(Reuters) — Huawei Technologies said on Tuesday that its full-year revenue would likely jump 18% in 2019 to 850 billion yuan ($121.72 billion), lower than its earlier projections, as a U.S. trade blacklisting curbed growth and disrupted its ability to source key parts.
The world’s biggest maker of telecom network equipment and the No. 2 manufacturer of smartphones in May was all but banned by the United States from doing business with U.S. companies, preventing its access to technology like Google’s Android operating system.
The U.S. government alleges Huawei equipment poses national security risks because it could be used by the Chinese government to spy on users. Huawei has repeatedly denied that its products are a security threat.
Huawei’s rotating chair Eric Xu revealed the numbers in a New Year’s message to employees and customers, in which he also forecasted 2020 to be a “difficult year,” saying that the firm was unlikely to grow as rapidly as it did in the first half of this year.
The estimated 18% revenue growth in 2019 is less than in 2018, when Huawei’s annual revenue rose 19.5%.
The company did not break down fourth-quarter figures, but according to Reuters calculations based on its previous statements, revenue in the quarter to end December 31 rose to 239.2 billion yuan ($23.28 billion), up 3.9% from a year earlier and slower than the 27% increase it reported in the third quarter.
“The external environment is becoming more complicated than ever, and downward pressure on the global economy has intensified,” he said.
“In the long-term, the U.S. government will continue to suppress the development of leading technology — [creating] a challenging environment for Huawei to survive and thrive.”
Xu also said that Huawei shipped 240 million smartphones this year, a 20% increase from 2018. Huawei has mainly sold smartphones that were launched before the ban.
The newest Mate 30 smartphone first went on sale in September, but it cannot access a licensed version of Google’s Android operating system because of the trade curbs.
Xu said in his letter that in 2020 Huawei would “go all out” to build its Huawei Mobile Services ecosystem, which comprises services such as cloud storage and an app gallery, describing it as “the foundation of our ability to sell smart devices in markets outside China.”
The company is also developing its own mobile operating system, known as Harmony, although analysts are skeptical that the system is a viable alternative.
Huawei’s reputation was dented earlier this month after details of the dismissal and wrongful detention of a former employee went viral.
In his letter, Xu said the company would continue to remove mediocre managers and complacent employees and that it would remove managers performing in the bottom 10% every year.