Huawei to engage with smartphone partners to dodge US sanctions

Huawei to engage with smartphone partners to dodge US sanctions

Chinese tech giant, Huawei has indicated its plans on licensing its handset designs to third parties as an attempt to overcome the impacts its business faced by US sanctions.

The aim behind this move is to gain access to integral components involved in the highlighted matter, cite sources.

Under its plan, Huawei will recruit a unit of state-owned China Postal and Telecommunication Appliances Co. (PTAC) to license handset designs.

Post licensing, the company will find new sources for procurement of parts which were once prohibited under the Trump-era blacklisting.

A unit called Xnova that already sells Huawei’s Nova handsets on its e-commerce platform will offer self-branded devices developed with Huawei’s licensed designs.

Similarly, Chinese telecommunications equipment manufacturers, TD Tech will also sell several phones featuring Huawei’s designs, however under its own brand names.

The partnerships are likely to undergo variations as the negotiations remain ongoing.

Engineers at Huawei have already commenced redesigning circuits of some of the marquee smartphones that were originally made using the company’s HiSilicon chips.

The move is perceived to be Huawei’s best option to salvage its smartphones business by avoiding any further damage from the US sanctions.

For those unaware, Huawei’s business suffered as the US sanctions abandoned the company’s access to key chipmaker Taiwan Semiconductor Manufacturing Co., Qualcomm Inc.’s 5G wireless modems and Google’s Android apps.

Ever since Huawei first took the hit by the Trump administration, the company’s shrinking consumer business has witnessed drastic decline in sales for four consecutive quarters.

Huawei also sold its sub-brand, Honor nearly a year ago to a consortium spearheaded by a state-owned company in Shenzhen, relieving the company from US sanctions.

The separation now allows Honor to procure components from suppliers such as Qualcomm, said Honor’s Chief Executive Officer, George Zhao.

Sources close to the matter state that Huawei expects the recent partnerships to bring smartphone shipments, inclusive of inhouse models and the ones sold by partners, to over 30 million units by 2022.

Source Credits: https://www.bloombergquint.com/business/huawei-recruits-smartphone-partners-to-sidestep-u-s-sanctions