Why didn't Huawei give up the smartphone business despite the US ban?  - VnReview

Why didn’t Huawei give up the smartphone business despite the US ban? – VnReview

Follow SCMPRen Zhengfei, founder and CEO of Huawei Technologies Co, said in a statement last week that Huawei was ready to “transfer” 5G technology but would never give up on the phone business. clever.

Mr. Nham said in a seminar on February 9: “We may transfer 5G technology, but we will never sell Huawei’s smartphone business.”. The Huawei CEO issued this statement as the company’s smartphone sales declined steadily since the US government imposed trade sanctions on Huawei, preventing it from accessing. US technology.

Huawei is willing to transfer 5G technology but never gives up on its high-end smartphone business

Before the US tightened its bans, in the summer of 2020 alone, Huawei quickly became the world’s largest smartphone maker, surpassing South Korean smartphone giant Samsung Electronics. However, according to the statistics of the research company Canalys, in the last quarter of 2020, the Chinese smartphone maker fell to sixth place on the global smartphone market share rankings in 2021. According to predictions from research firm TrendForceHuawei may continue to drop to seventh place this year.

Before that, Huawei had to give up some of its smartphone business. In November 2020, the Chinese tech conglomerate sold its entire low-cost smartphone brand Honor to a joint venture of 30 dealers and distributors, with the participation of the Shenzhen city government. Then, at the end of January this year, Reuters reports that Huawei is in talks to sell its two high-end smartphones, P and Mate, to a Chinese alliance. However, in his recent statement, Huawei leaders announced that it would not be for Huawei to sell two high-end smartphones Mate and P series. The two smartphones are an integral part of the Chinese tech giant’s overall business, analysts commented.

Tarun Pathak, Vice President of Mobile Devices Counterpoint said: “Terminal equipment is an important part of Huawei’s growth strategy”. Pathank explains that terminals, especially smartphones, help many tech firms build strong user bases, thereby generating revenue from services and best practices for This is none other than Apple itself.

Mr. Nham describes a terminal as anything that can “connect to a person or an object”, so equipment conforming to this definition may include radar systems used in cars. Drones and Internet of Things (IoT) devices for smart homes. Bryan Ma, Vice President at Market Research IDC, said the terminal was “the jargon of the telecommunications industry” and opposed the definition of Ren Zhengfei because Huawei had connected the terminal to the network for years.

The Huawei founder describes the terminal as anything that can connect with people or things

Another proof that Huawei is still ambitious in the smartphone segment is the launch of the Harmony operating system developed by itself in August 2019, about three months after the US listed Huawei as a “entity list” it is forbidden to buy components from US companies and use Google services without government approval. In September 2020, Huawei announced that it was moving its all-phone operating system platform from Android to Harmony OS and the start of this “revolution” will be early this year.

Harmony OS is not only designed specifically by Huawei for smartphones, but it can also run on a variety of other Huawei networking devices such as tablets, computers, and smart TVs. Currently, this operating system is being used by more than 20 hardware companies. In which, traditional home appliances companies such as Midea, Joyoung and Robam Appliances have equipped Harmony operating system on products such as ovens and ventilation fans.

Additionally, in an effort to keep its business afloat as US sanctions have hampered its core business, Huawei is shifting its focus into the smart-vehicle sector. Follow SCMPAt the first stage, the company wants to fully develop the necessary digital equipment as well as the necessary software first, then start to build cars. Last October, Huawei introduced its Smart Auto Solution platform called Huawei HI, powered by Harmony OS.

Pathak said: “To maintain its connected ecosystem development strategy, Huawei needs to keep its terminal business upfront – at least in China, the world’s largest market.”. He added that if it succeeds at home, then Huawei will be able to easily enter foreign markets with the help of Harmony operating system.

However, the biggest hurdle Huawei is still facing is the severe shortage of semiconductor components caused by US sanctions. Richard Yu Chengdong, head of Huawei’s consumer business, foresaw this in August 2020 when he announced that US sanctions would make it difficult for Huawei to operate. as well as shipping high-end smartphones equipped with Kirin chips from 2021.

Huawei must monitor the policies of the US government to maintain product competitiveness and supply chain stability.

Not only smartphones, but a host of other Huawei businesses were also affected significantly. Accordingly, the shortage of semiconductors is seriously threatening the development of most of its products in its terminal business, including consumer electronics, 5G and self-driving cars. All of these products require semiconductor chips, but Huawei is currently unable to manufacture these components.

Roger Sheng, semiconductor industry analyst and vice president at a market research firm Gartner said: “I think the shortage of chips is a common problem across all of Huawei’s terminal businesses.”. Meanwhile, a Sales Manager at Quectel Wireless, a Chinese telecommunications company that uses 5G chips made by Huawei-owned chip designer HiSilicon, said: “Huawei is facing a shortage of on-chip 5G modules”.

Mr. Pathak said that Huawei must closely monitor the policies of the US government in the coming time to have a plan to maintain the competitiveness of the product as well as to keep the supply chain stable. He added: “The Huawei ecosystem is unlikely to survive if hardware sales continue to decline. If the US government has a more multilateral policy toward Chinese companies, including Huawei, then the public giant continues. This technology will have the opportunity to revive, especially to be able to continue to grow the terminal business as well as maintain the company’s operations after the semiconductor supply chain recovers..

Huawei’s annual report shows that the consumer electronics segment, including smartphones, contributes 54% of its revenue in 2019, and is the fastest growing business. However, the products Huawei defines as “terminals” do not have specific sales figures, they are instead aggregated and may include any device in the three business segments. of the company.

Industry experts commented that selling a business that is doing well does not necessarily solve problems from the US trade ban but could cost Huawei a major source of revenue. Last week, Mr. Nham Chinh Phi said: “We believe that growth in new businesses can offset the decline in smartphone sales this year.”. Currently, Huawei has been stepping up investments in new growth areas such as autonomous cars and cloud services.

Chi Ton

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