Huawei Technologies Co, whose smartphone industry has been destroyed by US sanctions, plans to license its smartphone designs to third parties in order to secure access to necessary components.
According to Bloomberg, the Shenzhen-based tech giant is considering licensing its designs to a unit of the state-owned China Postal and Telecommunications Appliances Co., or PTAC, which would then attempt to acquire parts forbidden under the Trump-era blacklisting. The Xnova business is currently selling Huawei-branded Nova phones on its e-commerce site, and the collaboration will see it provide self-branded products based on the bigger company’s designs.
After US sanctions cut off access to key chipmaker Taiwan Semiconductor Manufacturing Co., Google’s Android software, and Qualcomm Inc.’s 5G wireless modems, the move may be Huawei’s best shot to save its smartphone industry. Since the Trump government initially criticized Huawei, its diminishing consumer sector has seen revenues tumble for four consecutive quarters.
Things have been quite terrible for Huawei after a fight between two US tech giants. During the first half of 2021, Huawei faces the biggest revenue fall in its entire history.
In the first half of 2021, Huawei’s sales dropped by about 30% to Rmb320 billion (£35.5 billion), with the greatest decline coming from Huawei’s consumer business segment, which includes smartphones, whose revenue fell by 47 percent to 135.7 billion yuan.
About a year ago, the firm sold its Honor sub-brand to a partnership managed by a state-owned enterprise in Shenzhen, removing the company from US sanctions. Honor is now allowed to purchase components from providers such as Qualcomm, according to Chief Executive Officer George Zhao. The success of that spin-off has prompted Huawei to seek additional alliances in order to sustain its consumer business.
According to one of the sources, Huawei engineers have already begun rewriting the circuitry of several flagship handsets originally powered by the company’s in-house HiSilicon CPUs so that they may adapt to Qualcomm or MediaTek Inc. processors. Huawei anticipates that the collaborations will result in smartphone shipments — including in-house models and those sold by partners – of more over 30 million units next year.