GUANGZHOU -- Huawei Technologies is cancelling the launch of its newest laptop, with the beleaguered Chinese tech behemoth citing the U.S. blacklist against procuring components and software.
The company was expected to announce this week the release date of the latest product in its MateBook series of laptops, anticipated to go on sale this summer. But Richard Yu, CEO of Huawei's consumer business group, told U.S. news outlet CNBC that the company is scrapping the launch of the personal computer.
"We cannot supply the PC," Yu said Wednesday, describing the turn of events as "unfortunate."
Huawei's computers are built with U.S. parts and software, such as Intel chips and Microsoft's Windows operating system. But last month, the U.S. Commerce Department placed Huawei and several affiliates on the Entity List, which bars businesses deemed to be security risks from procuring U.S.-sourced components without prior notice.
When asked if Huawei will sell the new MateBook at a later date, Yu said it "depends on how long the Entity List will be there."
Huawei, the second-largest smartphone manufacturer in the world by deliveries, entered the PC market in 2016 by launching its first notebook. But established rivals like HP and Dell in the U.S., and Lenovo Group at home, control about 90% of the PC market, leaving Huawei with just a thin slice.
Since Huawei's PC business is only a minor part of its operational profile, the MateBook cancellation's impact on earnings will be negligible. But as the first Huawei product launch terminated due to the U.S. restrictions, this latest development underscores the escalating effect the sanctions are having on the embattled company.
The U.S. ban is putting pressure on Huawei's bread-and-butter smartphone business as well. The company aims to sell 250 million units this year, up 25% from 2018, but a senior executive suggested Tuesday that there is a chance the group will downgrade that outlook.
"If there were no surprises, we would have become the largest [smartphone maker] in the fourth quarter," said Shao Yang, chief strategy officer at Huawei's consumer business group. "But now we feel this process may take a longer time."
Huawei did not immediately respond to a request from the Nikkei Asian Review for comment.