US moves against Huawei while Qualcomm grows in China

The geopolitical struggles between the US and China continue to play out in the telecom industry. China's Huawei is facing fresh regulatory obstacles in the US market. Meanwhile, US chip vendor Qualcomm reported significant growth in the Chinese smartphone market.

The developments highlight the tensions between the world's two primary international superpowers. And it's not clear how the situation might ultimately impact the global market for telecom products and services.

For Huawei, the company is now facing additional restrictions in the US market. The FCC announced this week that Huawei would not be able to participate in the agency's certification process for wireless devices.

"Communications networks are a part of everything we do, and it's why their security matters more than ever before," explained FCC Chairwoman Jessica Rosenworcel in a statement. "So we must ensure that our equipment authorization program and those entrusted with administering it can rise to the challenge posed by persistent and ever-changing security and supply chain threats."

According to Reuters, Huawei was an accredited FCC lab, but its certification expired this week and won't be renewed. The company did not immediately respond to a request for comment from the publication.

Regardless, the move comes as little surprise. Officials across the US government have moved to block Huawei from selling equipment in the US. They have also moved to prevent US companies from supplying advanced equipment and technologies to Huawei.

As a result, Huawei has mostly withdrawn from the US marketplace. Indeed, the chief security officer for Huawei Technologies USA – Andy Purdy – is no longer with the company. Purdy often represented the company at US telecom industry events.

But Huawei remains somewhat involved in the US market, albeit quietly. According to a new report from Bloomberg, the company is secretly funding research into communications technologies at American universities, including Harvard. The company is doing so through research competitions administered by the Optica Foundation, an independent Washington-based foundation, according to the report.

A Huawei official sent this statement to Light Reading after this article was published: "Given that Huawei’s contribution to the Optica Foundation is openly declared on the Foundation’s website, any suggestion of secrecy is absurd. Huawei is proud to be one of many technology companies from around the world supporting the Foundation’s important work."

The Chinese market

Meanwhile, US-based companies continue to participate in the Chinese market for wireless equipment. But US-based chip maker Qualcomm and US-based smartphone maker Apple appear to have very different experiences in the country.

"Recently launched flagship Android devices powered by Snapdragon 8 Gen 3 are seeing strong demand globally, especially in China," said Qualcomm CEO Cristiano Amon during his company's recent quarterly conference call, according to Seeking Alpha.

Qualcomm reported that its sales to phone manufacturers in China surged 40% in the first half of Qualcomm's fiscal year. The company said it's not supplying chips for Huawei's new 5G gadgets.

But Apple apparently is not seeing the same success in China. According to research firm Canalys, Apple's sales in China fell by 25% year-over-year to 10 million units in the first quarter of 2024. 

Qualcomm supplies Apple's iPhone chips. Apple is scheduled to report its quarterly earnings Thursday afternoon. 

Meanwhile, Huawei's smartphone sales in China grew 70% over the same period, helping the company regain the top spot in China in terms of market share. That helped Huawei's profit soar in its most recent quarter.

"The mainland China market's growth is still behind the global recovery of 11%, which allowed Huawei to seize [smartphone] market share and reclaim the crown quickly," Canalys Senior Analyst Toby Zhu said in a release.