Huawei Technologies Co. Ltd. has decided to make hay out of Qualcomm, Inc.’s legal problems with Apple, Inc. by offering to sell the latter the high-speed 5G chips it needs to power its upcoming line of 5G iPhones.
Huawei founder and CEO Ren Zhengfei said his company will consider selling its 5G chips to Apple and other smartphone makers. Ren’s remarks to CNBC are astonishing because Huawei’s high-end smartphones compete directly against the iPhone and the Galaxy smartphones from Samsung.
“We are open to Apple in this regard,” said Ren in a TV interview.
The 5G chip, however, might be enticing to Apple considering its unending legal problems over patents with Qualcomm, its main chip supplier.
Apple uses modems from Qualcomm and Intel for its iPhones, but its latest phone uses only Intel-made chips. Qualcomm has a modem that supports 5G. Intel’s product isn’t expected to get to market until 2020.
This means Huawei might become a viable alternative if Apple wants to release a 5G-ready phone this year. Apple previously said it plans to release its first 5G iPhones in 2020 but is under extreme pressure to advance this date with Samsung’s release of the world’s first 5G handset, the Galaxy S10 5G, on April 5.
The U.S. federal government is bound to take dim view of having Huawei chips inside Apple iPhones since it’s proclaimed to the world over the past three years that Huawei smartphones can spy on their users and send their data to China’s intelligence services.
The U.S. continues to brand Huawei as a national security threat, and the Pentagon has banned U.S. servicemen from using Huawei phones. Huawei has repeatedly denied these allegations.
Huawei’s consumer business, which includes smartphones, became its largest division in 2018, overtaking its core networking business. Huawei released its first smartphone, the C300, in 2004. It was a cheap handset, as were those that followed it over the next few years.
Ren said Huawei’s costs were low for two reasons. “First, as our technology advanced rapidly, we managed to bring down the costs of our products. Second, thanks to the Western management approaches we brought in, our operational costs were also kept low.”
“As a result, we set our prices at a relatively low level, which made it hard for Western companies to compete with us. We have reflected on this a lot. We have raised our prices and now many people think Huawei is expensive,” he poited out.