Huawei "Open" to Supplying 5G Chips to Apple

5G baseband

Huawei is 'open' to selling 5G chips to Apple for iPhones, marking a big shift in strategy

The CEO spoke in Mandarin, which was translated into English by an official translator. If a manufacturer chooses not to sign a licensing agreement, then Qualcomm refuses to sell them any of its modems, which are a necessity in this smartphone driven world. In this regard, Ren Zhengfei admitted that Huawei made mistakes in the smartphone strategy, but they learned from it.

Today, the beginning of a perceived five week long jury trial, Apple will try to convince a San Diego federal courtroom that Qualcomm has been engaging in unfair patent licensing practices for far too long.

In a wide-ranging conversation, Ren called Apple a "great company" and its founder Steve Jobs a "great man".

Also, Huawei's phones are not sold via major telecom operators in the US, so the company has an extremely small consumer presence in the country.

Presently, most of Qualcomm's income comes from licensing fees, and a win from Apple would mean a significant change to its business model, with 64% of the company's total earnings before tax coming from licensing agreements previous year.

"Mr. Jobs was great not because he created Apple, but because he created an era, the mobile internet era", Ren told CNBC.

Qualcomm has a modem that can support 5G, while Intel's product isn't expected to hit the market until 2020. "Saying that he was great is an understatement". "My younger daughter is a fan of Mr Jobs, so she proposed that we stop for a moment of silence to mourn him, and we did". "I think he was super-great".

The consumer business at Huawei became its largest division in 2018, overtaking its core networking business. It was a cheap handset, as were those that followed it over the next few years. Our low cost comes from two reasons. First, as our technology advanced rapidly, we managed to bring down the costs of our products. Second, due to the introduction of Western Management Method, our operating costs are also kept at a low level, which makes it hard for Western companies to compete with us.

"We set prices based on cost, but the cost is relatively low". With higher prices, we have started earning more.

"We have not had discussions with Apple on this issue", Hu said, reiterating that Huawei does not plan to become a chipset vendor at this time. We have raised our prices, and now many people think Huawei is expensive.

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