Huawei Technologies Co. lost. Last year’s landmass for Western competitors in cellular equipment markets outside China, according to an industry research firm, signaled that the U.S. campaign to curb the Chinese manufacturer is starting to take off.
Huawei’s share of revenue from the sale of wireless equipment worldwide, excluding China, fell 2 percentage points, according to Dell’Oro Group, coming in at around 20% in 2020. Huawei remained in third place behind rivals Ericsson AB and Nokia Corp. , both of which picked up market share last year, according to the research firm. Ericsson consolidated its previous market lead in China at around 35%, up 2 percentage points, while Nokia gained 1 percentage point to end the year with around 25% share.
Huawei late last year lost the crown held short as the world’s largest smartphone maker, falling to No. 5 under U.S. pressure. Now, it feels the heat in the company’s core business of selling the incoming gear to mobile networks.
A Huawei spokesman referred to an internal speech earlier this year by Ren Zhengfei, the company’s founder, in which he told employees that the company’s links with customers were “so strong as we have always been ”and“ we have kept our business, delivery, supply and networks unbroken. “
In the same speech, Mr Ren said Huawei’s revenue and profits rose last year despite the challenges. But he said we had to withdraw from some markets: “We have to dare to abandon some countries, some buyers, some products and some situations,” he said.
When Chinese sales are introduced, Huawei remains the largest wireless equipment provider in the world, and its global segment grew last year. China listed North America last year to become the largest market in the industry, according to Dell’Oro. It now represents about a third of global sales. Despite the pandemic, consumption of cellular equipment, which includes antennas and connected components, exceeded expectations in several regions and reached $ 35 billion worldwide, said Stefan Pongratz, an analyst at Dell’Oro.
Outside of China, however, Washington is contributing to the industrial movement. The Trump administration targeted Huawei, saying Beijing could lead to network spying or disruption, an argument the company has denied. With pressure from the U.S., many allies have banned or restricted the use of Huawei equipment when building next-generation 5G networks, citing national security. The new Biden administration has said they believe Huawei is a security threat and would work with friends to secure their telecom networks.
Countries that have implemented or are considering such restrictions – including Australia, the UK and several other European countries – make up more than 60% of the world’s cellular equipment market, said Mr. Pongratz. More than 25 European telecom providers have switched from Huawei to another provider in recent years, he said.
After the UK banned Huawei’s 5G equipment, for example, BT Group PLC Britain said it would replace its Huawei gear, a process they estimated would cost around $ 700 million. It signed on Nokia to become the largest infrastructure provider.
“The U.S. government’s efforts have prevented Huawei’s rise,” Mr. Pongratz said. “They’re starting to make a difference.”
Huawei’s ascent to the top of the telecommunications industry over the past decade has alarmed U.S. leaders, who said the company could outperform its main non-Chinese competitors, Ericsson and Nokia. -out of business. The concerns were so great that Attorney General William Barr said last year that Washington should consider investing in Ericsson and Nokia.
In China, Huawei’s sales rose. The company made up half of its 5G equipment orders in China last year, with smaller Chinese competitor ZTE Corp. No. 2 at 29%, said Edison Lee, telecom analyst at Jefferies. Ericsson came in at 12%. The Chinese market brings huge and reliable customers to Huawei. Some important foreign markets, notably Germany, remain open to Huawei gear.
Write to Stu Woo at [email protected] and Dan Strumpf at [email protected]