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Jolla hits profitability ahead of turning 10, eyes growth beyond mobile
Jolla, the Finnish startup behind the Sailfish OS, which formed almost a decade ago when a band of Nokia staffers left to keep the torch burning for a mobile Linux-based alternative to Google’s Android, announced today it’s hitting profitability.
The mobile OS licensing startup describes 2020 as a “turning point” for the business — reporting revenues that grew 53% YoY, and EBITDA (which provides a snapshot of operational efficiency) standing at 34%.
It has a new iron in the fire too now — having recently started offering a new licensing product (called AppSupport for Linux Platforms) which, as the name suggests, can provide Linux platforms with standalone compatibility with general Android applications — without a customer needing to licence the full Sailfish OS (the latter has of course baked-in Android app compatibility since 2013).
Jolla says AppSupport has had some “strong” early interest from automotive companies looking for solutions to develop their in-house infotainment systems — as it offers a way for embedded Linux-compatible platforms the capability to run Android apps without needing to opt for Google’s automotive offerings. And while plenty of car makers have opted for Android, there are still players Jolla could net for its “Google-free” alternative.
Embedded Linux systems also run in plenty of other places, too, so it’s hopeful of wider demand. The software could be used to enable an IoT device to run a particularly popular app, for example, as a value-add for customers.
“Jolla is doing fine,” says CEO and co-founder Sami Pienimäki. “I’m happy to see the company turning profitable last year officially.
“In general it’s the overall maturity of the asset and the company that we start to have customers here and there — and it’s been honestly a while that we’ve been pushing this,” he goes, fleshing out the reasons behind the positive numbers with trademark understatement. “The company is turning 10 years [old] in October so it’s been a long journey. And because of that we’ve been steadily improving our efficiency and our revenue.
“Our revenue grew over 50% since 2019 to 2020 and we made €5.4 million revenue. At the same time the cost base of the operation has stabilized quite well so the sum of those resulted to nice profitability.”
While the consumer mobile OS market has — for years — been almost entirely sewn up by Google’s Android and Apple’s iOS, Jolla licenses its open source Sailfish OS to governments and business as an alternative platform they can shape to their needs — without requiring any involvement of Google.
Perhaps unsurprisingly, Russia was one of the early markets that tapped in.
The case for digital sovereignty in general — and an independent (non-U.S.-based) mobile OS platform provider, specifically — has been strengthened in recent years as geopolitical tensions have played out via the medium of tech platforms; leading to, in some cases, infamous bans on foreign companies being able to access U.S.-based technologies.
In a related development this summer, China’s Huawei launched its own Android alternative for smartphones, which it’s called HarmonyOS.
Pienimäki is welcoming of that specific development — couching it as a validation of the market in which Sailfish plays.
“I wouldn’t necessarily see Huawei coming out with the HarmonyOS value proposition and the technology as a competitor to us — I think it’s more proving the point that there is appetite in the market for something else than Android itself,” he says when we ask whether HarmonyOS risks eating Sailfish’s lunch.
“They are tapping into that market and we are tapping into that market. And I think both of our strategies and messages support each other very firmly.”
Jolla has been working on selling Sailfish into the Chinese market for several years — and that sought-for business remains a work in progress at this stage. But, again, Pienimäki says Jolla doesn’t see Huawei’s move as any kind of blocker to its ambitions of licensing its Android alternative in the Far East.
“The way we see the Chinese market in general is that it’s been always open to healthy competition and there is always competing solutions — actually heavily competing solutions — in the Chinese market. And Huawei’s offering one and we are happy to offer Sailfish OS for this very big, challenging market as well.”
“We do have good relationships there and we are building a case together with our local partners also to access the China market,” he adds. “I think in general it’s also very good that big corporations like Huawei really recognize this opportunity in general — and this shapes the overall industry so that you don’t need to, by default, opt into Android always. There are other alternatives around.”
On AppSupport, Jolla says the automative sector is “actively looking for such solutions,” noting that the “digital cockpit is a key differentiator for car markers — and arguing that makes it a strategically important piece for them to own and control.
“There’s been a lot of, let’s say, positive vibes in that sector in the past few years — newcomers on the block like Tesla have really shaken the industry so that the traditional vendors need to think differently about how and what kind of user experience they provide in the cockpit,” he suggests.
“That’s been heavily invested and rapidly developing in the past years but I’m going to emphasize that at the same time, with our limited resources, we’re just learning where the opportunities for this technology are. Automotive seems to have a lot of appetite but then [we also see potential in] other sectors — IoT … heavy industry as well … we are openly exploring opportunities … but as we know automotive is very hot at the moment.”
“There is plenty of general Linux OS base in the world for which we are offering a good additional piece of technology so that those operating solutions can actually also tap into — for example — selected applications. You can think of like running the likes of Spotify or Netflix or some communications solutions specific for a certain sector,” he goes on.
“Most of those applications are naturally available both for iOS and Android platforms. And those applications as they simply exist … the capability to run those applications independently on top of a Linux platform — that creates a lot of interest.”
In another development, Jolla is in the process of raising a new growth financing round — it’s targeting €20 million — to support its push to market AppSupport and also to put toward further growing its Sailfish licensing business.
It sees growth potential for Sailfish in Europe, which remains the biggest market for licensing the mobile OS. Pienimäki also says it’s seeing “good development” in certain parts of Africa. Nor has it given up on its ambitions to crack into China.
The growth round was opened to investors in the summer and hasn’t yet closed — but Jolla is confident of nailing the raise.
“We are really turning a next chapter in the Jolla story so exploring new emerging opportunities — that requires capital and that’s what are looking for. There’s plenty of money available these days, in the investor front, and we are seeing good traction there together with the investment bank with whom we are working,” says Pienimäki.
“There’s definitely an appetite for this and that will definitely put us in a better position to invest further — both to Sailfish OS and the AppSupport technology. And in particular the go-to market operation — to make this technology available for more people out there in the market.”
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MWC 2021 day two: Is this thing on?
Listen, it’s probably not the best sign when a show feels like it’s running out of steam on its first day. Mobile World Congress’ opening salvo was headlined by Samsung in an event that touched on some partnerships and spent equal time teasing an upcoming event where it will actually launch some hardware. It’s hard to get too down on the GSMA, and I really ought to preface all of these by reiterating that – even in a normal year – running an event is hard as hell. Canceling its flagship show last year had to be gut-wrenching, and deciding to go forward with this one must have also been – albeit for dramatically different reasons?
It’s not like the show didn’t come with some wins. What’s that? Elon Musk videoed in? That’s a pretty massive get by any measure, with all of the standard “whatever you think about the guy” preambles. Love him or hate, you’ve heard about him and probably have extremely strong feelings about the dude, one way or another.
Image Credits: Mobile World Congress (opens in a new window)
The High Priest of Dogeking beamed in to talk SpaceX StarLink. “To be totally frank, we are losing money on that terminal right now,” Musk said in the interview. “That terminal costs us more than $1,000, so obviously I’m subsidizing the cost of the terminal.” Good thing he’s got deep pockets.
He promised a new version of the company’s satellite next year, “which will be significantly more capable.”
Huawei thus far has focused much more on networking than consumer – it’s important to caveat this by adding that MWC is as much, if not more, a networking show, in spite of all of the press that tends to focus on consumer device launches. The company launched a bunch of 5G networking hardware, including several MIMO products.
Speaking of networks, I totally forgot to include this bit from TechCrunch parent co (you know, for now). Verizon trotted out a bunch of robots with 5G branding. The company was making a point about the importance of cellular for future robotics communication.
Here’s CSO Rima Qureshi, quoted by Reuters, “5G will make it possible for robots to connect with other robots and devices of all kinds in a way that simply wasn’t possible before.”
Image Credits: Huawei
Let’s be honest, though, mostly robots make for cool stage fodder. From what I can tell, the Boston Dynamics-esque quadruped was this bot from Ghost Robotics, which Verizon also trotted out (well, it trotted itself out, I suppose) at CES in January:
Given the choice, would I have put on an in-person event in Barcelona in the summer of 2021? No. Nuh-uh. No way. Did the GSMA feel like they had a choice financially or otherwise? That’s a much more difficult question to answer. When you’re a company that runs on events and partnerships, even canceling a single big show is a shock to the system.
I’m going back and forth on whether I’ll be doing any more of these roundups as the show progresses through Thursday. Definitely if some more interesting stuff shows up, or if there’s like video of Elon hoverboarding through the sparsely populated convention center halls or something. But I’m not holding my breath.
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Huawei officially launches Android alternative HarmonyOS for smartphones
Think you’re living in a hyper-connected world? Huawei’s proprietary HarmonyOS wants to eliminate delays and gaps in user experience when you move from one device onto another by adding interoperability to all devices, regardless of the system that powers them.
Two years after Huawei was added to the U.S. entity list that banned the Chinese telecom giant from accessing U.S. technologies, including core chipsets and Android developer services from Google, Huawei’s alternative smartphone operating system was unveiled.
On Wednesday, Huawei officially launched its proprietary operating system HarmonyOS for mobile phones. The firm began building the operating system in 2016 and made it open-source for tablets, electric vehicles and smartwatches last September. Its flagship devices such as Mate 40 could upgrade to HarmonyOS starting Wednesday, with the operating system gradually rolling out on lower-end models in the coming quarters.
HarmonyOS is not meant to replace Android or iOS, Huawei said. Rather, its application is more far-reaching, powering not just phones and tablets but an increasing number of smart devices. To that end, Huawei has been trying to attract hardware and home appliance manufacturers to join its ecosystem.
To date, more than 500,000 developers are building applications based on HarmonyOS. It’s unclear whether Google, Facebook and other mainstream apps in the West are working on HarmonyOS versions.
Some Chinese tech firms have answered Huawei’s call. Smartphone maker Meizu hinted on its Weibo account that its smart devices might adopt HarmonyOS. Oppo, Vivo and Xiaomi, which are much larger players than Meizu, are probably more reluctant to embrace a rival’s operating system.
Huawei’s goal is to collapse all HarmonyOS-powered devices into one single control panel, which can, say, remotely pair the Bluetooth connections of headphones and a TV. A game that is played on a phone can be continued seamlessly on a tablet. A smart soymilk blender can customize a drink based on the health data gleaned from a user’s smartwatch.
Devices that aren’t already on HarmonyOS can also communicate with Huawei devices with a simple plug-in. Photos from a Windows-powered laptop can be saved directly onto a Huawei phone if the computer has the HarmonyOS plug-in installed. That raises the question of whether Android, or even iOS, could, one day, talk to HarmonyOS through a common language.
The HarmonyOS launch arrived days before Apple’s annual developer event scheduled for next week. A recent job posting from Apple mentioned a seemingly new concept, homeOS, which may have to do with Apple’s smart home strategy, as noted by MacRumors.
Huawei denied speculations that HarmonyOS is a derivative of Android and said no single line of code is identical to that of Android. A spokesperson for Huawei declined to say whether the operating system is based on Linux, the kernel that powers Android.
Several tech giants have tried to introduce their own mobile operating systems, to no avail. Alibaba built AliOS based on Linux but has long stopped updating it. Samsung flirted with its own Tizen but the operating system is limited to powering a few Internet of Things, like smart TVs.
Huawei may have a better shot at drumming up developer interest compared to its predecessors. It’s still one of China’s largest smartphone brands despite losing a chunk of its market after the U.S. government cut it off from critical chip suppliers, which could hamper its ability to make cutting-edge phones. HarmonyOS also has a chance to create an alternative for developers who are disgruntled with Android, if Huawei is able to capture their needs.
The U.S. sanctions do not block Huawei from using Android’s open-source software, which major Chinese smartphone makers use to build their third-party Android operating system. But the ban was like a death knell for Huawei’s consumer markets overseas as its phones abroad lost access to Google Play services.
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Huawei launches its next foldable in China
Huawei’s first foldable feels like a distant memory. Announced in 2019, the company went back to the drawing board prior to release, as Samsung ran into its own much publicized issues with the innovative form factor.
The Mate X was well-received among journalists — I had the opportunity to spend some time with it at the company’s HQ in China and was impressed with the build quality. But for various reasons, it never made its way outside of China. And there’s some reason to believe that the newly announced X2 will suffer a similar fate.
The new handset has already drawn its share of comparisons to Samsung’s early models — and rightfully so, to be honest. The X2’s form factor appears to share much more in common with the Galaxy Fold from a design standpoint than its own predecessor. And while Samsung’s model got off to a rocky start or two, the company was also the first to get things fairly right after a bit of public trial and error.
And like Samsung, Huawei is leading with improvements to the hinge mechanism as a big selling point here. It’s the sort of meat and potatoes thing that would be glossed over in most other devices, but the hinge has proven one of the major pain points for these devices — and as much as a company might test behind the scenes, there’s no replacing real-world usage.
The primary, foldable display is eight inches, with a 6.45-inch screen on the outside — a bit more than the Galaxy Fold 2, in both cases (at 7.6 and 6.2 inches, respectively). In the rendering, the front screen occupies most of the device, with a bit of a bezel and a camera cut out. There’s 5G on board, too, paired with Huawei’s proprietary Kirin 9000 chip and a 4,400mAh battery.
The system is, of course, missing a pretty significant feature, courtesy of all of those blacklists. The company is pushing the presence of the Android 10-based EMUI 11.0 (Based on Android 10). Likely the device will also feature Huawei’s own HarmonyOS, in lieu of Android. The company’s been building out its operating system in recent years with the understanding that it would likely become a flashpoint in U.S./China tensions.
We have yet to see a full version of the software, but it’s hard to imagine it being as complete or robust as Google’s 12-year-old mobile OS — not to mention Google’s various apps.
The Mate X2 arrives in China on February 25, starting at around $2,800.
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Biden Commerce nominee Raimondo sees no reason to remove Huawei from entity list
Huawei’s status in the U.S. has been one of many question marks hovering over the newly minted Biden administration. The smartphone maker was one of a number of Chinese companies added to the Department of Commerce’s “entity list” during Trump’s four years in office.
Gina Raimondo, Joe Biden’s nominee for Commerce secretary, has offered what is potentially one of the clearest looks so far at how Huawei’s status might (or might not) evolve under a new administration. Responding to questions from Senate Republicans, former Rhode Island Governor Raimondo indicated that the Biden administration likely would not be in any hurry to remove Huawei from the blacklist.
Republican House members had previously raised concerns over Raimondo’s position on companies like Huawei, a stance she had yet to clarify. “We urge those Senators who have a history of calling for Huawei to remain on the Entity List to stick to their principles and place a hold on Ms. Raimondo’s confirmation until the Biden Administration clarifies their intentions for Huawei and on export control policies for a country that is carrying out genocide and threatening our national security,” they wrote.
Raimondo has since responded.
“I understand that parties are placed on the Entity List and the Military End User List generally because they pose a risk to U.S. national security or foreign policy interests,” the politician said, in a note reported by Bloomberg. “I currently have no reason to believe that entities on those lists should not be there. If confirmed, I look forward to a briefing on these entities and others of concern.”
The statement isn’t definitive in either direction (as is perhaps to be expected for a Cabinet nominee), but it certainly doesn’t point to a radical change from Trump’s position on the issue. The smartphone marker was added to the list in 2019, following longtime accusations over security and spying concerns. The company has also variously been tied to the Chinese government.
The DoC noted at the time:
Huawei was added to the Entity List after the Department concluded that the company is engaged in activities that are contrary to U.S. national security or foreign policy interests, including alleged violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA by providing prohibited financial services to Iran, and obstruction of justice in connection with the investigation of those alleged violations of U.S. sanctions, among other illicit activities.
The Trump administration proved especially aggressive in regards to blacklisting Chinese tech companies, a fact that has already had a profound impact on Huawei’s bottom line. Drone giant DJI and AI company SenseTime have been added to the DoC list, while Xiaomi made a separate military blacklist in the waning days of the administration.
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TrendForce expects the smartphone market to slowly recover in 2021, but Huawei won’t benefit
After a dismal year, the global smartphone market will slowly start recovering in 2021, predicts TrendForce. But Huawei won’t benefit and, in fact, will fall out of the research firm’s list of the world’s top six smartphone makers by production volume.
In 2020, global smartphone production dropped 11% year-over-year to 1.25 billion units. This year, TrendForce expects it to increase by 9% to 1.36 million units, as people replace old devices and demand grows in emerging markets. But even that slight recovery is contingent on how the pandemic continues to impact the economy and the global chip shortage that is currently causing production delays across almost the entire electronics industry.
In 2020, the top six smartphone brands in order of production volume were Samsung, Apple, Huawei, Xiaomi, OPPO and Vivo. But this year TrendForce expects Huawei to slip out of that ranking, with the new top-six list comprising Samsung, Apple, Xiaomi, OPPO, Vivo and Transsion.
Those six companies are expected to account for 80% of the global smartphone market in 2021, while Huawei will come in at seventh place.
The main reason for Huawei’s drop is the divestment of its budget smartphone brand, Honor. Huawei confirmed in November that it is selling Honor to a consortium of companies to save the division’s supply chain from the impact of United States government trade restrictions.
The spin-out was meant to shield Honor from the sanctions that have hurt Huawei’s business. But “it remains to be seen whether the ‘new’ Honor can capture consumers’ attention without the support from Huawei. Also, Huawei and the new Honor will be directly competing against each other in the future, especially if the former is somehow freed from the U.S. trade sanctions at a later time,” said TrendForce’s report.
In a previous report published shortly after Honor’s sale was announced, TrendForce predicted that the deal, along with the global chip shortage, meant Huawei would take just 4% of the market in 2021, compared to the 17% it held in 2019, and estimated 14% in 2020. Apple is expected to take away some market share from Huawei’s high-end smartphones, while Xiaomi, OPPO and Vivo will also benefit. TrendForce expects the newly spun-out Honor to take 2% market share in 2021.
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Known for 5G mmWave testing solutions, Taiwan’s TMYTEK sets its sights on base stations
TMYTEK recently raised a Series A+ round of about $10 million for products that make it easier to test 5G millimeter wave equipment. So far, the company’s clients include KDDI, NTT DoCoMo and research institutions. But the Taiwanese startup has aspirations to sell its own base stations, too, competing with well-established players like Nokia, Ericsson, Samsung and Huawei. TMYTEK plans to use its expertise, gleaned from helping other researchers develop 5G infrastructure, to create what its chief executive officer describes as a “complete 5G industrial chain.”
Its latest funding round was led by TMYTEK’s manufacturing partner Inventec, one of the largest OEMs in Taiwan, and brings the startup’s total funding so far to $13.3 million. Other investors included Taisic Materials, ITEQ, Tamagawa Electronics and Taiwan’s National Development Fund. TMYTEK also recently took part in SparkLabs Taipei’s accelerator program.
Co-founder and chief executive officer Su-Wei Chang told TechCrunch that it plans to raise a Series B next to develop and commercialize its base stations. To get ready for its base station business, TMYTEK recently joined the O-RAN Alliance, founded by some of the world’s biggest telecoms to create more interoperable mobile networks, in a bid to encourage the development of new technology and faster deployment.
Chang said TMYTEK’s base in Taiwan gives it a strategic advantage. 5G manufacturing is an important part of Taiwan’s economy, with exports reaching record highs during the second half of 2020, thanks in part to demand for 5G-related equipment and technology for smartphones, autonomous vehicles and smart devices.
Chang studied at University of Massachusetts Amherst and when TMYTEK was founded six years ago, he was often asked why he didn’t stay in the United States, where it would have been easier to secure startup funding. But being in Taiwan puts the company closer to many important markets, including Japan, where 30% of its current business comes from, and gives TMYTEK a good foundation to expand into the U.S. and European market, he said.
It has also given the company a supply chain advantage. TMYTEK has manufacturing partners across Asia, including Inventec in Taiwan, and factories in Vietnam and Thailand, in addition to China. Chang said this means TMYTEK was not limited by the COVID-19 pandemic or the U.S.-China trade war.
Before launching TMYTEK in 2014, Chang and co-founder Ethan Lin both worked at Academia Sinica, one of the top research institutions in Taiwan, where they focused on millimeter waves even though at the time most researchers were more interested in the mid-band spectrum.
But as more devices and applications began to crowd the 4G spectrum, mmWave became less niche. With Qualcomm’s launch of next-generation 5G mmWave hardware and chips, and more carriers launching mmWave coverage, mmWave is poised to become mainstream.
Millimeter waves offer powerful signals with wide bandwidth and low latency, but drawbacks include difficulty traveling through obstacles like buildings. It also has a limited range, which is why millimeter waves need more base stations. Beamforming, which directs signals toward a specific device, and antenna array, or multiple antennas that work like a single antenna, are used to extend its coverage.
Making mmWave development faster
One of the main challenges for the millimeter wave market, however, is the lack of R&D tools to speed up their development and time to market, resulting in higher costs and slower deployment.
To keep up with market opportunities, TMYTEK transitioned from design and manufacturing projects for clients to offering 5G-focused solutions like the BBox, which stands for “beamforming box.” The BBox was created after a professor at National Taiwan University told Chang that his team was working on antenna design, but didn’t have the resources to work on beamforming technology, too. It lets researchers create 16 beams and control the signal’s amplitude and phase with software, so they can test how it works with antennas and other hardware more quickly. TMYTEK claims the BBox can save researchers and engineers up to 80% in time and cost.
Chang said TMYTEK realized that if researchers at NTU, one of Taiwan’s largest research universities, needed a solution, then other labs did, too. So far, it has delivered 30 sets to companies including KDDI, NTT DoCoMo, Fujitsu, several Fortune 500 companies and research institutions.
While the BBox was created for antenna designers, the company also began exploring solutions to help other designers, including algorithm developers who want to test beam tracking, communicate with base stations and collect data.
TMYTEK vice president Ethan Lin holds the antenna-in-package for its XBeam millimeter wave testing solution (Image Credits: TMYTEK)
For that scenario, TMYTEK created the XBeam, which it describes as a “total solution,” and is meant for the mass production phase, testing modules, smartphones and base stations before they are shipped. Traditional solutions to test modules rely on mechanical rotators, but Chang said this is more suited to the research and development process. The XBeam, which is based on the BBox, electronically scans beams instead. The company claims the XBeam is up to 20 times faster than other testing solutions.
TMYTEK created the XBeam’s prototype in 2019 and launched the commercialized version in November 2020.
The BBox and XBeam will help TMYTEK build its own base station business in two ways, Chang said. First, having its own solutions will allow TMYTEK to test base stations and bring them to market faster. Second, the startup hopes building a reputation on effective research and development tools will help it market its base stations to private and public networks. This is especially important to TMYTEK’s ambitions since their base stations will be up against products from major players like Nokia, Ericsson, Samsung and Huawei.
“Our advantage at TMYTEK is that we’re doing the design and we have good partners for manufacturing. Inventec, our investor, is a top five manufacturer in Taiwan,” he said. “And TMYTEK also builds our own testing solution, so our value is that we can provide a total solution to our customers.”
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UK shrinks timetable for telcos to stop installing 5G kit from Huawei
The U.K. government has squeezed the timetable for domestic telcos to stop installing 5G kit from Chinese suppliers, per the BBC, which reports that the deadline for installation of kit from so-called “high risk” vendors is now September.
It had already announced a ban on telcos buying kit from Huawei et al by the end of this year — acting on national security concerns attached to companies that fall under the jurisdiction of Chinese state surveillance laws. But, according to the BBC, ministers are concerned carriers could stockpile kit for near-term installation to create an optional buffer for themselves since it has allowed until 2027 for them to remove such kit from existing 5G networks. Maintaining already installed equipment will also still be allowed up til then.
A Telecommunications Security Bill which will allow the government to identify kit as a national security risk and ban its use in domestic networks is slated to be introduced to parliament tomorrow.
Digital secretary Oliver Dowden told the BBC he’s pushing for the “complete removal of high-risk vendors”.
In July the government said changes to the U.S. sanctioned regime meant it could no longer manage the security risk attached to Chinese kit makers.
The move represented a major U-turn from the policy position announced in January — when the U.K. said it would allowed Chinese vendors to play a limited role in supplying domestic networks. However, the plan faced vocal opposition from the government’s own back benches, as well as high-profile pressure from the U.S. — which has pushed allies to expel Huawei entirely.
Alongside policies to restrict the use of high risk 5G vendors the U.K. has said it will take steps to encourage newcomers to enter the market to tackle concerns that the resulting lack of suppliers introduces another security risk.
Publishing a supply chain diversification strategy for 5G today, Dowden warns that barring “high risk” vendors leaves the country “overly reliant on too few suppliers”.
“This 5G Diversification Strategy is a clear and ambitious plan to grow our telecoms supply chain while ensuring it is resilient to future trends and threats,” he writes. “It has three core strands: supporting incumbent suppliers; attracting new suppliers into the UK market; and accelerating the development and deployment of open-interface solutions.”
The government is putting an initial £250 million behind the 5G diversification plan to try to build momentum for increasing competition and interoperability.
“Achieving this long term vision depends on removing the barriers that prevent new market entrants from joining the supply chain, investing in R&D to support the accelerated development and deployment of interoperable deployment models, and international collaboration and policy coordination between national governments and industry,” it writes.
In the short to medium term the government says it will prioritize support for existing suppliers — so the likely near-term beneficiary of the strategy is Finland’s Nokia.
Though the government also says it will “seek to attract new suppliers to the U.K. market in order to start the process of diversification as soon as possible”.
“As part of our approach we will prioritise opportunities to build UK capability in key areas of the supply chain,” it writes, adding: “As we progress this activity we look forward to working with network operators in the UK, telecoms suppliers and international governments to achieve our shared goals of a more competitive and vibrant telecoms supply market.”
We’ve reached out to Huawei for comment on the new deadline for U.K. carriers to stop installing its 5G kit.
The company has continued to reject security concerns attached to its business.
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Huawei reportedly set to sell Honor budget phone division for $15B
Following weeks of rumors surrounding a potential sale, Huawei has reportedly struck a deal to divest itself of its Honor brand. A new report out today from Reuters notes that the embattled hardware maker will sell the budget unit to a consortium of buyers that includes the government of the city of Shenzhen and Digital China, a phone distributor.
The report, which cites “people familiar with the matter,” puts the price tag for the Honor unit at $15.2 billion. Honor’s new owners will reportedly keep much of the brand’s 7,000 employees (management included) in tact, with plans to take the company public in around three years. The Honor brand has largely focused on low-cost devices, with sales in China, Europe and the U.S. This deal would likely find Huawei focusing more exclusively on high-end products under its own brand.
While the deal has been rumored for some time now, its seeming conclusion comes in the wake of Joe Biden’s presidential election win. It seems clear from Huawei’s decision to press on with the all-cash deal that the company doesn’t believe its international fortunes will change immediately under a new U.S. president.
The news comes in the wake of ongoing difficulties tied to U.S. sanctions. Huawei’s inability to access technologies from companies like Google have proven to be a major hit for the world’s second largest phone maker. While the company has managed to maintain solid sales in its native China, even those have taken a hit amid its struggles.
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Smartphone shipments dip in China for Q3, led by Huawei decline
China was the first major global smartphone market to rebound from the early days of the COVID-19 pandemic. Stringent lockdown measures were able to help the country recover from the virus relatively quickly during the first wave, as sales started to return well ahead of other areas.
In Q3, however, things have begun to decline again. New numbers from Canalys point to an 8% drop between quarters — and a 15% drop year-over-year. The firm chalks much of the slowdown to longtime market leader Huawei’s ongoing issues with the U.S. government. The problems had a kind of cascading effect that served to impact the number two companies, Vivo and Oppo.
Image Credits: Canalys
“Huawei was forced to restrict its smartphone shipments following the August 17 US sanctions which caused a void in channels in Q3 that its peers were not equipped to fill. Huawei is facing its most serious challenge since taking the lead in 2016,” analyst Mo Jia said in a release. “If the position of the US administration does not change, Huawei will attempt to pivot its business strategy, to focus on building the [Harmony] OS and software ecosystem, as the Chinese government is eager to nurture home-grown alternatives to global platforms.”
Huawei dropped 18% in Mainland China, year-over-year. Vivo and Oppo posted similar declines at 13% and 18%, respectively. Xiaomi was able to make up ground at third place, gaining 19% y-o-y per the figures. Apple, meanwhile, remained relatively steady, in spite of the delated launch of the iPhone 12. Huawei’s continued struggles could provide a vacuum for the competition to fill.
Analyst Nicole Peng notes that the arrival of the 5G handset put the U.S. company in a strong position, looking forward: “iPhone 12 series will be a game changer for Apple in Mainland China. As most smartphones in China are now 5G-capable, Apple is closing a critical gap, and pent-up demand for its new 5G-enabled family will be strong.”
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