The internal memo shows how the company is responding to the immense pressure sanctions have placed on the handset business that was at its core.

Ren said in the memo the company was focusing on software because future development in the field is fundamentally "outside of US control and we will have greater independence and autonomy".

As it will be hard for Huawei to produce advanced hardware in the short term, it should focus on building software ecosystems, such as its HarmonyOS operating system, its cloud AI system Mindspore and other IT products, the note said.

The blacklist also barred Google from providing technical support to new Huawei phone models and access to Google Mobile Services, the bundle of developer services upon which most Android apps are based.

Huawei's 2020 annual report did not break down how much of its $138.70 billion revenue was from its software.

Ren's note said the software push would depend on finding the right business model and that the company should adopt an open source approach, calling on staff to "absorb nutrients" through open source communities.

He said the company's Welink business communication platform had relied on traditional software licensing, which was unsuited to cloud computing and inferior to a rival product from tech giant Alibaba (9988.HK).

Given the difficulty of working in the United States, Ren's note said the company should strengthen its position at home and build up its territory with a view to excluding the United States.

"Once we dominate Europe, the Asia Pacific and Africa, if US standards don't match ours, and we can't enter the US, then the U.S. can't enter our territory," it said.