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HUAWEI may have a plan in motion to sidestep the US ban
- HUAWEI may license new smartphone designs to third-party companies.
- This way, the third party can legally purchase necessary smartphone components off-limits to HUAWEI.
- According to Bloomberg, negotiations are still ongoing.
The US trade ban has no doubt crippled HUAWEI’s smartphone business in most parts of the world. As we’ve learned over the years, though, HUAWEI is not taking it lying down. There have been loopholes, which HUAWEI has been quick to exploit, such as repackaging smartphones under new names so it could continue to sell them with Google services and all the necessary hardware components.
Bloomberg reports HUAWEI is now in negotiations with third-party companies to license its handset designs in order to gain access to “critical components” that are off-limits to HUAWEI. The Chinese company is reportedly considering licensing some of its designs to a unit of China Postal and Telecommunications Appliances Co. (PTAC), who could then purchase necessary parts for its smartphones.
The specific unit of PTAC that would be licensing HUAWEI’s designs is called Xnova. Xnova already sells HUAWEI’s Nova-branded smartphones on its retail website. But if it were to take HUAWEI’s alleged offer on licensing its smartphone designs, Xnova would be able to sell Xnova-branded smartphones based on HUAWEI’s designs.
HUAWEI is in talks with licensing its designs out to Chinese telecom equipment maker TD Tech Ltd., which would also sell self-branded devices based on HUAWEI designs. Last week, a TD Tech-branded Mate 40 Pro showed itself on TENAA, suggesting an imminent launch for the phone.
Negotiations are reportedly still ongoing, according to Bloomberg. The publication’s source also claims HUAWEI expects these licensing partnerships to bring HUAWEI’s smartphone shipments to more than 30 million units next year.
Licensing its smartphone designs to third-party companies would allow HUAWEI to keep cash flowing in while sidestepping the US-sized thorn in its side. This way, HUAWEI-adjacent smartphones could still get access to important components like 5G modems, chips from TSMC, and, of course, Google’s Android apps.
Do you think the trade ban against HUAWEI needs to be tightened or loosened?
This news comes just a few days after the Biden administration signed the Secure Equipment Act, which bars the FCC from approving “any authorization application for equipment that poses an unacceptable risk to national security.” This means devices from HUAWEI and ZTE, both of which have been marked as national security risks by the US, will not receive necessary FCC approval in order to launch their devices in the United States.