Huawei is caught in the crossfire of the US-China trade war. With the US firms barred from trading with Huawei, the Chinese conglomerate faces an existential crisis: building a handset from scratch.
Huawei is the second biggest smartphone brand in the world that shipped more than 200 million handsets last year; but even for a company with such stature, making a phone from the ground up -- especially without sourcing components from the US -- is increasingly proving to be a herculean task.
Actually, let’s put Huawei aside, it is next to impossible for any smartphone vendor to operate without resorting to American technologies – well, such is the complex nature of a phone. From tiny processors to the operating system that they run, US technology companies play an existential role in a myriad of aspects that go into the smartphones.
The state of things
In the last decade, smartphone manufacturing plants have mushroomed in China, Taiwan and other Asian markets. And even as they are bandying out millions of handsets each day, it is the US companies that own intellectual property rights and design expertise on those devices, explained Faisal Kawoosa, founder and analyst at research firm TechArc.
“Our dependency on US technology firms is very high. Unlike the West, Asian and Indian companies haven’t been able to venture much into this and related segments. Essentially, Asian firms may have excelled in manufacturing and hardware, but not so much when it comes to actually designing hardware,” he added.
And it’s rather shocking. “For instance, India has one of the best space researches and an excellent record of building satellites, but the country doesn’t have the expertise to build processors. Even if these are locally developed, the industry standards set by the likes of Intel and others make them look redundant. From an achievement point of view, it makes sense. But you can’t expect a commercial implementation of these locally produced chips in the future,” he added.
Another senior analyst, who did not wish to be quoted by their name to continue healthy a relationship with various stakeholders, said, “the US firms hold all the crucial IPs. It is very difficult to develop a smartphone without their IPs. From chip-level design to 4G and 5G standards, these companies have a monopoly. For any smartphone brand to bypass this is not practical at all.”
If the Trump administration in the US and China don’t resolve their issue in the coming months, Huawei will have no choice but to explore alternatives to all sorts of things to continue its smartphone operation. But what if, say hypothetically, other smartphone brands face a similar issue in the future? Say brand X, chooses to go ahead with developing a phone without the technology sourced from the US, how can they go about it? Let’s ponder.
A small disclosure: We’ve excluded components such as the battery and accessories that are relatively readily available at disposal today and are easier to manufacture outside the US -- without violating any crucial IPs.
Display
Top smartphone display makers aren’t from the US. So this should not be difficult for our supposed brand X, as it can either side with LG, Samsung, or Toshiba for the screen. It is worth noting that even Apple uses Samsung’s display on its iPhones. In China, there is also a display firm called BOE Technology Group that can offer a helping hand. This company is said to be working on advanced OLED panels that are increasingly showing up on current-generation high-end smartphones.
Simply put, even if a US ban were in place, a phone company can easily source smartphone screens. Of course, there will be no Gorilla Glass technology to further shield those displays, but the brand X can consider Japanese AGC Inc, erstwhile known as Asahi Glass Co. Ltd., which offers similar Dragontrail display glasses.
Camera
Just like smartphone screens, none of the US companies are considered big in the camera sensor business. Some of the top smartphone camera sensor makers include Sony, Samsung, and Toshiba. Already, Sony’s IMX586 sensor has become a popular choice for smartphones’ 48-megapixel sensor. Samsung is already upping the game with an improved 48-megapixel sensor, and a new 64-megapixel sensor for phones.