Huawei crisis – contagion now hits UK distribution channel

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Blacklisting of Huawei likely to have have a ‘significant negative impact’ for the rest of the year

The Huawei crisis will have a significant negative impact on the distribution channel for the rest of the year, warns Eurostar Global head of commercial and vendor management Steve Hankey.

His comments come as the contagion of the US ban on Google updating Huawei handsets and infrastructure spreads to the UK.

“Huawei has successfully challenged the ‘duopoly’ of Samsung and Apple with a fantastic portfolio of products. This has been a breath of fresh air in the distribution landscape,” said Hankey.

“But unless recent developments are resolved, they will have a significant negative impact on the distribution/ retail model for the remainder of 2019.

“If Huawei’s issues with US and Google aren’t resolved, it will create a product vacuum in the sales channels that will need filling, possibly with the introduction of a new operating system.

“Distributors will also need to address the existing inventory in channel plus any de-commits on stock from retailers scheduled to take stock.”

Huawei distributor Westcoast says the uncertainty has already had an impact. “We’ve had some cancelled orders, as people are waiting to see how it all plays out,” said head of mobile Darren Seward. However, he said, “it’s a waiting game. We’re still confident in Huawei, which is tenacious and persistent.

“There has been a lot of investment in Huawei from operators who, like us would like to see a return on their investment. So we’re not prepared to write them off.”

Exertis is another key Huawei distributor. CEO Tim Griffin diplomatically noted: “Huawei’s products remain among the best and we’ll remain the best distribution partner. The best partnerships are forged in fire.”

Livewire Telecom distributes Huawei mobile and home broadband routers, and has kept stock levels high enough to bridge disruption to the supply chain.

Livewire boss Richard Gallant said: “The situation has brought forward closure to the life cycles of some high end products. We have enough stock to cause no disruption to orders.

“Huawei had started issuing new models in Q2, so our new range will be launched as expected. We’ve yet to see any reduction to orders on our mobile broadband and home broadband range.

Huawei has kept us up to date on the present situation.”

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