Huawei’s mockery of Apple over 5G chip sourcing didn’t age well

“In April, Huawei’s founder and chief executive Ren Zhengfei suggested to CNBC that if Apple continued to be unable to source 5G technology from Qualcomm, Huawei ‘would be open to’ selling its own 5G models to the iPhone maker,” Daniel Eran Dilger writes for Roughly Drafted. “Yet a week after repeatedly leading the media along with the idea that it was going to “rescue” Apple from its 5G problems, Huawei admitted to Reuters that it hadn’t even discussed the possibility with Apple.”

“Instead, the remarks were pretty clearly made to suggest that Huawei’s chip technology was advanced far ahead of Apple’s, and that iPhones were in a precarious position teetering on the precipice of doom where only Huawei offered it any hope of survival,” Dilger writes. “The reality is that Huawei’s Application Processor chips are well behind Apple’s and the company is greatly reliant on a variety of U.S. companies as suppliers.”

“Two months later, while Apple has resolved its legal issues with Qualcomm, it’s now Huawei that is blocked from using American suppliers including Qualcomm, due to the Trump Administration’s listing of Huawei on the ‘Entity List,'” Dilger writes. “American companies now have to apply for a license before shipping their products to the Chinese company.”

Read more in the full article here.

MacDailyNews Take: Hopefully, as the screws tighten on China, a new U.S.-China trade agreement is near!

In closing his article, Dilger makes an important point:

Some have sought to portray Huawei’s problems as being just another issue for Apple, imagining that the Chinese government would snub the American iPhone maker in retaliation. However, China’s increasingly sophisticated supply chain and a series of its major manufacturers are dependent upon Apple’s contract manufacturing business because of its ability to sell premium products at high volumes. Further, China itself collects a Value Added Tax on every iPhone sold in the country, making it a partner in Apple’s success domestically as well as globally.Daniel Eran Dilger, Roughly Drafted, May 20, 2019

SEE ALSO:
Google terminates Huawei’s Android license after Trump administration blacklist – May 20, 2019
Trump administration blacklists Huawei putting Apple at risk of retaliation from China – May 16, 2019
The media is lying to you about President Trump’s China tariffs – May 15, 2019
Analyst: Apple investors ‘overreacting’ to U.S.-China trade war and Supreme Court App Store ruling – May 14, 2019
Apple, Deere & Co, retail in focus as U.S. releases fresh tariff list – May 14, 2019
Gene Munster: Apple likely to be spared from China tariffs – May 10, 2019
Apple shares drop 7% this week on fears China trade turmoil threatens iPhone sales – May 10, 2019
Apple’s iOS 13 rumored to drop support for iPhone 6, iPhone SE and iPhone 5s – May 10, 2019
Apple not yet hurt by China tariffs, likely to simply absorb the added cost – May 10, 2019
Apple temporarily escapes new tariffs as U.S.-China trade war escalates – May 10, 2019
Dow futures fall after President Trump tweets ‘absolutely no need to rush’ on China trade deal – May 10, 2019
China overplayed its hand with U.S. President Trump on trade, and it could cost them dearly – May 9, 2019
Apple CEO Tim Cook optimistic about U.S.-China trade talks – February 12, 2019
President Trump says U.S. doing well in trade negotiations with China – January 23, 2019
China’s 2018 growth slows to 28-year low, more stimulus seen – January 22, 2019
Apple CEO Tim Cook: I’m very optimistic about U.S.-China trade talks – January 8, 2019
Advisor to President Trump: Apple’s sales should pick up when U.S.-China strike trade deal – January 3, 2019

6 Comments

  1. Looking at Trump’s trade war only through the lens of Apple and Huawei and that the imposition of our will to force compliance only leads one to a bad conclusion or opinion.

    For those who read beyond U.S. mainstream propaganda sources, and short sighted articles like Danny Dilger’s, it is apparent that China is implementing it’s “Long March” strategy, which is to dig in for the long haul.

    China also is preparing to constrain rare earth element exports to the U.S., as evidenced by Xi’s visits in the last few days to production centers. It will be interesting to see how a rare earth element export limit or tariff from China affects the high tech industry, and the component manufacturing industry. As to Apple, here’s what SeekingAlpha has to say about the rare earth element issue:

    “Apple could be severally impacted. As noted above, nine of the 17 rare earths are in an iPhone. On top of that, LEDs used as backlights, use rare earth phosphors. The larger the display, the greater the number of LEDs. Thus, they are used in iPhones, iMacs, iPads, and iWatches. In other words, all Apple products. The higher price AAPL pays for the components in its supply chain will influence the price it charges to customers or affect its operating margins.”

    https://seekingalpha.com/article/4184580-new-china-rare-earth-embargo-damage-several-u-s-companies-technology-competitiveness

    1. You could well be right, the ‘war’ may already be lost even if it may, in the short term look like battles won. Of course it will likely be in the next Presidents reign that the true implications become clear. And I suspect that in that regard this may be a poison pill the present one is leaving for his successor deliberate or otherwise but you can guarantee he will be exploiting that particular result to his own benefit post his time in office when cause and effect won’t perhaps be expecially clear to much of the population. We shall see but the Chinese are well known for their long memories and desire to be independent of outside influences so whatever the initial reactions the long term one will be even more down that particular road. Expect even greater urgency to building up their navy for example well beyond the present plan for 32 new destroyers, it’s going to be both soft and hard power consequences though I think the West’s General complacency and lack of foresight in the past may already have made that inevitable anyway.

  2. Thanks Theloniousmac! It’s a very enjoyable and informative video. He’s a humble presenter and has good insights. I don’t know how you find some of these gems you gift us with but i, for one, am in your debt.

    J aka citizen

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