The President of Huawei's sub-brand HONOR, George Zhao has said that the company is going to launch a 5G phone during the fourth quarter of the year. Zhao did not reveal any other details regarding the upcoming device but he did say that the company will use its rich technology reserves to release a 5G-ready handset.
Zhao is confident that Huawei's expertise in the field of 5G, Bluetooth, photography, and other areas will help the company do well in the sluggish market. But then, of course, Huawei's problems go deeper than a declining smartphone market. The company has been blacklisted by the U.S. government, as a result of which numerous critical supply chain partners including Qualcomm, ARM, and Google have cut ties with it.
Tensions have been brewing up between China and the U.S. since quite some time. Back in 2012, Huawei and the fellow Chinese company ZTE were deemed a security threat by the U.S. Shortly afterward, the company began its in-house software development efforts. Later on, when Huawei's CEO Meng Wanzhou was arrested, the manufacturer read the writing on the wall and began hoarding components.
However, stockpiling components is a short term solution and hardware is almost useless unless it's backed up by software. For instance, the EDA tool provider Synopsys has stopped providing software updates to the company, as a result of which Huawei cannot work on new chip designs. Similarly, Google has also revoked the company's license, which means the future Huawei phones will not come with its apps and services. That's why it will be interesting to see if Huawei's own operating system will be ready in time for HONOR's first 5G smartphone.
Apparently, Huawei has already started laying the groundwork to replace Android with its homebrewed OS. The HONOR 20 reportedly makes use of the company's compiler Fangzhou, which claims to improve the efficiency of Android by up to 30 percent.
According to the information technology expert Wong Kam-fai, Huawei's proprietary OS will take over Android within six months in China with support from the local population. Since the company's OS will be an open platform, adaptation time will likely be slow, at least in China. However, it will be a totally different ball game outside of China.
In China, most popular Android apps are banned anyway, but consumers in other countries might be less willing to try out alternatives. Huawei's OS is expected to be similar to Android, so this might ease the transition a bit.
HONOR's target market is young, budget-conscious consumers. The brand's phones offer flagship-level features at a fraction of the cost of premium phones. That's why the company' first 5G phone will be more affordable than other 5G devices and this can attract early adopters who do not want to fork over a huge amount to enjoy the speeds offered by the next generation of wireless networks.
Before the U.S. struck, Huawei was on track to become the largest smartphone vendor in the world, with year-over-year growth in the neighborhood of 50 percent in the last quarter, according to the estimates of various analytic firms. Although times are tough right now, Zhao still expects HONOR to rake in half of its revenue from overseas markets in the future.
Given the current situation, this goal may take longer than expected. Foxconn, which manufactures phones for Huawei, has reportedly halted some production lines. This implies that the company expects demand to slide in the coming days unless the embargo is lifted. Meanwhile, HONOR has put the release of the HONOR 20 Pro on hold because of missing certifications from Google. If the situation continues, the company's sales can go down by a quarter, according to analyst estimates.