Huawei, the Chinese technology corporation, is planning to relaunch 5G phones as early as next year in order to avoid US penalties and restore market supremacy.
According to three people familiar with the matter, despite Washington’s prohibition on purchasing US technology for 5G telephones, the company has been working on circumventing the sanctions.
One alternative, according to two people familiar with the company’s plans, is to rebuild the smartphone without using any complex components that are prohibited. Before the US enforced limitations, Huawei used to manufacture Kirin chipsets designed by HiSilicon and manufactured by Taiwan Semiconductor Manufacturing Co.
The company is rebuilding its phones to use less complex 5G-enabled chips manufactured by Chinese companies. Less complex CPUs may have an impact on user experience, especially when compared to Huawei’s previous generations of smartphones and the iPhone 14 competitors.
Huawei, a Chinese national champion embroiled in an increasing geopolitical dispute between Washington and Beijing, is striving to reclaim market dominance after sales fell as a result of US sanctions imposed in 2019. Sales in its consumer business, which is driven by smartphones, fell by 50% year on year in 2021.
According to one person familiar with Huawei’s plans, this company cannot wait forever and must bring 5G phones back to the market as soon as possible.
American sanctions have long ago lost Huawei the industry’s top status. Their domestic market share is also decreasing.
According to two individuals familiar with the matter, Huawei is also considering collaborating on a 5G-enabled phone cover device to avoid the penalty.
Phone cases are already available on the market. Soyea Technology, a Shenzhen-listed company, designed one case with an integrated eSIM module and 5G-capable CPUs.
China Telecom, a Chinese state-owned telecom firm, began selling the phone with the covers only a few weeks after Huawei launched its Mate 50 series in September.
The firm is trying its best to appeal to individuals at a time when the consumer market is terrible, said a tech specialist in Shanghai who asked to remain anonymous for fear of repercussions.
As Beijing strives for technological self-sufficiency, commentators say Huawei’s determination to avoid US restrictions and reclaim its position as the world’s top smartphone manufacturer is of national importance.
China’s technical self-sufficiency ambition would be a potential driver in assisting Huawei to join the 5G race, says Will Wong, a Singapore-based analyst at research company IDC.
Analysts caution, however, that Huawei is at a significant disadvantage as long as US restrictions remain in place.
According to Douglas Fuller, an expert in China’s semiconductor industry, we’ll likely be in the 6G age before this is possible. It would take Huawei so long to create the supply chain it needs to pull this off from, either domestically or outside, Fuller added.
The fines have hindered Huawei’s ambitions to compete with Apple. Richard Yu, CEO of Huawei’s consumer business department, confirmed in a July media interview that the company was “the single manufacturer selling 4G phones in the 5G era, which he dubbed a joke.
Customers in China are starting to complain about Huawei’s costly devices‘ lack of 5G capabilities.
According to Michael Li, the owner of a Shenzhen repair shop, in only a week [after Huawei revealed the Mate 50], hundreds of customers have requested me to modify their Mate 50 so that it can support 5G networks.
Customers even came in their Mate 40, a previous generation Huawei 5G phone, and asked Li to switch the old phone’s chips into the new one. Of course, I can’t do it.