January 24, 2019 / 3:47 AM / 6 months ago

UPDATE 2-China's Huawei eyes smartphone supremacy this year after record 2018 sales

* Bullish forecast contrasts with Apple, Samsung

* Forecast comes as global market contracts

* Huawei’s consumer biz overtakes carrier biz for first time

* Plans to introduce 5G foldable smartphone with own chip in Feb (Adds executive quotes, context)

By Cate Cadell and Sijia Jiang

BEIJING/HONG KONG, Jan 24 (Reuters) - China’s Huawei Technologies Co Ltd on Thursday said it could become the world’s biggest-selling smartphone vendor this year even without the U.S. market and as global scrutiny of the firm intensifies.

The bullish forecast contrasts with those of market-leader Samsung and other rivals such as Apple Inc, both of which have flagged weakening sales in China - the largest smartphone market where demand has long been slowing, and where economic growth is at its lowest pace in nearly three decades.

It comes as the United States and its allies restrict market access for Huawei, alleging its products could be used by China for espionage. Huawei has said the allegation is unfounded.

Meanwhile, the firm’s chief financial officer - the founder’s daughter - has been arrested in Canada in relation to U.S. sanctions violations. Huawei has denied wrongdoing.

“Our customers have trust and confidence in us,” Richard Yu, Huawei’s consumer division chief, said at a new-product news conference in Beijing. “It’s only politics guys which are trying to put pressure on us.”

The maker of telecommunications equipment, spanning aerials to handsets, reported a 50 percent jump in consumer business revenue last year to in excess of $52 billion. It said it aimed to keep the momentum with the launch next month of a foldable smartphone powered by its new fifth-generation (5G) chipset.

The jump meant the consumer business accounted for 48 percent of total revenue, contributing more than Huawei’s business for telecoms network providers for the first time.

“Even without the U.S. market we will be number one in the world,” Yu said, referring to Huawei’s smartphone division, which shipped 208 million handsets last year. “I believe at the earliest this year, and next year at the latest.”

Worldwide smartphone shipments likely fell 3 percent last year, returning to low single-digit growth this year and through 2022, when 5G mobile network technology is likely to give the industry a boost, showed forecasts from consultancy IDC.

Yu said Huawei will launch the foldable phone at the Mobile World Congress next month with sales beginning in April at the earliest. He said its Balong 5000 chipset, a rival to Qualcomm Inc’s Snapdragon X50, is the world’s most powerful 5G modem and can be used in vehicles. The modem is also the first to support countries’ differing 5G architecture, Huawei said.

Huawei uses its own chipsets in its high-end phones and servers but said it does not intend to become a standalone chip vendor to rival the likes of Qualcomm and Intel Corp.

Huawei also introduced a 5G base station chipset, dubbed Tiangang. Carrier business chief Ryan Ding said Huawei has won 30 5G contracts, including 18 in Europe, nine in the Middle East and three in the Asia-Pacific region.

Reporting by Sijia Jiang in HONG KONG and Cate Cadell in BEIJING; Editing by Christopher Cushing

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