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Huawei plans to circumvent US sanctions by licensing phone designs to other companies

In brief: The Biden Administration doesn’t seem to want to undo Trump’s Huawei ban, so the Chinese company is now planning to license its phone designs to other companies in an effort to circumvent the restrictions on purchasing American-made hardware and software.

By now it’s no secret that Huawei’s business has suffered a number of setbacks as a result of US sanctions. More than two years have passed since Donald Trump’s administration blacklisted the Chinese tech giant, and now it is no longer one of the top phone manufacturers in the world. On top of that, Huawei is no longer one of the top five phone vendors in its home country.

The company has taken difficult steps in an attempt to weather the storm, including developing technology solutions for more efficient pig farming and spinning off its Honor sub brand into a separate entity that is now owned and operated by a state-owned company.

According to a Bloomberg report, Huawei’s next step will be to license its smartphone designs to other companies, which could allow it to circumvent the Entity List and gain access to American-made technology.

Huawei is planning to start licensing its designs to a unit of state-owned China Postal and Telecommunications Appliances Co. called Xnova, and the latter will attempt to buy essential hardware and software the former is no longer allowed to acquire. This would mark a continuation of an existing arrangement where Xnova was selling Huawei-branded Nova phones on its online store, with the only difference being that Xnova will now be able to use its own branding.

Another company that will soon sell self-branded phones based on Huawei designs is telecom equipment manufacturer TD Tech Ltd., but the partnership is still being negotiated. In the meantime, Huawei engineers are adapting phone designs to use Qualcomm and MediaTek chipsets instead of those made by Huawei subsidiary HiSilicon.

With no sign that the Biden Administration will remove Huawei from the Entity List, this move may be the only way for the Chinese tech giant to remain relevant on the mobile market. Time will tell if this strategy will produce any positive results, but Huawei hopes it will lead to an increase in sales next year, possibly as much as 30 million units on top of current projections.

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