Huawei to Authorize Smartphone Design for Third-Party Brands to Bypass U.S. Sanctions, Sources Say

On Monday, Bloomberg quoted individuals familiar with the matter as saying that Huawei is planning to license its mobile smartphone design to some third-party brands as a result of U.S. sanctions. Other brands therefore can obtain the key components needed to manufacture smartphones based on Huawei’s design.

Huawei is reportedly in talks with the state-owned China Postal and Telecommunications Appliances Co., Ltd. (PTAC), which will seek to purchase components listed in export controls to Huawei, so that the latter can manufacture and sell related smart smartphone products, said one of the sources.

The report also shows that a department named Xnova has already started selling Huawei’s Nova series smartphones on its e-commerce website. According to the cooperation agreement, Xnova will provide its self-owned brand smartphones based on Huawei’s design.

It is worth noting that a few months ago, “@Hinova“, an official brand account on Weibo, the Chinese equivalent of Twitter, was registered and certified by China Post Communications Equipment Co., Ltd., which is a wholly-owned subsidiary of PTAC. In addition, PTAC participated in the joint acquisition of Huawei’s budget phone brand Honor last year.

Another person familiar with the matter pointed out that TD Tech, a Chinese telecommunications equipment provider, will also sell some smartphones based on Huawei’s design under its own brand. The cooperation may undergo further changes in the future, as the negotiations are still going on.

Some netizens noticed that TD Tech has recently launched a smartphone named “TD Tech N8 Pro” in, which is very similar to Huawei’s Nova 8 Pro in appearance and configuration. It is even equipped with a Kirin 985 5G chip developed by Huawei. But in less than a week, this smartphone was removed from the e-commerce website.

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Besides, digital blogger “@Ark Kachayixia” posted on November 11, saying that TD Tech is also preparing to launch a flagship machine with the same shape as the Huawei Mate 40. This product may be named “M40.”

TD Tech Ltd. was established in 2005 and is committed to the R&D, sales and service of Time Division Synchronous Code Division Multiple Access (TD-SCDMA) equipment. The company is jointly funded and established by Siemens Communications Group and Huawei, which also own 51% and 49% of shares, respectively. Its CEO Deng Biao worked at Huawei for 22 years, and Xu Zhijun, now rotating chairman of Huawei, serves as director of TD Tech.

Under the escalating sanctions imposed by the U.S., Huawei has reportedly chosen to authorize its smartphone design for third-party brands, which appears to offer a feasible solution. Huawei may maintain the operation of its smartphone business by obtaining license fees and sales shares.