Due to the decline in demand for smartphones in the country in the first two months, close to the company indicated that it could reduce the price of devices from the P40 5G series, which is due to go on the market on March 26, Radio China reported.
Although key Huawei suppliers such as Qualcom and Intel have not announced plans to close proceedings so far, industry experts warn that a potential collapse could have a huge effect on the Chinese company.
Huawei and other Chinese companies may continue production in the next one or two months with the components they have as a stock, but if the spread of the virus abroad is not contained, the launch of new products may be postponed,” according to expert Fu Liang.
“In the last year, due to US restrictions, Huawei has been trying to locate as much of its production as possible, but it is still difficult to replace products provided by outside firms. As a highly globalized industry, any problem in the industrial chain can lead many others, not only for Huawei, but also for the rest of the country's smartphone manufacturers,” says Xiang Ligan, an analyst close to the telecommunications company. Another problem, in his words, could be the delay in deliveries if the situation abroad worsens. “Prices of some raw materials in the chain are already showing signs of rising because of the expanding pandemic, while inside the country — because of the highly competitive market — Huawei can reduce prices for its products and give up profits to gain customers and wider market share,” adds Xiang Ligan.
According to a report by the Japanese research institute Fomalhaut Techno Solutions, of the 1631 components for making Huawei P30 Pro, only 15 are supplied by American companies, but they form over 16% of the price. Another 869 are provided by Japanese firms and make up 23 per cent of the total cost of the phone. Chinese are 80 components, accounting for the highest value at 38.1% of the price.
Covid-19 pandemic could delay launch of new Huawei products
The launch of new products from Huawei could be delayed because of Covid-19, as spreading the virus abroad is likely to lead to disruption of international supply chains and shortages of key components that the Chinese tech giant will find it difficult to replace, according to experts.tags:
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