US ban won’t stop Huawei’s 5G smartphone plans

• A return to the 5G smartphone market would mark a victory for the company.
• The company has been “in survival mode” for three years.
• Huawei might circumvent the US ban by producing 5G chips domestically.

From claiming the crown as the world’s largest smartphone vendor to losing it soon after because of a years-long US ban, Huawei has been on quite a ride with its handset business over the last handful of years. But now, after being stuck selling last-generation 4G handsets for the last three years, Huawei is apparently ready to set foot into the 5G smartphone space by the end of this year.

The embattled Chinese smartphone maker has gone from threatening Samsung Electronics as a number two player to dropping out of the top five in global market share. When Huawei overtook the South Korean giant for the first time in the second quarter of 2020, it also marked the first quarter in nine years in which a company other than Samsung or Apple has led the global smartphone shipment, according to Canalys.

But its peak year was 2019 when globally, Huawei shipped 240.6 million smartphones. Unfortunately, after topping the global smartphone industry, the Chinese tech giant began its descent as its smartphone business started feeling the brunt of the US sanctions that continued to stifle its growth, cutting off the company’s ability to obtain critical components for its devices. 

By the first quarter of this year, Huawei stood as only the sixth-largest smartphone brand globally, with a mere 16% market share. Of course, Huawei continued to launch devices from smartphones to smartwatches. Still, the company has struggled to sell those devices outside of China as it cannot use Android, a commonly used operating system globally. 

Huawei eventually launched its operating system, HarmonyOS, installed on 330 million devices, at the end of 2022, up 113% year-on-year. That operating system, unfortunately, failed to gain traction outside of China.

Making matters worse, the US has been on an anti-Huawei campaign, urging countries over the past few years to ban the Chinese tech giant from their next-generation 5G networks. Countries like the UK, Canada, Denmark, Sweden, Estonia, Latvia, and Lithuania have already done so, while a few others are reportedly considering banning some Huawei equipment in their 5G networks.

5G smartphones by Huawei soon?

According to research firms recently, Huawei is plotting a return to the 5G smartphone industry by the end of this year, and that means a comeback despite a US ban on equipment sales decimating its consumer electronics business.

Three third-party technology research firms covering China’s smartphone sector told Reuters that Huawei should be able to procure 5G chips domestically using its advances in semiconductor design tools, along with chipmaking from Semiconductor Manufacturing International Co (SMIC), China’s largest chipmaker.

“Returning to the 5G phone market would mark a victory for the company that for almost three years said it was in ‘survival’ mode. Huawei’s consumer business revenue peaked at 483 billion yuan (US$67 billion) in 2020 before plummeting by almost 50% a year later,” Reuters iterated.

Reuters added that one of the research firms expects Huawei to use SMIC’s N+1 manufacturing process, “though with a forecast yield rate of usable chips below 50%, 5G shipments would be limited to around two to four million units.” A second firm estimated shipments could reach 10 million units – without providing further details.

It is forecasted that Huawei could produce 5G versions of flagship models like the iPhone rival P60 this year, with new launches likely in early 2024. The three research firms said that the predictions were based on information they had received via checks with contacts in Huawei’s supply chain and recent company announcements.

A glimpse into Huawei’s 5.5G era

During the Mobile World Congress 2023, Huawei also proposed the concept of a “5.5G Era” based on an end-to-end solution that integrates comprehensive evolved technologies, including 5.5G, F5.5G, and Net5.5G. The 5.5G Era will feature 10 gigabit peak downlink speeds and gigabit peak uplink speeds to meet increasingly diverse service requirements. 

This solution would protect operators’ previous investment in 5G while improving network performance by ten times. It would also refresh the industry vision by using new technologies like passive IoT to unlock a market of 100 billion IoT connections.

5G has been in commercial use for four years. Huawei’s data shows that there are more than 260 commercial 5G networks worldwide, serving over 1.2 billion users, and there are already 115 million gigabit F5G users. 

“With service models and content continuously evolving, breakthroughs in technologies like glasses-free 3D create unprecedented immersive experiences for users. However, these new services continue to require stronger 5G network capabilities,” the company explained in a statement.

The industry has widely agreed that 5.5G will be a crucial milestone in 5G evolution, and Huawei sees it fast approaching. “5.5G is the next step forward for 5G. 5.5G will feature […] the ability to support 100 billion connections, and native AI,” it said. 

5.5g will create incredible new business opportunities with more targeted support for industrial needs in domains like IoT, sensing, and advanced manufacturing. At the 5G Advanced Forum during the Mobile World Congress 2023, Huawei also announced that it will launch a complete set of commercial 5.5G network equipment in 2024.