After finishing with revenues over $100 billion — 721 billion yuan — for 2018, Huawei is expecting to drop $30 billion of revenue from its forecast due to the trade war with the United States.
“In the next two years, I think we will reduce our capacity, our revenue will be down by about $30 billion compared to forecasts,” Huawei founder Ren Zhengfei said in Shenzhen on Monday.
“Our sales revenue this year and next will be about $100 billion.”
Ren said over the next two years, the Chinese giant would look to switch out some of its technical foundations, which could hit US component makers, after which the company would become stronger.
“We are strong, I think there is no way we will be beaten to death,” he said.
Ren also confirmed that Huawei’s international smartphone shipments had dropped by 40%, but said Chinese growth is “very fast”.
On the recent sale of its subsea cable business, Ren said the decision was a not a swift one.
“We were quite successful in that business,” he said. “It’s not because we were attacked and the business went badly, and sold it.”
“We thought that’s not part of our core business that’s why we decided to sell it, and for the other businesses we will not have spin-off or sale — we might shrink our size.”
Ren claims historic IP thefts not possible
The Huawei founder brushed aside accusations of intellectual property theft by the company, saying the company has always behaved itself.
“Even if we were small, we have very strong business ethics and integrity, otherwise we cannot come to where we are today,” Ren said.
“The claims of Huawei theft of IPR, that’s not possible.”
Ren’s statement will likely draw raised eyebrows in Cisco headquarters, which sued the Chinese giant for infringing on its patents and copying its source code in 2003.
Almost a decade later, Cisco called Huawei out for stating the suit was unjustified, and challenged Huawei to release an expert report from the time of the incident.
“In fact, within a few months of filing suit, Cisco obtained a worldwide injunction against sale by Huawei of products, including our code for a Cisco-proprietary routing protocol called EIGRP, and Huawei publicly admitted that the code had been used in their products and they pledged to stop,” Cisco’s senior vice president, general counsel, and secretary Mark Chandler said at the time.
Huawei is currently facing charges in the US for allegedly stealing trade secrets from T-Mobile. The alleged activity occurred during 2012-13, and relates to Huawei’s attempts to build a robot similar to the one T-Mobile was using at the time to test mobile phones.
The US indictment related to the case alleges Huawei offered bonuses to employees for stealing information, before needing to clarifying for its US employees that such behaviour would be illegal.
“The charges unsealed today clearly allege that Huawei intentionally conspired to steal the intellectual property of an American company in an attempt to undermine the free and fair global marketplace,” FBI Director Christopher Wray said in January.
The Chinese giant has pleaded not guilty.
Speaking on Monday, Ren said although Huawei has a large number of patents, it has not been aggressive in seeking royalties from other companies.
“Over the past eight years, we were not aggressive seeking IPR royalties to companies that use our IPR, that’s because we were busy pursuing our business growth,” he said.
“We may try to get some money from those companies who use our IPR, but we will not be as aggressive as Qualcomm.”