Nokia Parts Ways with Huawei in Joint Venture Amid US-China Frictions

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Nokia has found new purchasers for its dominant share in the Beijing-based joint venture, TD Tech, after a previous deal with Huawei Technologies fell through last year.

The proposed agreement faced strong opposition from Huawei, prompting Nokia to seek alternative partnerships. 

In the latest development, wireless technology firm TD Tech will now be jointly controlled by Huawei and a consortium of entities, including the government-owned Chengdu High-Tech Investment Group, Chengdu Gaoxin Jicui Technology Co, and venture capital firm Huagai.

The State Administration for Market Regulation (SAMR) disclosed the details of the deal on Friday, emphasizing that there were no antitrust concerns. The regulatory body will be open to public feedback until January 28. 

Prior to the sale, Nokia held a 51% stake in TD Tech, with Huawei owning the remaining 49%. The disclosure did not specify the new equity distribution among the participating entities.

Huawei and TD Tech collectively account for no more than 10% of China’s smartphone market, according to SAMR, without providing a specific time frame for the data. 

Nokia’s Ownership vs. Huawei’s Control in TD Tech

nokia-parts-ways-with-huawei-in-joint-venture-amid-us-china-frictions
Nokia has found new purchasers for its dominant share in the Beijing-based joint venture, TD Tech, after a previous deal with Huawei Technologies fell through last year.

In the third quarter of the previous year, Huawei held a 14% share in the Chinese smartphone market, ranking fifth behind its spin-off Honor, and competitors Oppo, Vivo, and Apple, as reported by Counterpoint Research.

TD Tech, established in 2005 as a joint venture between Huawei and Siemens, has evolved into a global player in wireless communications equipment, serving 8 million industry customers across more than 100 countries.

While Nokia was the majority owner of TD Tech, industry observers noted that Huawei had been the de facto controller. The joint venture’s management, composed of former Huawei employees, designed product solutions based on Huawei technology but tailored for the industry market.

Last year, when Nokia attempted to sell its majority stake to Shanghai-listed ink maker New East New Materials, Huawei threatened to halt technology licensing to TD Tech, resulting in the collapse of the deal. 

Analysts believe that Huawei’s reluctance stemmed from a desire to retain control of TD Tech, potentially aiding the Chinese tech giant in circumventing certain US sanctions and addressing specific market segments more effectively.

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