Huawei says it's scrapping laptop launch because of US blacklisting

Key Points
  • Huawei is canceling the launch of a new Matebook laptop.
  • Richard Yu, CEO of Huawei’s consumer business, says that's a result of being on the U.S. Entity List, which restricts American firms selling products to the Chinese company.
  • Huawei’s flagship Matebook X relies on Intel chips and Microsoft software.
A Huawei logo is displayed at a retail store in Beijing, China on May 27, 2019.
Fred Dufour | AFP | Getty Images

Chinese tech giant Huawei has scrapped the launch of new laptop as a result of being effectively barred from doing business with American suppliers.

It's the first product launch the company has cancelled as a result of being put on a blacklist restricting its access to U.S. technology.

Richard Yu, CEO of Huawei's consumer division, told CNBC that the firm had formally planned to launch a new product in its Matebook series without giving a date, but it had been indefinitely put on hold.

He said that being on the U.S. Entity List, which restricts American companies from selling products to Huawei, had caused the cancellation, which was first reported by digital news outlet The Information.

"We cannot supply the PC," Yu said, adding that the situation is "unfortunate."

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When asked if the laptop could be launched at a later date, Yu said it "depends on how long the Entity List will be there." He acknowledged that, if Huawei is on the blacklist for a long time, the laptop will not be able to be launched.

Huawei relies on U.S. technology for significant parts of its consumer products. Its top-of-the-range Matebook X Pro runs Microsoft's Windows operating system and uses chips by Intel.

The telecommunications behemoth has been putting measures in place to try to mitigate the effects of the blacklisting, including reportedly stockpiling key components. It has also been working on its own operating system, which Yu told CNBC could launch as early as this year in China. Huawei does design the core processors for its smartphones, but it still relies on American technologies for other parts of the devices.

Huawei's biggest business traditionally was in selling networking equipment. But, in 2018, the consumer business, which includes smartphones, laptops and wearables, was the largest division by revenues.

While the majority of Huawei's consumer revenue is driven by smartphones, it has said it wants to become one of the biggest PC makers in the world.

Huawei's smartphones don't appear to be affected yet, but experts have warned that being blocked from accessing U.S. tech could harm the company. On Tuesday, Shao Yang, a top executive at Huawei's consumer division, said that it would take longer than expected for the company to realize its ambition of being the top smartphone player in the world. It is currently in second place — behind South Korea's Samsung.