Chinese tech giant Huawei has announced plans for a next-generation 5G smartphone that will use its own technology instead of US components in a bid to gain a competitive edge and sidestep complaints it is a security risk.
Huawei Technologies Ltd, the leading supplier of network switching gear for phone companies, is spending heavily to develop its own chips, an area where the US dominates. That could reduce Huawei’s multibillion-dollar annual components bill and help insulate it against possible supply disruptions when US-Chinese relations are strained.
The handset, billed by Huawei as the first foldable fifth-generation smartphone, will be unveiled next month at the Mobile World Congress in Barcelona, the industry’s biggest annual event, said Richard Yu, chief executive of the company’s consumer unit.
The phone is based on Huawei’s own Kirin 980 chipset and Balong 5000 modem. The company said the Kirin 980, released in August, performs on a par with Qualcomm’s widely used Snapdragon 845.
Sales of Huawei smartphones and other consumer products rose more than 50% last year over 2017, showing “no influence” from Western security warnings, Mr Yu told reporters.
He said the consumer unit’s sales topped 52 billion dollars, or more than half of the 100 billion dollars in annual revenue the company has forecast. Huawei has yet to release 2018 results for the whole company.
“In this complicated political environment, we still maintain strong growth,” Mr Yu said.
Huawei surpassed Apple as the number two global smartphone brand behind Samsung in mid-2018. Apple and Samsung already make their own chips. Qualcomm has far more smartphone chip technology but Huawei is catching up, said Xi Wang, of IDC.
“Generally speaking, Huawei’s chips are equal to Qualcomm chips in performance,” Wang said. “Not only at the mid-level but at the high end, Huawei can compete with Qualcomm.”
Founded in 1987 by a former military engineer, Huawei has rejected accusations it is controlled by the ruling Communist Party or modifies its equipment to allow eavesdropping.
Its US market evaporated after a congressional panel labelled Huawei and its smaller Chinese rival ZTE security risks in 2012 and told phone companies to avoid dealing with them.
ZTE was nearly driven into bankruptcy last year after Washington cut off access to US technology over its exports to Iran and North Korea.
Mr Trump restored access after ZTE paid a one billion dollar fine and agreed to replace its executive team and install US-chosen compliance officers. Australia, Japan and some other governments have also imposed curbs on use of Huawei technology.