A few years back, Huawei was the top competitor of Samsung. In fact, it even outsold them in global smartphone sales at one point. Unfortunately, their business suffered greatly after the US put a ban on their phone sales in the US and stopped their network equipment business.
The company was hindered by the imposed restrictions, resulting in a lack of necessary equipment for its smartphone venture.
Just when everyone thought Huawei was done and dusted, the company announced it was back in business. So, should Samsung be worried?
Huawei’s Growth
Huawei recently revealed that their Q4 2022 sales were CNY 191 billion ($27.4 billion), a 7.2% growth from the same quarter last year.
According to Bloomberg’s report, Huawei’s full-year sales were around CNY 636.9 billion (around $92.3 billion), marginally up compared to 2021.
So, how did it achieve this despite slowing smartphone sales anywhere but in China?
Alternative Revenue Streams
To diversify its revenue sources, the corporation began selling patents, as well as technology and services to a variety of customers, including car companies, miners, and industrial parks.
In 2022, Huawei started collecting patent fees from Apple, Samsung, and other companies. Alan Fan, Huawei’s head of IP, said they had signed over 20 license agreements concerning connected cars, the Internet of Things, networking, and cellphones.
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“In 2022, we successfully pulled ourselves out of crisis mode. US restrictions are now our new normal, and we’re back to business as usual. The macro-environment may be rife with uncertainty, but what we can be certain about is that digitalization and decarbonization are the way forward, and they’re where future opportunities lie.”
Xu said
EUV Lithography Process
According to reports, Huawei has been researching, developing, and sourcing alternatives to US technologies and components for the past three years.
The company announced it had achieved a milestone with China’s National Intellectual Properties Administration in EUV lithography technology.
With the approval of its patent application, Huawei could produce advanced smartphone chipsets (<10nm) without relying on ASML, Samsung, or US technologies.
Sub-10nm Chips
Nevertheless, things are not so straightforward. There is no guarantee that Huawei can construct a EUV lithography machine comprising more than 100,000 parts. Constructing sub-10nm chips requires cooperation and a long supply line for any company to be successful.
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Electronic Design Automation
Recently, Huawei has devoted considerable funds to different Electronic Design Automation (EDA) companies, such as those dealing in equipment, foundry, materials, packaging and testing. It remains unclear if it will be able to produce its own 5G chips and smartphone SoCs in the future.
Google Mobile Services
Even with all this, Huawei may not be able to regain GMS (Google Mobile Services) on its mobile phones and tablets. Without GMS, a lot of people around the world may not buy Huawei phones as they won’t have access to official services such as …
- Gmail
- Google Driver
- Google Maps
- Google Pay
- Google Photos
- YouTube, which people rely on every day.
Conclusion
Samsung doesn’t need to be overly concerned at the moment; even if they successfully manufacture their own chips, customers still may prefer Samsung phones in western markets due to worries about data security on Chinese devices.
The South Korean firm should continue to develop their technologies and products so that they can stay ahead of Huawei.