Huawei under pressure, many large groups are distancing themselves

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Huawei Store, May 22, 2019 in Shanghai (AFP / Hector RETAMAL)

Washington's decision to place Huawei on a blacklist causes a domino effect: the Japanese electronics giant Panasonic joined Thursday in the list of groups that have announced to cut off all or part of their connections with the Chinese smartphone manufacturer.

The news came the day after the announcement of four major Japanese and British operators to suspend the marketing of new Huawei models, these devices could lose much of their interest without the contribution of US technologies.

Panasonic will discontinue the supply of components, without specifying which, to Huawei and its 68 affiliated companies subject to the US government ban.

These are products made completely or partially in the United States, but the volume is low and the impact on the activity of the company will be limited, a source close to the group told AFP.

Panasonic has refused to provide details on other transactions with Huawei that are not affected by the US measure.

– Orders interrupted –

President Donald Trump decided last week to ban exports of US technology products to certain companies deemed "at risk", taking a new step in the total offensive against China.

In its focus, Huawei: Washington believes that the telecommunications giant, present in 170 countries, threatens national security because of its close ties with the Chinese government, espionage accusations that the group rejects.

Washington has granted a 90-day delay, but several groups have preferred to take the lead in the face of uncertainties that now fluctuate on Huawei products.

On Wednesday, Japanese operators KDDI and SoftBank Corp said they were postponing the launch of new models. Pioneer NTT Docomo also said "stop orders" from a Huawei phone that was planning to launch this summer.


Owning Huawei smartphones in several European countries, Canada and the United States (AFP /)

Huawei ranked fifth in Japan in 2018, far behind Apple, but up sharply with a turnover of almost 2 million units (+ 63% on an annual basis).

This is a drop of water for the Chinese telecommunications giant, the largest network provider in the world and the second largest smartphone manufacturer in the world (206 million devices sold in 2018).

– "Temporary measure" –

But his problems are not limited to Japan. The group founded in 1987 also suffered disappointment in the UK on Wednesday: operators EE and Vodafone excluded compatible Huawei 5G smartphones before their respective networks were launched in the coming weeks.

Marketing will not resume "until we have the long-term guarantee that our consumers who buy these products will be supported for the duration of the device," said EE's Director General, Marc Allera.

A Vodafone spokesman said it was "a temporary measure as long as there are uncertainties about Huawei's new 5G models".

These announcements represent new hits for Huawei after Google's Google announcement: the American giant has announced that its Android system, which equips most of the phones in the world, would no longer equip future Chinese smartphones.

As for the network, EE confirmed that it would gradually remove Huawei equipment. However, the Chinese group reported to the AFP that this abandonment by EE concerns only the most sensitive part of the 4G infrastructure.

– Asian stock market decline –

It could be added to the British ARM list. The group, which designs semiconductors used by the entire telecommunications sector, could also stop working with the Chinese giant, according to the BBC based on internal documents from the company.

"It is difficult to accurately assess the magnitude of the impact of the US ban on Huawei's business at this stage," said Hiroyuki Kubota, an independent financial analyst specializing in trade tensions between China and the United States. . "But what is clear is that his sales will be adversely affected."

However, "if Huawei accelerates the development of its operating system, given the large size of the Chinese market," it could get away with it, he says, unlike the Japanese smartphone makers who were wiped out by the Apple wave.

This upsurge in commercial tensions hit Asian markets on Thursday: at the Tokyo Stock Exchange, the Nikkei star index lost 0.82% at noon, while Chinese markets fell sharply.

nf-KH-ANB-js / mf

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