Huawei may start selling its mobile chips

IDG News Service - Chinese handset maker Huawei Technologies expects its smartphone chip business will help further drive revenue, signaling that the company could try to compete in the world's mobile chip market.

"In the future, whether it be mobile broadband devices, tablets, or smartphones, Huawei will be able to provide its own core chip solution," said Huawei executive vice president Eric Xu.

He made the comment on Wednesday during the company's annual analyst summit, when asked how Huawei would grow its smartphone market share without losing money to marketing efforts.

"If we cannot make money from smartphones, we can still make money from the chipset offerings," Xu said. "If we can make money from every smartphone chip, then it will be substantial."

This year, Huawei unveiled its own in-house developed quad core processor when it announced the company's Ascend Quad family of smartphones. Huawei's K3V2 quad core processor is based on the ARM architecture and has a clock speed running at either 1.2 GHz or 1.5 Ghz.

The Chinese handset maker has previously used chips from other vendors for its smartphones. But it also has a division called HiSilicon Technologies, which developed the K3V2 chip, along with other wireless baseband processors.

Entering the mobile chip market would mean Huawei would compete against well-established players including Qualcomm, Nvidia and Texas Instruments, which already supply processors used in some of the hottest smartphones and tablets in the market.

The K3V2 chip is currently only used by the company, but Huawei is open to making it available to other vendors, said Shao Yang, chief marketing officer for Huawei Device. At the same time, the company will also continue considering using processors from mobile chip vendors such as Qualcomm and Texas Instruments to power its smartphones, he added. One of Huawei's newest smartphones, the Ascend P1, uses a chip from Texas Instruments.

Huawei is best known as supplier of telecommunication equipment. But the company has big ambitions in the smartphone market, where it intends to compete by offering both lower-end and higher-end devices. Last year, the company sold 20 million smartphones.

"From Huawei's point of view, we feel that in the next to or three years, our smartphone hardware will have no problem competing," Xu said.

Xu also denied rumors that the company wants to acquire Motorola Mobility from Google. "Huawei has never had the idea to buy Motorola Mobility," he said, adding that the U.S. government would never allow such an acquisition to go through.

The company has seen previous business deals in the U.S. fall through because of its alleged links to China's military. Huawei, however, denies such claims, and has sought to clear its reputation.