Nikkei: Huawei will cut phone production by more than half in 2021

Huawei is resolved not to sell its phone division, but it will not be easy going – the company is preparing for tough times ahead. Nikkei reports that the telecommunications giant has notified its component suppliers that it will build far fewer phones this year than it did in 2020.

Huawei will reportedly order enough components for 70-80 million for the whole year. That’s a 60% drop from the 189 million units it shipped last year, which was already a sizable decrease from the 240 million phones sold in 2019.

Nikkei: Huawei will cut phone production by more than half in 2021

The product mix will be affected as well, skewing away from the high end. The reason is that Huawei can’t source components necessary to build 5G phones, so it will have to focus on 4G devices. That doesn’t mean no 5G phones in 2021, but we’re already hearing about supply issues for the upcoming Huawei P50.

This could lead to an even bigger reduction in the total number of handsets built – down to 50 million, according to some suppliers. Honor does have broad access to vital components, so it might grow to eclipse its former parent company, but we’ll get a clearer picture at the end of the quarter.

Earlier this month President Biden’s nominee for Commerce secretary, Gina Raimondo, said she has seen “no reason” to lift the trade restrictions off Huawei, maintaining that the company poses a risk to national security.

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