

Andrew Mangiapane scores first hat trick, leads Flames over Ducks 6-4

Flames 6 Ducks 4 CALGARY — Andrew Mangiapane was front and centre… Continue reading

Mielke: Small town Alberta great place to live

There is something to be said for living in small town, Alberta.… Continue reading

Trudeau tightlipped on plan to end protests ‘quickly and peacefully’

OTTAWA — Prime Minister Justin Trudeau was tightlipped Monday about his plan… Continue reading

Red Deer Rebels end B.C. road trip with win over Prince George

Rebels 4 Cougars 2 The Red Deer Rebels finished the B.C. road… Continue reading

Bombardier to sell train unit to France’s Alstom, shedding biggest division

MONTREAL — Bombardier Inc. has reached a US$8.2-billion deal to sell its… Continue reading

Most Read