As a follow-on to my column about the impacts of the political battle between the United States and China (The Electronics Industry: A Pawn in the US vs. China Chess Game), it appears necessary to address the question of Qualcomm vs. Huawei.
Because both companies are technology leaders in the wireless segment and have invested heavily in 5G, they often are pitted against one another in political, financial and even industry discussions. However, the truth is that the two companies complement one another and work together more than they compete against each another.
Different Focuses
Qualcomm and Huawei come from different ends of the wireless ecosystem. While Qualcomm at one time supplied everything from handsets to telco equipment, it always has been focused primarily on providing the technology in the form of intellectual property and chipsets to enable mobile devices. As a result, Qualcomm's early competitors were other IP and semiconductor suppliers like Texas Instruments and Infineon (now part of Intel).
Through the past few wireless generations, many of Qualcomm's early competitors have exited the market and new ones have arisen, such as MediaTek and Spreadtrum. In addition, many of the leading smartphone vendors, including Apple and Samsung, have started developing their own chipsets to compete with those from Qualcomm.
Huawei, on the other hand, entered the market as a telecommunications equipment provider competing against companies like Ericsson, Lucent and Nortel. Today, Huawei is a much more diverse company. It provides a wide variety of products and services, ranging from smartphones to cloud data center services. Despite quickly becoming the third-largest supplier of smartphones worldwide, providing wireless infrastructure equipment remains its anchor business.
Wireless Standards
Due to their different focal points, Qualcomm and Huawei have been working on 5G from different perspectives -- Qualcomm primarily from the mobile device side, and Huawei from the infrastructure side.
More importantly, both companies have collaborated through the 3GPP to develop future wireless standards. The fact that both have invested heavily in the 5G standards and related technology is a positive for the entire industry, because the heavy investments will continue to accelerate the development and adoption of new wireless technologies.
Beyond wireless standards, the two companies have collaborated on mobile devices. Although Huawei has been developing its own Kirin chipsets for use in smartphones and tablets through its wholly owned HiSilicon subsidiary, it uses chipsets from third-parties like MediaTek and Qualcomm for some of its platforms.
The third-party chipsets typically have been used in lower-cost mainstream devices. However, Huawei has indicated that it is important to look at all the available technology for each generation of devices, because the devices group should not suffer if the silicon group (HiSilicon) stumbles.
At Huawei's recent analyst summit, Qualcomm was mentioned at least a dozen times as a key partner. So, despite the political rhetoric, the two companies are very close technology partners.
IP Protection
The same can be said throughout the electronics industry. To do business in China, foreign companies must partner with a Chinese entity, typically resulting in the formation of a new entity as a joint venture. The greatest concern surrounding these agreements is the protection of IP in China.
Although IP protection is still a concern, the Chinese government has made great strides in protecting and enforcing IP from foreign entities over the past decade. It appears committed to improving China's standing in the high-tech segment, especially as Chinese vendors become more prominent in technology IP.
It would be almost impossible to develop an electronic solution without leveraging resources from multiple companies in multiple regions, especially the U.S. and China. Most prominent technology companies, like Huawei and Qualcomm, have engineering resources in many countries around the world.
Most mobile devices require IP, semiconductor, system design, manufacturing and software resources from other companies around the world.
"Coopetition" is a common term among companies in the electronics industry, but for Qualcomm and Huawei, the relationship is less competition than cooperation.
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