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TAIPEI – China's Huawei Technologies Stores Components and Seeks Broadening of Vendor Network to Seamlessly Launch Its Largest Ever-Launched Smartphone, Despite the Shocking Trade War Between the United States and China .
The company is expected to unveil its new offerings – including a 5G compatible foldable handset – on the eve of the Mobile World Congress, the largest event in the mobile network sector in the world, which begins Monday in Barcelona.
Foldables and 5G will likely be major themes at MWC while Chinese companies such as Huawei, ZTE, Xiaomi and Oppo present their latest developments in these areas and aggressively develop their footprints overseas.
Huawei, the world's third-largest maker of smartphones just behind Apple, is expected to unveil Sunday its latest high-end phone P30, as well as its first experimental smartphone with 5G capacity and a foldable organic light-emitting diode display. challenge to the market leader Samsung Electronics.
While many other smartphone manufacturers are apparently reducing their orders due to a general slowdown in the industry, Huawei seems to be doing the opposite. Camera lens vendors Sunny Optical and Largan Precision saw Huawei's orders increase 30 percent over the previous year, sources told the Nikkei Asian Review. The smartphone maker would have incorporated more advanced features to the camera in its new handsets.
Novatek, the world's largest supplier of display integrated circuits, Chunghwa Precision Test Tech, which provides core processor testing services, and Goodix's fingerprint chip designer have all seen Huawei's demand grow since the end of the decade. last year, despite the general decline of the smartphone market in 2018, Nikkei also learned.
According to sources close to Huawei's projects, the company has also asked its procurement team to explore more potential suppliers than in recent years.
"Previously, Huawei was only working with the major vendors used by Apple, but now it is more willing to qualify more vendors to give themselves buffers and alternatives if it had to be banned one day from the use of American-made components, "said a familiar source. with Huawei's internal strategy said.
In January, lawmakers in Washington introduced a bill to ban chip exports to Chinese companies that violate US export controls and sanctions, citing Huawei and ZTE. This follows steps taken by the US to tighten controls on the export of advanced technologies to China, including microprocessors and artificial intelligence.
Hon Hai Precision Industry, better known as Foxconn, is also busy assembling the Chinese giant's technology handsets, as well as its network equipment. This activity could partially offset the disappointing iPhone demand, Nikkei told sources close to the situation.
The year 2019 could be a pivotal year for Huawei, as many market watchers predict that it will overtake Apple for the first time as a second smartphone maker.
Huawei also plans to showcase its latest 5G network solutions at the event, which is priced on average 30% lower than its smaller competitors, Ericsson and Nokia. Huawei is one of the world's leading telecommunications equipment manufacturers, accounting for about 28 percent of the global market last year, but the United States has made a concerted effort to close its technology to Western and other markets. The company sees the MWC as an opportunity to engage with global operators and possibly counter this campaign.
"We have already signed 30 commercial contracts, including 18 in Europe," said Yang Chaobin, president of Huawei's 5G product line, at a press conference ahead of the conference.
The 5G wireless communication standard promises faster data transfers with low latency, paving the way for autonomous driving, live streaming, remote surgery, and other innovations.
Despite US pressure to exclude Huawei, allies such as the United Kingdom and Germany have indicated that they may not be able to ban Chinese society from their markets.
At the same time, Huawei is taking steps to protect its operations against trade tensions with the United States and to dispel supplier fears.
The company has invited the leaders to visit its campus during the last Chinese New Year holiday to show them how its engineers worked day and night to prepare for the launch of new products, said people familiar with the subject. Most of its supply chain is made up of leading electronic component manufacturers, and Huawei is keen to demonstrate its commitment to its new products and trust, sources told Nikkei.
"I was a little worried when I found that many countries were considering blocking Huawei at the request of the United States," said one of the leaders who performed the tour. "But my personal experience there has been meeting a group of talented engineers who have shown incredible passion and confidence in their work."
Many other Chinese technology companies are also seeking to generate MWC interest.
ZTE, number two in China's telecommunications equipment, plans to return to the event. This will be the company's first international trade show, forced to shut down for several months and reshuffle its management after the US has accused ZTE of violating Iran's sanctions and banning it from being used. American technologies.
ZTE, like Huawei, plans to unveil a 5G smartphone in Barcelona. It will hold a 5G summit Monday to promote its network equipment business, with leaders of chip makers Qualcomm and Intel, as well as key operators such as Telenor (Norway) and Telkomsel (Indonesia), among the guests. However, according to IDC, the market share of its smartphones increased from 2.3% in 2017 to 0.7% in 2018, due to the ban on the United States. Its share of the telecom equipment market has also almost halved, reaching about 7% in 2018 compared to a year ago.
"For the telecommunications equipment sector, the Chinese government will at least help ZTE secure certain contracts in the domestic market (…) .We therefore expect that it will at least resume actions this year" said Remus Hsu, an analyst at Market Intelligence & Consulting Institute. "At the same time, it will also target certain regions, such as Southeast Asia, on which America hardly has a say."
Xiaomi, the world's 4th largest smartphone maker, is known for its more affordable products and its wide range of connected devices, including wearable devices and smart speakers. The company debuted at the MWC show at the 2018 event and entered European markets such as France, the United Kingdom, and Italy that year. In Barcelona, he will unveil the international edition of his new Mi9 and a 5G edition of his Mix 3. The co-founder and CEO, Lei Jun, said on a blog this year that Europe will be "the center of interest "of his company while it is growing globally.
In January, co-founder and president Lin Bin released an online video showing a prototype phone that can be folded into three, turning it into a compact phone. The company has not announced an official launch date for a foldable handset.
Oppo, the world's No. 5 smartphone maker, will kick off its appearance at the MWC with a demonstration of its camera and 5G technology, but does not plan to announce new ones. devices. Oppo confirmed that it would introduce a 5G phone this year and has filed patents for this technology but, like Xiaomi, he did not specify when.
Huawei and Xiaomi were the fastest-growing smartphone providers in the European market between October and December, with shipments increasing by 56% and 62% respectively over the year, according to the consulting firm. Canalys. "The US administration is pushing Chinese companies to invest in Europe in the United States," said Ben Stanton, an analyst at Canalys. "Brands like Huawei and Xiaomi offer competitive prices that have astonished their rivals while they were using their size against the smallest brand in Europe." For the whole of 2018, Chinese suppliers as a whole have seen their share of the European market increase by 27%, announced the research company.
Huawei has not responded to Nikkei's request for comment.
Editor Nikkei Lauly Li in Taipei contributed to the report.
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