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Huawei and Apple take hits amid US-China trade spat

The trade tensions between the US and China are affecting technology companies on both sides. Huawei has had a rough year in 2018. After facing immense scrutiny in the US over spying concerns and having been excluded from 5G development plans in several countries and then dealing with its CFO’s recent arrest, the Chinese firm took many hits this year.

While the US and its allies are reportedly shunning Huawei from their 5G plans, China is looking to help its own. Several Chinese firms are said to be offering subsidies to their employees to buy Huawei phones in order to support the troubled company. Some companies said that while considering promotions, they would give priority to employees who choose local products over iPhones.

This move is likely to hurt one of the top tech companies in the US – Apple (AAPL). Apple derives close to 20% of its revenue from China, a significant portion of which comes from iPhone sales. The Asian country is also the company’s third largest market after the Americas and Europe.

Apple already faces tough competition in China from Huawei, Xiaomi and other firms and if Chinese companies continue to persuade their employees to favor local brands, it will negatively impact iPhone sales. In order to tackle this competition and stay ahead, Apple will have to come up with the latest technologies at a faster rate for its products.

Countries that have banned Huawei from their 5G plans

Despite the challenges it has faced, Huawei has a bright spot in terms of its smartphone shipments. The company shipped over 200 million units in 2018, marking a new record. This includes 65 million units from its Nova series, 16 million units from its P20 series and 5 million units from its Mate 20 series. The company has a global market share of 14.6%.

Huawei has also indicated that it has signed deals for the rollout of 5G technology in several countries in spite of the bans it faces in many Western countries such as the US. Meanwhile, Apple’s stock fell to a new yearly low on Monday as it stood at $148.30 at market open.

 

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