Huawei Loses Cellular-Gear Market Share Outside China
March 07 2021 - 7:29AM
Dow Jones News
By Stu Woo in London and Dan Strumpf in Hong Kong
Huawei Technologies Co. lost ground last year to Western rivals
in cellular-equipment markets outside China, according to an
industry research firm, a signal the U.S. campaign to curb the
Chinese manufacturer is starting to make an impact.
Huawei's share of revenue from selling wireless-equipment around
the world, excluding China, fell 2 percentage points, according to
Dell'Oro Group, coming in at about 20% in 2020. Huawei remained in
third place behind rivals Ericsson AB and Nokia Corp., which both
picked up market share last year, according to the research firm.
Ericsson solidified its ex-China market share lead at around 35%,
up 2 percentage points, while Nokia gained 1 percentage point to
finish the year with about 25% share.
Huawei late last year lost its briefly held crown as the world's
largest smartphone maker, falling to No. 5 under the weight of the
U.S. pressure. Now, it is feeling the heat in the company's core
business of selling the gear that goes into mobile networks.
A Huawei spokeswoman referred to an internal speech earlier this
year by Ren Zhengfei, the company's founder, in which he told
employees the company's ties with customers "were as strong as
ever" and "we kept our transactions, delivery, supply and networks
going uninterrupted."
In the same speech, Mr. Ren said Huawei's revenue and profits
increased last year despite its challenges. But he said there was
need to retreat from some markets: "We must dare to abandon some
countries, some customers, some products and some scenarios," he
said.
When Chinese sales are included, Huawei remains the world's
largest wireless-equipment provider overall, and its global share
grew last year. China eclipsed North America last year to become
the industry's biggest market, according to Dell'Oro. It now
represents about a third of global sales. Despite the pandemic,
spending on cellular equipment, which includes antennas and
connected components, exceeded expectations in multiple regions and
reached $35 billion globally, said Stefan Pongratz, an analyst at
Dell'Oro.
Outside of China, though, Washington is contributing to an
industry shift. The Trump administration took aim at Huawei, saying
Beijing could compel it to spy on or disrupt networks, a contention
the company has denied. Pressured by the U.S., many allies have
banned or limited the use of Huawei equipment in their build-outs
of next-generation 5G networks, citing national security. The new
Biden administration has said it considers Huawei a security threat
and would work with allies to secure their telecom networks.
Nations that have enacted or are considering such restrictions
-- including Australia, the U.K. and several other European
countries -- comprise more than 60% of the world's
cellular-equipment market, Mr. Pongratz said. More than 25 European
telecom providers have switched from Huawei to another supplier in
recent years, he said.
After the U.K. banned Huawei's 5G equipment, for example,
Britain's BT Group PLC said it would replace its Huawei gear, a
process that it estimated would cost about $700 million. It signed
on Nokia to become its biggest infrastructure provider.
"The efforts of the U.S. government have curbed the rise of
Huawei," Mr. Pongratz said. "They're starting to make a
difference."
Huawei's ascent to the top of the telecom-industry over the past
decade worried U.S. leaders, who said the company could send its
major non-Chinese rivals, Ericsson and Nokia, out of business. So
great were the concerns that then-Attorney General William Barr
last year said that Washington should consider investing in
Ericsson and Nokia.
In China, Huawei's sales rose. The company accounted for half of
China's 5G equipment orders last year, with smaller Chinese rival
ZTE Corp. No. 2 at 29%, said Edison Lee, a telecom analyst at
Jefferies. Ericsson came in at 12%. The Chinese market provides
Huawei large and reliable customers. Some important foreign
markets, most notably Germany, remain open to Huawei gear.
Write to Stu Woo at Stu.Woo@wsj.com and Dan Strumpf at
daniel.strumpf@wsj.com
(END) Dow Jones Newswires
March 07, 2021 07:14 ET (12:14 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Ericsson (NASDAQ:ERIC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ericsson (NASDAQ:ERIC)
Historical Stock Chart
From Apr 2023 to Apr 2024