Huawei’s business in Bangladesh, which has been on a downward trend from last year, is likely to fall further due to the stopping of Kirin chipset production
The US sanctions which debar China's Huawei from producing Kirin chipsets from September 15 will squeeze the technology giant's smartphone market across the world as the high-end Kirin chipset is a key component of its Mate, Nova and P series flagship phones.
However, the impact of the sanctions is not likely to expand to Bangladesh mobile phone market because Huawei Technologies has a nominal share in the smartphone market here, industry insiders have said.
The annual demand for the handsets in the country is around 3.60 crore. Of the total market size, the world's largest smartphone vendor Huawei holds only a 4% share in Bangladesh.
Besides, none of the companies which are currently importing and assembling mobile phones of other brands in Bangladesh use Kirin chipsets for their signature brands.
Currently, nine companies are producing mobile phones in Bangladesh. In 2019, they manufactured 70 lakh of mobile phones, including 20 lakh of smartphones.
Generally, Bangladeshi mobile manufacturers largely use Taiwan and USA's chips such as MediaTek, MTK and Qualcomm.
Therefore, Bangladeshi manufacturers will not face any chips sourcing problem due to the latest US sanctions on the production of Huawei Kirin chips.
Among the local manufacturers, Edison Group's Symphony is the leading local brand occupying around 23% of the market share.
Ashraf Haque, Executive Director of Edison Group, said Kirin chips are used for the Huawei flagship series only.
"Only Huawei uses its chips. Therefore, other brands will not face any issue regarding Huawei as they use separate chips for their devices," he said.
Industry insiders, however, noted that the business of the company, which has been on a downward trend from last year due to the China-US trade war, will fall further due to the sanctions.
Mesbah Uddin, chief marketing officer of Fair Distribution Ltd, the company that assembles Samsung mobile phone, said the supply side of processor chips and the sales of Huawei phones in the Bangladeshi market could be affected.
"Under the circumstances, the Chinese tech giant will not be able to launch any new handset of its flagship series until it makes an alternative available," he said.
The Huawei Technologies (Bangladesh) Ltd sells equipment, including network collaboration switches, IP microwave transceivers, IP cameras, routers and firewalls to mobile network operators and the telecom regulatory commission.
However, the mobile operators along with mobile users have already started to stop sourcing Huawei's equipment and products following a US trade blacklisting of the company.
Shahed Alam, chief corporate and regulatory officer at Robi, the second-largest mobile operator in the country, said that the sanction will not affect Robi as it has been sourcing technology from multiple companies.
"The equipment that we use in the network is not imported from Huawei alone. We are sourcing equipment from different brands such as Ericson, Nokia and any many more suppliers," he explained.
Sumon Ahmed Sabir, ICT expert and chief technology officer at Fiber@Home, a nationwide telecommunication transmission network, also asserted that the ban will impact the Huawei business in Bangladesh. It is a very big challenge for Huawei to overcome these sanctions.
At the same time, he noted, "But Huawei is not sitting idle. They are doing extensive research and developing alternatives. The company is coming up with devices and software avoiding US copyrights.
"Huawei has already developed alternatives to Android and is bringing software avoiding the Oracle database, which they commonly use," he further said.
Due to the ongoing trade war between the US and China, Huawei's technology market is gradually decreasing in Bangladesh. The Chinese tech giant registered a 35% drop in revenue in Bangladesh last year, according to media reports.
However, the Huawei Dhaka office has not made any statement on the issue.
A source at the industry told The Business Standard that Huawei's business in Bangladesh has remained stagnant since the USA sanctions were imposed last year.
As of the second quarter of 2020, Huawei is the number one smartphone vendor in the world with a 19.6% share of the global smartphone market. However, the brand has around 4% share in the Bangladesh market, with Samsung holding the top position here.