Huawei Will Return To Smartphone ‘Throne’, Despite US Sanctions

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Huawei chairman makes a bold prediction that Chinese firm will return to a leading position in the smartphone market in the future

Chinese electronics giant Huawei has vowed to return to the smartphone ‘throne’, despite no change in sanctions against the firm from the United States.

Earlier this month, Huawei reported its largest-ever drop in revenues in the first half of 2021, in part due to the sale of its Honor smartphone brand.

The biggest decline came from Huawei’s consumer unit, which includes smartphones, and saw revenues decline by 47 percent year-on-year to 135.7bn yuan.

Huawei’s flagship P20 smartphone

Smartphone decline

Huawei sold its Honor smartphone brand following the imposition of US sanctions by the Trump administration, in order to allow the unit to continue in business as an independent company.

The US added Huawei to an export blacklist in 2019, saying it was a national security threat, making it difficult for the Chinese company to access components such as microprocessors that use US design or manufacturing technology.

“US sanctions have posed great difficulties to our business operations and day-to-day work,” said Huawei’s consumer devices chief, Richard Yu, in early August.

The sanctions mean that Huawei phones can’t work with Google software or services, forcing it to roll out its own HarmonyOS operating system and apps.

The firm was once number one in the smartphone sector, but Huawei dropped out of the top five smartphone vendors for the first time in more than seven years in the second quarter, shipping only 6.4 million units, according to Canalys.

That compares to 27.4 million units in the same quarter a year earlier, excluding Honor handsets.

Huwei also said earlier this month that its telecoms equipment business had seen a decline in revenue, which it said was due to the slow rollout of 5G in China.

However 5G sales outside of China increased, in spite of US pressure that has seen countries such as the United Kingdom and Sweden bar Huawei from their 5G networks.

Huawei has denied US claims that its equipment poses a security risk and said the sanctions are economically motivated.

Throne return

But now a Huawei executive had made a bold prediction about its smartphone fortunes.

“The biggest difficulty for us at present is on mobile phones,” Huawei Chairman Guo Ping was quoted by CNBC as saying during in a Q&A with Huawei staff.

“We know that [to produce] phones with small size and low power consumption requires advanced technology,” said Guo. “Huawei can do the design, but no one is able to help us to produce. We are stuck.”

Huawei is essentially hobbled because Chinese firms cannot manufacture the cutting-edge semiconductors it requires.

Despite this, Guo reportedly said Huawei will not exit the smartphone business.

Instead, it will work with partners in order to improve their technology which will in turn benefit Huawei as it could get access to China-produced silicon.

“Huawei will keep its existence in mobile phone sector,” Guo reportedly said. “I expect that as the capability in chip manufacturing increases, [Huawei] will return to the smartphone throne.”

“I hope the day when China is able to make chips can come sooner,” Guo said. “Until that day, the sector will exist, and we will try to retain and develop our technologies, to make sure we are able to make competitive phone.”

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Author: Tom Jowitt
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