It’s been quite a while since I wrote about Huawei. At one point they were sort of a perennial punching bag at this blog, an easy villain who couldn’t really fight back. I first learned about Huawei about eight years ago when Sprint was being tossed around like a volleyball. Those were some dark times for this blog, I’ll say that. We almost got consumed by that story.
Huawei is selling its smartphone business
According to a report by the Associated Press (link goes to the Houston Chronicle) Huawei is attempting to sell off its Honor phone line to a consortium of other Chinese businesses. This would separate the phone and network equipment parts of the business and hopefully allow Honor phones to be sold in much of the world.
Huawei phones, once the free phone of choice for carriers like AT&T and Verizon, have fallen out of favor because of accusations from the US and other governments. While all Chinese companies are tied to the Chinese government at some level, it’s believed that Huawei has operated as a de facto part of the Chinese military, potentially spying on communications traffic through its network backbone equipment.
Will it make a difference?
If Huawei sells its phone business, the new owner will have to prove that the hardware is safe and free of malware and spyware. That probably means a new generation of phones. That also means a large investment from the new owner in manufacturing and design, and several years of research and development. Even in the best possible case, phones that could potentially meet global needs would be years away.
In the meantime, the new company would still be prohibited from using Google’s Android operating system or any of its apps. This is what has driven Huawei from the global market. There’s been a ban on selling any US technology to Huawei and that includes Android.
So in the end I think this won’t make a difference. I think the smartphone market moves so fast that four years away from global sales will simply do Honor (or whatever the new company calls it) in. I do think it will take that long before new products can come to the US.
What about Huawei’s network business?
Without the smartphone business, Huawei can only focus on network backbone equipment. It’s still popular in some parts of the world. Most countries aligned with the US and Europe have outlawed it because of security concerns. So, it’s hard to know that Huawei will even survive.
The corporate world in China is very different from that of the US, though. The likely move here is that Huawei will rebrand itself or disguise itself. Regulators all over the world will be looking at new hardware from new companies. It may well be disguised Huawei hardware. They’ll have to be vigilant and careful.
In the meantime, things in the US won’t change much. Cell carriers barely missed a step when Huawei phones were taken off the market. I don’t think they’re really worried.
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