Cisco CEO Chuck Robbins says sales into the Chinese market have “dropped precipitously” amid a trade dispute between Beijing and Washington.
Playing down the impact on the company (“China is certainly not a major play for us”) he told investors on an earnings call: “Where for years we’ve sold infrastructure to the large carriers in China, what we’ve seen is…we’re being uninvited to bid.
“We’re not being allowed to even participate anymore.”
That seems a likely response to the US’s ban on Cisco rival Huawei, although the CEO did not call that out, rather emphasising a simple “trade dispute”.
Cisco China Ban: Everything is Impacted
Cisco CFO Kelly Kramer added: “We sell everything there from switches, routers all the way down through security and Meraki products. So we sell everything including collab in China and everything is being impacted.”
The comments came as Cisco reported its fiscal fourth quarter earnings, saying it has generated $51.7 billion in revenue over the past 12 months. Product revenue performance was broad based with growth in security, up 14 percent, applications, up 11 percent, and infrastructure platforms, up 6 percent.
No Major Wins from 5G
In a sober earnings report (shares fell as the company predicted revenue growth “in the range of 0% to 2% year over year” for 2020″; guidance weaker than analysts expected) Cisco said it expects little benefit any time soon from the push to 5G.
Robbins said: “I’d say we’re not modeling and don’t anticipate any significant improvement in this business in the very near term. And we’re just going to have to wait and see. It’s been a tough business for us for years.”
The official press release struck a more upbeat note: “Our Q4 results marked a strong end to a great year. e are executing well in a dynamic environment, delivering tremendous innovation across our portfolio and extending our market leadership,” Robbins was quoted as saying. “We are committed to providing our customers ongoing value through differentiated solutions, and we are well positioned to take advantage of the long-term growth opportunities ahead.”