Huawei may license its smartphone designs to other companies to revive its business

• Huawei is considering licensing its smartphone designs to other companies.
• The Chinese smartphone maker is under US sanctions that prevent it from doing business with US companies.
• Huawei had sold its sub-brand Honor to a consortium of buyers in December 2020.

Chinese smartphone maker Huawei has been struggling for survival after the United States under Donald Trump banned US companies from doing business with the company in 2019.

According to a Bloomberg report, Huawei is considering licensing its smartphone designs to third parties to gain access to critical components that it is unable to access directly due to the US sanctions.

This comes at a time when the Biden administration has tightened the restrictions on Huawei. As part of new restrictions included in the Secure Equipment Act of 2021, special exceptions granted to network operators using Huawei’s equipment have been removed.

Impact of sanctions

The US action was done amid claims that the company posed a security risk and Trump signed an executive order declaring a national emergency and designated Huawei as a “national security risk”.

This resulted in Huawei being deprived of access to companies like Google, Qualcomm, chipmaker Taiwan Semiconductor Manufacturing Company and Intel among others whom it depended on for its smartphones.

Huawei is currently in talks to sell its x86 server business as US sanctions have stopped it from procuring processors from Intel.

A bid to revive its business

According to the report, Huawei is considering licensing its smartphone designs to a unit of state-owned China Postal and Telecommunications Appliances Co. (TPAC). The unit, Xnova, is reportedly already selling Huawei’s Nova branded smartphones on its e-commerce portal.

As part of the new partnership, TPAC will purchase components that Huawei is barred from acquiring and selling the smartphones under its own brand using Huawei’s designs.

Apart from TPAC, equipment major TD Tech may use Huawei’s designs to produce and sell smartphones under its own brand.

Inspired by Honor’s revival

Huawei’s sub-brand Honor was sold to a consortium of buyers led by smartphone distributor Digital China and the Shenzhen government. The company recently announced its first smartphone, the Honor 50.

The Honor 50 was launched in over 40 markets across the world and uses the Qualcomm Snapdragon 778G chipset. It runs on Android and comes with Google’s apps, something that Huawei cannot offer.

The company begins re-design process

According to the report, engineers at Huawei have already started redesigning circuits of some of its flagship smartphones that were powered by the company’s HiSilicon chipsets, enabling them to be used with Qualcomm or MediaTek chipsets.

Huawei expects partnerships with other companies to boost its smartphone shipments to above 30 million in 2021.

It will be interesting to see if Huawei is able to revive its business by licensing its smartphone designs.

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