In a leaked memo to his employees, Huawei founder Ren Zhengfei paints a deeply pessimistic picture of his company's prospects – and for the Chinese economy.
By Redaktion Table
In a recently published paper, scientists warn against expecting too much from Open RAN: As things stand, this initiative will not reduce dependence on China in mobile communications technology.
By Falk Steiner
Huawei Technologies Inc. is a Chinese telecommunications equipment and hardware manufacturer. It is the largest smartphone producer in the world. The Table.Media editorial team provides all the news about the corporation.
Huawei was founded in 1987 by Ren Zhengfei and is headquartered in China's Shenzhen Special Economic Zone. The company traces its roots to a Chinese government program in the 1980s to develop telecommunications infrastructure. Originally, Huawei made its money by reselling telephone equipment from Hong Kong. Thanks to heavy investment in research and development, Huawei was able to offer the most powerful switching system available in the People's Republic at the time, starting in 1993. From 1996, a protectionist policy of the Chinese government took effect. Domestic telecommunications providers were promoted, while foreign competitors were made more difficult to enter the market.
As early as 1997, Huawei entered into international cooperation agreements. The Chinese group then entered Europe in 2000, when it opened a research center in Stockholm. By 2002, Huawei's sales outside China were already US$520 million, and just three years later, for the first time, sales abroad were greater than those at home. During the coronavirus pandemic, Huawei became the largest producer of smartphones in individual quarters. The total group's sales climbed to $136.7 billion. In the process, Huawei made a profit of $9.9 billion. The company employs 197,000 people.
In 2002, Huawei and the American network component manufacturer Cisco faced off in court. The Americans had sued the Chinese company because the software (IOS) and hardware were very similar. However, the court only found in favor of Cisco in the area of software. The two companies reached an out-of-court settlement. In 2020, Hon Hai, a company from Taiwan, waived 4G equipment from Huawei. With this technology, Huawei could spy and pose a threat to Taiwan's national security. The fears were not unfounded. In April 2021, a 2010 report by consulting firm Capgemini came to light. It stated that Huawei had been able to intercept all calls of the six and a half million customers of KPN, the Dutch mobile operator, since 2009. These included the then Prime Minister Jan Peter Balkenende and various Chinese dissidents.
In 2019, a dispute between the USA and Huawei escalated. Ostensibly, the arrest of Meng Wanzhou was to blame. Canadian police arrested the daughter of Ren Zhengfei, Huawei's founder, at Vancouver airport on December 1, 2018. Under pressure from the US. The country accuses Huawei's chief financial officer of fraud and evading sanctions against Iraq. At the same time, the US warned against Huawei's 5G technology as it would be used for espionage. Then-U.S. President Donald Trump declared a national emergency regarding telecommunications on May 15, 2019. The allowed the government to ban business with companies from "adversarial" countries. In the eyes of the U.S. government, the purpose was to avoid "unacceptable risks" and guarantee the "safety of Americans."
The impact of the US sanctions massively affected Huawei's business. Google had to end its cooperation with the Chinese company in May 2019 on the instructions of the US government. Huawei uses the Android operating system provided by Google parent Alphabet. Huawei can no longer access popular Google services such as the Play Store, Gmail and Google Maps. In August 2020, former U.S. President Donald Trump tightened sanctions against Huawei. Due to the trade embargo, the group could no longer obtain all components for its hardware. Production was cut back by 74 percent in the meantime. Huawei has been on a US government blacklist since December 2020. The authorities concluded that Huawei could pass on American technologies to the Chinese military.
China is the only country that could produce smartphones without importing parts or raw materials. Huawei had to replace some of the individual parts to do so. The big losers were American suppliers ON Semiconductor, Broadcom, Qorvo and Cirrus. As recently as 2018, Huawei was buying eleven billion dollars worth of parts in the US. The companies were replaced by MediaTek (Chinese ARM processors), HiSilicon (Huawei subsidiary), Murata (sensors from Japan) and NXP (Dutch company). Nevertheless, Huawei's smartphone division suffers from the lack of Google software. Before the embargo, the Chinese company was well on its way to becoming the world market leader. The company sold almost 240 million devices worldwide in 2019. Then sales slumped to 188 million smartphones. Whereby it was the first half of the year that still glosses over the figures. The trend is clearly downward.
All smartphones from Huawei that already had a Google license before the embargo by former US President Trump are not affected. These devices from Huawei still have Google and even Android 10:
Mate 20
Mate 20 X
Mate 20 X 5G
Mate 20 Pro
P30
P30 Lite
P30 Pro
P Smart 2019
P Smart Plus 2019
P Smart Z
Nova 5T
Huawei devices designed, licensed and built after the embargo no longer have Google services. These include:
P40 Pro
P40 Lite 5G
P40 Lite
Huawei devices can still be used without Google services. However, it is limited. Popular apps like Gmail, Playstore and Maps can no longer be used. However, it is more dramatic that the Google Mobile Service (GMS) is no longer available. Many apps need this. Messenger apps only display push notifications with a long delay, messaging apps often crash, and Netflix and eBay sometimes cannot be opened at all. Huawei wants to circumvent the problem by offering its own apps in its own app store.
WhatsApp and Instagram cannot be used with new smartphones from Huawei. The application cannot be downloaded from the Chinese company's AppGallery. There is also no corresponding app on the platform's page itself. It only refers to Google's Playstore or Apple's App Store. The corresponding apps are only available on Huawei devices that still run Android.
The name Huawei consists of two Chinese words. One is "Hua." This can mean "magnificence" or "glory". The second part of the name is "Wei." This word has many meanings in Chinese. For example, it can mean "achievement" and "power of achievement". Therefore, an exact translation of the whole name Huawei into German is not possible. The pronunciation of Huawei is a bit more complex. Because there are two correct possibilities here. In Chinese, the name is pronounced something like "Wah-Wey". Whereby the "h" is only very roughly breathed. Outside of China, however, a pronunciation that sounds like "Hu-A-Wie" has become established. It is even used in commercials.
While smartphones take up most of the coverage, Huawei's core business is the development, production and provision of network infrastructure. Many experts believe the real reason for the trade dispute with the US is the race for dominance in 5G technology. Huawei also supplies companies such as Deutsche Telekom, Vodafone, and Telefónica with antennas for WLAN broadband networks. In addition, Huawei offers cloud computing and data center management solutions for companies and organizations of all sizes. Huawei's German headquarters are in Düsseldorf. The company has modernized Deutsche Bahn's GSM-R mobile network, among other projects, and is working with SAP. The European Organization for Nuclear Research (CERN) is also among its prominent customers away from the smartphone business.
Huawei has also been represented in Germany since 2001. The headquarters of Huawei Technologies Deutschland GmbH is in Düsseldorf. In total, the Chinese group employs 2,500 people at 18 locations in Germany. These include the company's largest European research center in Munich, the capital city office in Berlin, and branches in Hamburg, Hannover, and Stuttgart, among others.
In 2020, Huawei signed a licensing agreement with a Volkswagen supplier. Neither Volkswagen nor Huawei disclosed which one it was. The cooperation is about the networking of the group's passenger car models. The patents used are technical principles of LTE data radio (4G). Around 30 million vehicles are to be equipped with Huawei technology. It was only in the summer of 2020 that Huawei announced that it would also be active in the automotive industry. The Shenzhen-based group founded the new business line "Research & Development, Production, Sales and Maintenance of Auto Parts and Intelligent Automotive Systems." Together with battery cell manufacturer Contemporary Amperex Technology (CATL) and car producer Changan Auto, Huawei plans to develop e-cars.
The trade dispute between the US and Huawei, the global expansion of the 5G network, and electromobility are topics that will continue to make headlines for a long time and will determine the future of the Chinese group. This news has significance beyond China and Huawei. All relevant news is available from the Table.Media editorial team.
