Huawei plans to bypass US sanctions by transferring phone design licenses to other companies

In short: The Biden administration seems reluctant to lift Trump’s ban on Huawei, so the Chinese company is now planning to license its phone models to other companies to bypass restrictions on US-made hardware and software.

At the moment, it’s no secret that Huawei’s business has suffered a series of setbacks due to US sanctions. More than two years have passed since the Donald Trump administration blacklisted the Chinese tech giant and it is no longer ranked among the world’s top phone makers. On top of that, Huawei is no longer among the top five phone manufacturers in its country.

The company has taken difficult steps to weather the storm, including developing technology solutions for more efficient pig production and spinning off the Honor sub-brand into a separate entity that is now owned and operated by a state-owned company.

According to Bloomberg reportHuawei’s next step will be to license other companies to develop its smartphones, which could allow it to bypass the Legal Entity List and gain access to American-made technology.

Huawei plans to begin licensing its developments to a division of the state-owned China Postal and Telecommunications Appliances Co. called Xnova, and the latter will try to buy the necessary hardware and software that the former is no longer entitled to purchase. This will be a continuation of the existing arrangement whereby Xnova sold Huawei-branded Nova phones in its online store, with the only difference that Xnova will now be able to use its own brand.

Another company that will soon be selling phones under its own brand based on Huawei’s designs is telecommunications equipment manufacturer TD Tech Ltd., but partnership negotiations are still underway. Meanwhile, Huawei engineers are adapting phone designs for Qualcomm and MediaTek chipsets to replace those produced by Huawei’s subsidiary HiSilicon.

With no indication that the Biden administration will remove Huawei from the list of organizations, the move could be the Chinese tech giant’s only way to stay relevant in the mobile market. Time will tell if this strategy brings any positive results, but Huawei hopes it will lead to more sales next year, perhaps 30 million units above current forecasts.

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