5G Huawei deal with Apple on cards

Business | Tereza Cai 11 Apr 2019

Huawei may sell chips to Apple, and the United States has recognized Huawei's leading position in 5G, when the tension between the two countries ease.

Mainland media reported that China Tower (0788) and Huawei jointly announced that they have finished energy solutions for 5G testing, which is key progress in promoting the 5G power industry, offering a new resolution for the 5G base station's power supply.

The Defense Innovation Board in the US released a report on Wednesday warning that China may be taking the lead in 5G implementation, a result of its proactive investment, pointing out that the three major telecommunications operators in China have deployed about 350,000 5G base stations, 10 times that of the US.

The report also said that Huawei has 28 percent of global market share, warning that it might be hard for the US to be the leader of the world's 5G market by merely keeping leverage on mmWave spectrum.

Technology website Engadget said Huawei softened its attitude by being willing to sell the internal-use-only 5G Balong 5000 chips to Apple. That would be key for Apple because Apple's chips were from limited sources since Qualcomm and Apple were in

a legal battle.

Meanwhile, HSBC Global Research released a report saying that China's 5G development has entered the countdown stage. It regards only ZTE (0763) among the H shares as goldmines with potential. It raised by 10 percent the expected ZTE net profit in 2019, saying the worst time for the company has passed, lifting its A-share target price from 20.5 yuan to 27.7 yuan.

The research firm forecast China's 5G will be a commercialized operation next year, and its impact on industrial and commercial industries will be much bigger than on mobile phones.

Shipment volumes of China's domestic phones in March fell 6 percent year-on-year to 28.37 million. Shipments of 4G phones declined 3.9 percent to 26.98 million, accounting for 95.1 percent of total shipments, said the China Academy of Information and Communications Technology.

Domestic phone shipments in the first three months amounted to 76.93 million, down 11.9 percent from last year; 4G phone shipments fell 10.5 percent from the same period of 2018, making up 95.3 percent of total shipments.

Sunny Optical Technology (2382) said its handset lens set shipments in March rose 41.7 percent to 86 million, or 31.9 percent month on month, due to increased market share, and handset camera modules grew 14.3 percent to 28.57 million.

Xiaomi (1810) said that its chairman, Lei Jun, still holds the 636.6 million shares given to him last year as a bonus, clarifying that the high remuneration was not in cash. The shares were valued at HK$7.54 billion, based on Wednesday's closing price.

Last year Lei promised to donate all the reward shares, after deducting any tax payable, to charity.

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