Huawei continues to defy expectations as the firm recently generated a record $86 billion in revenue in the first three quarters of this year. A new report from the Wall Street Journal found an explanation for its unexpected success. Huawei has found a way to produce its new handsets without using any American-made semiconductors.
New Huawei Smartphones
UBS and Fomalhaut Techno Solutions recently conducted a teardown of Huawei’s Mate 30 and Y9 Prime smartphones. The study found neither handset contained components manufactured by a U.S. chipmaker. Moreover, iFixIt and Tech Insights Inc. performed their own deconstructions and found the same results.
Huawei released the elite Mate 30 in September and the budget Y9 in August. As such, the firm’s ability to source new components for its equipment post-ban is remarkable. Indeed, the company’s employees’ ability to perform in the clinch is likely what led to their receiving $286 million in bonuses.
Notably, the Chinese telecommunications company spent $11 billion on semiconductors and software to power its mobile devices in 2018. At that time, it counted Intel, Google, Microsoft, and Broadcom among its suppliers. Also, Huawei eventually resumed trading with Micron and Qualcomm after finding exemptions to the Commerce Department’s blacklisting.
In light of the device teardowns, it seems Huawei used American components for its older hardware.
With its proven ability to procure chips without U.S. sources, the firm should have no problem maintaining its dominance of the Chinese smartphone segment. However, it may struggle to retain market share in critical sectors like Europe, the Middle East, and Southeast Asia. While the Chinese government blocks many Google Web Services (GWS), the corporation’s international customers depend on them.
Huawei’s Homegrown Mobile Operating System
While Huawei has defied the odds in finding non-US chip suppliers, it’s been less successful in finding an Android alternative. Notably, a generic option doesn’t exist; 90 percent of the world’s smartphones run either Google or Apple mobile operating systems (OS). As such, the company development of a homegrown handset OS hasn’t been smooth.
The corporation launched its new framework in August, but only on its Honor Vision smart TV. The firm has yet to deploy the platform on any of its smartphones. It shipped the Mate 30 and Y9 with forked, non-interoperable versions of Android. The company is holding off because it can’t provide the robust app ecosystem buyers expect from their devices.
Last month, The Information reported Huawei insiders are concerned about the conglomerate ability to remain competitive internationally without GWS. Subsequently, Zhengfei indirectly refuted those claims by noting his company would supplant Samsung’s the world’s largest handset provider without Google. He also explained his firm has “large scale” plans to mainstream Harmony.
It’s worth noting, the company has already dedicated $1.5 billion to build out its developer platform. However, the firm is facing an uphill battle to convince small and large application makers to devote resources to retrofitting their products for one brand. Conversely, it also has to convince consumers to buy pricy handsets that lack Gmail, YouTube, and Google Maps apps.
That said, if any smartphone manufacturer can overcome seemingly insurmountable odds a second time, it’s Huawei.