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Why Huawei’s founder is sticking with premium smartphones even as sales decline amid US sanctions

  • Huawei founder Ren Zhengfei said that Huawei is willing to transfer 5G technology but it will never give up its terminal devices business
  • Analysts say that terminals, or connected devices, play an important role in Huawei’s long-term strategy

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Huawei will have to keep an eye on US government policies to maintain its product competitiveness and supply chain stability, say analysts. Photo: Bloomberg

Last week Ren Zhengfei, the founder and CEO of 5G technology leader Huawei Technologies Co, said the company would still be willing to “transfer” its 5G technology but will never give up its smartphone business.

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“We can transfer 5G technology, but we will never sell our terminal [devices] business,” Ren said during a media round table last Tuesday.

Ren made the statement despite sales of its smartphones – which he described as “terminal devices” because they connect to the network – being on a downward spiral since the US government introduced trade sanctions barring the company from obtaining US technology.

Just last summer, the company briefly became the world’s top smartphone seller, surpassing South Korean giant Samsung Electronics. In the last quarter of 2020, however, the smartphone maker sunk to sixth place, according to shipment figures from Canalys. Huawei is now predicted to fall to seventh place in 2021, according to research company TrendForce.

Yet Huawei already has given up some of its smartphone business. In November, it sold its Honor brand to Shenzhen Zhixin New Information Technology, a consortium of more than 30 agents and dealers. Since then, rumours have been swirling about Huawei abandoning its high-end smartphones, including the Mate and P series.
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