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| Two ways Huawei can bypass competitors in 2020 |
Huawei has warned that 2020 will be the company's most difficult year, according to Light Reading, as Huawei hopes to impose new restrictions on its business in the context of the current epidemic, the new Corona virus and U.S. capacity.
In discussing Huawei's annual earnings announcement, President Xu Jiaxiang compared the use of 5G networks in Europe to 5G networks in China.
Concerning the possibility of the U.S. imposing additional restrictions on the company, which could include preventing Taiwanese semiconductor manufacturers from supplying chips to Huawei, Xu suggested that the Chinese government take countermeasures because Huawei's plan for setbacks in the 2020 reform could do so. The emergence of telecom giants brings many advantages over competitors. In the long run, business growth occurs in two ways:
Achieve greater independence in the supply chain.
Xu said the increase in R&D costs was crucial to boosting the company's supply chain due to the restrictions imposed by the US government. By the end of 2019, Huawei had managed to launch its Mate 30 smartphone without components from American suppliers, and it was only banned in the U.S. It will be implemented a few months after the program enters into force.
The company also plans to increase its research and development budget by $ 5.8 billion and increase the overall budget to more than $ 20 billion. Only two companies, Amazon and Alphabet, have invested more in research and research in 2019, as Huawei reflects today. The ability to increase spending crises in one go can bring in cheap money, helping them gain an edge over competitors primarily interested in overcoming recession.
Use 5G investment and enter the Chinese market.
Huawei's concentrated market share in China will account for 59% of the company's total sales in 2019, which will help maintain cash flow in 2020.
China reported fewer than 100 new AIDS cases a day last Thursday, indicating that infection rates in the region could slow while most other countries are still preparing for the peak of the epidemic. There is a lot of uncertainty, but Xiaomi smartphone maker says its sales have fallen by 80-90%.
Huawei's success in meeting the 2020 challenge will also put more pressure on the United States to demand that the United States strongly support Huawei's competitors, especially after the UK rejected the U.S. request for a 5G network device ban from Huawei. The American authorities are said to have considered competing with rivals like Ericsson or Ericsson. Although Nokia still appears inaccessible, Huawei's move to a more favorable position in a difficult economic situation may justify increased national support for competitors.