A few days ago, it was reported that Huawei is actively ordering 4G smart phones and related terminal parts from suppliers. Some component manufacturers have been informed that they will resume purchasing motherboards and other components this month.

On November 24, a reporter from China first finance and economics asked Huawei for confirmation on the above news. A Huawei supplier, who did not want to be named, told reporters that new orders for 4G mobile phones have been prepared one after another. “At present, they are rolling orders in small batches, and there is no way to estimate the specific order quantity.” The Huawei supplier told reporters that according to the rhythm of market orders, the finished products of mobile phone orders at this stage are expected to go on the market in the first half of next year. Judging from the time point, it will be in the first quarter at the earliest.

Huawei did not respond to the news.

However, Huawei’s internal staff told reporters that the supply of 4G chips can solve the demand for mobile phones and tablets in most overseas regions, so as to maintain the channels in major overseas regions, retain the team and fire, and wait for the future turnover opportunity. “At present, Eastern Europe, Russia, Asia Pacific, Middle East, Africa and Latin America are still 4G markets. Some regions only provide 4G networks, and 4G products are still competitive.”

From the perspective of licensing, only Qualcomm can provide Huawei with 4G chips.

Huawei's new 4G mobile phone orders have been prepared one after another

Qualcomm has always been one of the main suppliers of Huawei chips. Its revenue consists of two parts: QCT (chip business) and QTL (patent business). With its patent advantages in CDMA and other underlying protocols, the company has long collected patents from mobile phone manufacturers.

In the fiscal year 2019 previously released by Qualcomm, QTL business revenue reached $4.59 billion. However, Huawei’s patent accumulation is also rapidly following up, so it will no longer pay the patent fee of Qualcomm from April 2017, and the cooperation between the two companies is also affected. Subsequently, the proportion of Qualcomm processors in Huawei declined rapidly from 40%, and the proportion once dropped to single digits.

It is worth noting that on November 4, U.S. time, Qualcomm said in its fourth quarter financial report that it had received $1.8 billion in patent fees paid by Huawei. Cristiano Amon, President of Qualcomm, said at the earnings conference that Huawei has created an opportunity to expand the potential market for Qualcomm’s mobile chip business (QCT). If you can get permission to sell to Huawei, it will be a completely positive opportunity.

A week ago, a spokesman for Qualcomm told reporters that “it has obtained licenses for some products (Huawei), including some 4G products.”. This means that the most difficult “chip” problem in the supply chain has been partially alleviated.

It is understood that Qualcomm has actively promoted the US government to allow it to cooperate with Huawei, seeking to re-establish cooperation with Huawei on 4G chips, mainly undertaken by Huawei Xi’an Research Institute. After this license, it is expected to increase Huawei’s supply capacity in 4G mobile phones.

Jia Mo, an analyst at canalys, told reporters that from the current situation, more companies may be able to get permission from the United States in the future to ship to Huawei again. Huawei has not given up the cooperative relationship with large-scale channels while slowing down the delivery, and its market share is expected to stabilize. After the supply chain is stable, Huawei may formulate more aggressive strategies to regain the market in the future.

However, from the current development trend of smart phones, 5g mobile phones have become the focus of market competition, especially in the Chinese market, thousand yuan 5g mobile phones are becoming popular.

At China Mobile’s 2020 global partners conference, Yang Jie, chairman of China Mobile, said that China Mobile has built the world’s largest 5gsa network, opened more than 385000 5g base stations, and completed the annual goal ahead of time; developed more than 90 million 5g end users and 130 million 5g package users.

As the price of 5g mobile phone drops rapidly, 5g mobile phone will penetrate into the market more and more quickly. Jian Qin, vice president of China Mobile, predicts that the proportion of 5g mobile phones will reach 80% in 2021, and the penetration rate of 5g mobile phones among 1000 yuan mobile phones will exceed 90% by the end of 2021. In terms of sales volume, China Mobile is expected to have a terminal market scale of more than one trillion yuan in 2021, with sales volume of more than 350 million mobile phones, including 280 million 5g mobile phones and 1 billion other intelligent hardware.

Jian Qin believes that the domestic demand for 5g mobile phones has increased, with nearly 300 million target users switching in China Mobile’s network. In October this year alone, more than 14 million mobile phones were activated in China Mobile’s 5g network.

Trendforce, a market research firm, said it expects Huawei’s global smartphone market share to fall to 4% in 2021.

Editor in charge: Tzh

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