Huawei Technologies Co., Ltd. (/ˈhwɑːˌweɪ/; Chinese: 华为; pinyin: Huáwéi) is a Chinese multinational conglomerate which specialises in telecommunications equipment, consumer electronics, artificial intelligence and technology-based services and products, headquartered in Shenzhen, Guangdong.
Huawei has deployed its products and services in more than 170 countries, and as of 2011 it served 45 of the 50 largest telecom operators. Huawei overtook Ericsson in 2012 as the largest telecommunications-equipment manufacturer in the world, and overtook Apple in 2018 as the second-largest manufacturer of smartphonesin the world, behind Samsung Electronics.It ranks 72nd on the Fortune Global 500 list.
Ren Zhengfei, a former engineer in the People's Liberation Army, founded Huawei in 1987. At the time of its establishment, Huawei focused on manufacturing phone switches, but has since expanded to include building telecommunications networks, providing operational and consulting services and equipment to enterprises inside and outside of China, and manufacturing communications devices for the consumer market. Huawei had over 170,000 employees as of September 2017, around 76,000 of them engaged in research and development (R&D). It has 21 R&D institutes in countries including China, the United States, Canada, the United Kingdom, Pakistan, Finland, France, Belgium, Germany, Colombia, Sweden, Ireland, India,Russia, Israel, and Turkey. As of 2017 the company invested US$13.8 billion in R&D, up from US$5 billion in 2013.
The company will dedicate 20-30 percent of R&D funding to basic science research, up from its previous 10 percent, and increase R&D funding to at least US$15 billion annually, according to the official company statement in November 2018. CNBC reported that Huawei's revenue in 2018 will exceed 100 billion US dollars for the first time.
Although successful internationally, Huawei has faced difficulties and cybersecurity concerns selling in some markets (such as the United States), over allegations that its equipment may contain backdoors that could enable unauthorized surveillance by the Chinese government and by the People's Liberation Army (citing, in particular, its founder having previously worked for the Army). While the company has argued that its products posed "no greater cybersecurity risk" than those of any other vendors, Huawei stated in April 2018 that it would largely pull out of the U.S. market, due to the scrutiny having impacted its activity. Huawei's Vice-chairperson and CFO Meng Wanzhou was arrested in Canada on December 1, 2018, at the request of the United States, which accuses her of violating US sanctions against Iran.
Name
The name Huawei may be translated as "splendid act" or "China is able"; Hua can mean "splendid" or "China", while wei can mean "action" or "achievement". In Chinese pinyin, it is Huáwéi,and close in pronunciation to "Hwa Way" in Standard Chinese, but close to "Wah Way" in Cantonese. However, pronunciation of Huawei by non-Chinese varies in other countries, for example "Hua Way" or "How Wee" in the United States and "Hoe-ah-wei" in the Netherlands.The company had considered changing the name in English as it was concerned that non-Chinese may find the name hard to pronounce, but decided to keep the name, and launched a name recognition campaign instead to encourage a pronunciation closer to "Wah-Way" using the words "Wow Way".
History
Early years
During the 1980s, Chinese government tried to modernize the country's underdeveloped telecommunications infrastructure. A core component of the telecommunications network was telephone exchange switches, and in the late 1980s several Chinese research groups endeavored to acquire and develop the technology, usually through joint ventures with foreign companies.
Ren Zhengfei, a former deputy director of the People's Liberation Army engineering corp, founded Huawei in 1987 in Shenzhen. Rather than relying on joint ventures to secure technology transfers from foreign companies, which were often reluctant to transfer their most advanced technologies to Chinese firms, Ren sought to reverse engineer foreign technologies with local researchers. At a time when all of China's telecommunications technology was imported from abroad, Ren hoped to build a domestic Chinese telecommunication company that could compete with, and ultimately replace, foreign competitors.
The company reports that it had RMB 21,000 in registered capital at the time of its founding. The Far Eastern Economic Review also reported that it received an $8.5 million loan from a state-owned bank, though the company has denied the existence of the loan.
During its first several years the company's business model consisted mainly of reselling private branch exchange (PBX) switches imported from Hong Kong. Meanwhile, it was reverse-engineering imported switches and investing heavily in research and development to manufacture its own technologies. By 1990 the company had approximately 600 R&D staff, and began its own independent commercialization of PBX switches targeting hotels and small enterprises.
The company's first major breakthrough came in 1993, when it launched its C&C08 program controlled telephone switch. It was by far the most powerful switch available in China at the time. By initially deploying in small cities and rural areas and placing emphasis on service and customizability, the company gained market share and made its way into the mainstream market.The company also developed collusive joint venture relationships with local authorities, whereby it would provide "dividends" to the local officials in exchange for their using Huawei products in the network. Ahrens writes that these methods were "unorthodox, bordering on corrupt," but not illegal.
Huawei also gained a key contract to build the first national telecommunications network for the People's Liberation Army, a deal one employee described as "small in terms of our overall business, but large in terms of our relationships". In 1994, founder Ren Zhengfei had a meeting with Party General Secretary Jiang Zemin, telling him that "switching equipment technology was related to national security, and that a nation that did not have its own switching equipment was like one that lacked its own military." Jiang reportedly agreed with this assessment.
Another major turning point for the company came in 1996, when the government in Beijing adopted an explicit policy of supporting domestic telecommunications manufacturers and restricting access to foreign competitors. Huawei was promoted by both the government and the military as a national champion, and established new research and development offices.
Foreign Expansion
In 1997, Huawei won a contract to provide fixed-line network products to Hong Kong company Hutchison Whampoa. Later that year, Huawei launched its wireless GSM-based products and eventually expanded to offer CDMA and UMTS. In 1999, the company opened a research and development (R&D) center in Bangalore, India to develop a wide range of telecom software. From 1998 to 2003, Huawei contracted with IBM for management consulting, and transformed its management and product development structure.After 2000, Huawei increased its speed of expansion into overseas markets, having achieved foreign sales of more than US$100 million by 2000 and establishing an R&D center in Stockholm, Sweden. In 2001, Huawei established four R&D centers in the United States, divested non-core subsidiary Avansys to Emerson for US$750 million and joined the International Telecommunications Union (ITU).By 2002, Huawei's foreign market sales had reached US$552 million.
In 2004 Huawei continued its overseas expansion with a contract to build a third-generation network for Telfort, the Dutch mobile operator. This contract, valued at more than $US25 million, was the first such contract for the company in Europe.
In 2005, Huawei's foreign contract orders exceeded its domestic sales for the first time. Huawei signed a Global Framework Agreement with Vodafone. This agreement marked the first time a telecommunications equipment supplier from China had received Approved Supplier status from Vodafone Global Supply Chain. The agreement established the terms and conditions for the supply of Huawei's solutions to any one of the Vodafone operating companies worldwide. Huawei also signed a contract with British Telecom (BT) for the deployment of its multi-service access network (MSAN) and Transmission equipment for BT's 21st Century Network (21CN), providing BT and the UK telecommunications industry with some infrastructure necessary to support future growth as these companies are multi vendor infrastructure.
In May 2008, Huawei and Optus developed a mobile innovation centre in Sydney, Australia, providing facilities for engineers to develop new wireless and mobile broadband concepts into "ready for market" products. In 2008, the company embarked on its first large-scale commercial deployment of UMTS/ HSPA in North America providing TELUS's new next generation wireless network and Bell Canada with high-speed mobile access.
Huawei delivered one of the world's first LTE/EPC commercial networks for TeliaSonera in Oslo, Norway in 2009. The company launched the world's first end-to-end 100G solution from routers to transmission system that same year, to help meet the rapid growth of network traffic and enhance router efficiency and reliability.
In July 2010, Huawei was included in the Global Fortune 500 2010 list published by the U.S. magazine Fortune for the first time, on the strength of annual sales of US$21.8 billion and net profit of US$2.67 billion. In late 2010 it was reported that Huawei is planning to invest around US$500 million (Rs 2,200 crore) to set up a telecom equipment manufacturing facility in Tamil Nadu, India and $US100 million to expand its R&D center in Bangalore.
In October 2012, it was announced that Huawei would move its UK headquarters to Green Park, Reading, Berkshire. The company also, in an effort to increase its prominence in the United States, became the main sponsor of the Jonas Brothers' 2013 summer tour.
In September 2013, Huawei opened a new Canadian office in Regina, Saskatchewan—Huawei had collaborated with the local carrier SaskTel to build its HSPA+ and LTE networks. The company also announced that SaskTel would carry its new Ascend Y300 smartphone.
In October 2013, Huawei was selected by TDC A/S as a sole vendor to modernize the nationwide GSM/UMTS/LTE network in Denmark and provide managed services over a six-year period. The value of the contract is over $700 million over the term of the agreement. Huawei is the number one Telecom Vendor in the world as of 2018.
In 2014, Huawei recorded a profit of 34.2 billion CNY (US$5.5 billion).
In September 2017, Huawei created an NarrowBand IOT city-aware network using a "one network, one platform, N applications" construction model utilizing IoT, cloud computing, big data, and other next-generation information and communications technology, it also aims to be one of the world's five largest cloud players in the near future.
Investment and partne
Huawei has focused on expanding its mobile technology and networking solutions through a number of partnerships. In March 2003, Huawei and 3Com Corporation formed a joint venture company, 3Com-Huawei (H3C), which focused on the R&D, production and sales of data networking products. The company later divested a 49% stake in H3C for US$880 million in 2006. In 2005, Huawei began a joint venture with Siemens, called TD Tech, for developing 3G/ TD-SCDMA mobile communication technology products. The US$100 million investment gave the company a 49% stake in the venture, while Siemens held a 51% stake.In 2007, after Nokia and Siemens co-founded Nokia Siemens Networks, Siemens transferred all shares it held in TD Tech to Nokia Siemens Networks. At present, Nokia Siemens Networks and Huawei hold 51% and 49% shares of TD Tech respectively.
In 2006, Huawei established a Shanghai-based joint R&D center with Motorola to develop UMTS technologies. Later that year, Huawei also established a joint venture with Telecom Venezuela, called Industria Electronica Orinoquia, for research and development and sale of telecommunications terminals. Telecom Venezuela holds a 65% stake while Huawei holds the remaining 35% stake.
Huawei and American security firm Symantec announced in May 2007 the formation of a joint-venture company to develop security and storage solutions to market to telecommunications carriers. Huawei initially owned 51% of the new company, named Huawei Symantec Inc. while Symantec owned the rest. The joint venture was based in Chengdu.In March, 2012, Symantec announced the sale of its portion of the joint venture to Huawei.
Grameenphone Ltd. and Huawei won the Green Mobile Award at the GSMA Mobile Awards 2009. In March 2009, the Wimax Forum announced four new members to its Board of Directors including Thomas Lee, the Vice Director of the Industry Standards Department at Huawei.
In 2008, Huawei launched a joint venture with UK-based marine engineering company, Global Marine Systems, to deliver undersea network equipment and related services.
In 2016, beginning with the Huawei P9, Huawei began a co-engineering partnership with German camera manufacturer Leica.
In 2017, Huawei began helping BYD build a standardized, smart factory.
Recent performance
In April 2011, Huawei announced an earnings increase of 30% in 2010, driven by significant growth in overseas markets, with net profit rising to RMB23.76 billion (US$3.64 billion; £2.23 billion) from RMB18.27 billion in 2009. In 2010 sales outside China continued to be the main driver of Huawei's business. Overseas revenue rose 34% to RMB120.41 billion in 2010 from RMB90.02 billion in 2009, fueled by regions including North America and Russia. Revenues from China rose 9.7% to RMB64.77 billion, as the country's big telecom operators reduced their investment last year.
Huawei's revenues in 2010 accounted for 15.7% of the $78.56 billion global carrier-network-infrastructure market, putting the company second behind the 19.6% share of Telefon AB L.M. Ericsson, according to market-research firm Gartner.
Huawei is targeting a revenue of $150 million through its enterprise business solutions in India in the next 12 months. It denied using Chinese subsidies to gain global market share after being recently accused by US lawmakers and EU officials of unfair competition at best.
Huawei closes 2018 with 200 million smartphones sold.
Corporate Affairs
Huawei classifies itself as a "collective" and does not refer to itself as a private company. Richard McGregor, author of The Party: The Secret World of China's Communist Rulers, said that this is "a definitional distinction that has been essential to the company's receipt of state support at crucial points in its development".McGregor argued that "Huawei's status as a genuine collective is doubtful."
Leadership
Ren Zhengfei is the president of Huawei and has held the title since 1987. Huawei disclosed its list of board of directors for the first time in 2010. Ms. Sun Yafang is board chair. As of 2011, the members of the board are Ms. Sun Yafang, Guo Ping, Xu Zhijun, Hu Houkun, Ren Zhengfei, Xu Wenwei, Li Jie, Ding Yun, Meng Wanzhou, Chen Lifang, Wan Biao, Zhang Pingan, and Yu Chengdong. The members of the Supervisory Board are Liang Hua, Peng Zhiping, Ren Shulu, Tian Feng, and Deng Biao. Richard Yu Chengdong is the Chairman of Huawei Device, its mobile phone division.On 1 July 2013, Huawei Device announced former head of Nokia Colin Giles joined the company as Executive Vice President of Consumer Business.
Ownership
Officially, Huawei is an employee-owned company, a fact the company emphasizes to distance itself from allegations of government control. What "employee-owned" means in practice at Huawei, however, is quite complex—so much so that according to the Chinese media company Caixin, "even longtime employees admit the [employee shareholding] system is nearly impossible to understand."
Ren retains a direct 1.42 percent share of the company. The remainder of the shares is held by "a trade union committee tied to the affiliate Shenzhen Huawei Investment Holding Co."This body represents Huawei's employee shareholders. About 64 percent of Huawei staff participate in this scheme (approximately 61,000 Chinese employees; the 50,000-plus foreign employees are not eligible), and hold what the company calls "virtual restricted shares". These shares are nontradable and are allocated to reward performance. When employees leave Huawei, their shares revert to the company, which compensates them for their holding.Although employee shareholders receive dividends, it is reported that they have no information on their holding.
Employees' shares do not entitle them to any voice in management decisions. Richard McGregor, author of The Party: The Secret World of China's Communist Rulers, claimed that the majority of shares are likely owned by Ren Zhengfei and Ren's managers, though the company states Ren directly owns less than 1.5%.
Partner and customers
As of the beginning of 2010, approximately 80% of the world's top 50 telecoms companies had worked with Huawei. Prominent partners include:
- BT
- Vodafone
- Motorola
- Orange
- T-Mobile
- TalkTalk
- Portugal Telecom
- Cox Communications
- Bell Canada
- PTCL
- PLDT
- Clearwire
In May 2011 Huawei won a contract with EE Limited, the UK's biggest telecom company, to enhance its 2G network. The four-year deal represents Huawei's first mobile network deal in the UK.
Products and services
Huawei is organized around three core business segments:
- Telecom Carrier Networks, building telecommunications networks and services
- Enterprise Business, providing equipment, software and services to enterprise customers, e.g. Government Solutions etc.
- Devices, manufacturing electronic communications devices
Huawei announced its Enterprise business in January, 2011 to provide network infrastructure, fixed and wireless communication, data center, and cloud computingsolutions for global telecommunications customers.Huawei has stated that it aims to increase enterprise sales to US$4 billion in 2011 and $15 billion within three to five years.
In 2016, Huawei enterprise business group launched a new marketing slogan defining its position for the enterprise market, "Leading New ICT, Building a Better Connected World" at CeBIT 2016.
Telecom networks
Huawei offers a variety of network technologies and solutions to help telecommunications operators expand the capacity of their mobile broadband networks. Huawei's core network solutions offer mobile and fixed softswitches, plus next-generation home location register and Internet Protocol Multimedia Subsystems(IMS). Huawei assists content service providers looking to migrate from copper to fiber with solutions that support xDSL, passive optical network (PON) and next-generation PON (NG PON) on a single platform. The company also offers mobile infrastructure, broadband access and service provider routers and switches (SPRS). Huawei's software products include service delivery platforms (SDPs), BSSs, Rich Communication Suite and digital home and mobile office solutions.Huawei announced that it jointly conducted successful 5G tests with Telenor with speed reached up to 70 Gbit/s in a controlled lab environment.In 2010, 4G began replacing 3G and increased mobile data transmission speeds tenfold. In the era of 5G, it will be 100 times faster than the 4G in transmitting mobile data.
Global services
Huawei Global Services provides telecommunications operators with equipment to build and operate networks as well as consulting and engineering services to improve operational efficiencies. These include network integration services such as those for mobile and fixed networks; assurance services such as network safety; and learning services, such as competency consulting.
In 2010, Huawei won 47 managed services contracts to help improve network performance and efficiency for customers, as well as reducing the costs of network operations and maintenance.In 2010 Huawei's global services revenues grew 28.6% to US$4.82 billion.
At Hannover Messe 2018 Preview, Huawei announced it will showcase an array of innovative products and solutions to drive digital industrial transformation. As a company which cover the global services, Huawei has teamed up with global partners such as GE, SAP, Deutsche Telekom, and Honeywell to help manufacturers remodel the value chain of the industry, improve business models, and create new values based on IoT, cloud, Big Data, and other technologies. Huawei signed with Deutsche Post DHL which is the world's leading mail and logistics company about Memorandum of Understanding (MoU) to improve a series of supply chain solutions for customers using industrial-grade IoT hardware and infrastructure in February 2017. Afterwards, in March 2017, Huawei declared that they will cooperate with Altair which is a simulation software provider leading global engineering, to jointly develop efficient, high-performance industrial simulation cloud solutions for customers. Followed by April 2017, the Industrial Cloud-based Predictive Maintenance Solution which has been recognized and applied by Schindler, the leading elevator and escalator supplier in the world, was jointly launched by Huawei and GE. Following that, in November 2017, Huawei announced a long-term partnership with Groupe PSA which is the second largest car manufacturer which boasts multiple car brands under its umbrella, including Peugeot and Citroën in Europe. The partnership will see both companies collaborating in the IoV field to provide innovative mobility services and solutions to customers.
Device
Huawei's Devices division provides white-label products to content-service providers, including USB modems, wireless modems and wireless routers for mobile Wi-Fi, embedded modules, fixed wireless terminals, wireless gateways, set-top boxes, mobile handsets and video products. Huawei also produces and sells a variety of devices under its own name, such as the IDEOS smartphones, tablet PCs and Huawei Smartwatch.In 2010, Huawei Devices shipped 120 million devices around the world. 30 million cell phones, of which 3.3 million units were smartphones, were shipped to markets such as Japan, the United States and Europe.
History of Huawei phones
In July 2003, Huawei established their handset department and by 2004, Huawei shipped their first phone, the C300. The U626 was Huawei's first 3G phone in June 2005 and In 2006, Huawei launched the first vodafone branded 3G handset, the V710. The U8220 was Huawei's first Android smartphone and was unveiled in MWC 2009. At CES 2012, Huawei introduced the Ascend range starting with the Ascend P1 S. At MWC 2012, Huawei launched the Ascend D1. In September 2012, Huawei launched a 4G ready phone, the Ascend P1 LTE. At CES 2013, Huawei launched the Ascend D2 and the Ascend Mate. At MWC 2013, the Ascend P2 was launched as the world's first LTE Cat4 smartphone. In June 2013, Huawei launched the Ascend P6 and in December 2013, Huawei introduced Honor as a subsidiary independent brand in China. At CES 2014, Huawei launched the Ascend Mate2 4G In 2014 and at MWC 2014, Huawei launched the MediaPad X1 tablet and Ascend G6 4G smartphone. Other launched in 2014 included the Ascend P7 in May 2014, the Ascend Mate7, the Ascend G7 and the Ascend P7 Sapphire Edition as China's first 4G smartphone with a sapphire screen.
In January 2015, Huawei discontinued the "Ascend" brand for its flagship phones, and launched the new P series with the Huawei P8. Huawei also partnered with Google to build the Nexus 6P in 2015. I
The current models in the P and Mate lines, the P20, P20 Pro, and Mate 20, were released in 2018.
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