Huawei - Implementing Innovation 2.0

Huawei - Implementing Innovation 2.0

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Huawei was founded in 1987 by Ren Zhengfei, an ex-military officer. It was merely formed as a private company. The main mission of the company was to provide consulting and operations services to most of the enterprises in China and outside the country.

There are around 3 core business units in the company, Telecom Carrier Networks, Enterprise Business and Devices, and manufacturing communication devices.

Huawei - Company Highlights

Startup Name Huawei Technologies
Headquarters Shenzhen, China
Industry Consumer electronics, Telecom equipment, Networking equipment,Semiconductors
Founded September 15, 1987
Founder Ren Zhengfei
CEO Ren Zhengfei
Areas Served Worldwide (exempting United States since 2019)

Huawei - About and How it Works?
Huawei - Logo and its Meaning
Huawei - Founder and History
Huawei - Mission
Huawei - Recent News
Huawei - Partnerships
Huawei - Business Model
Huawei - Revenue and Growth
Huawei - Investments
Huawei - Acquisitions
Huawei - Competitors
Huawei - Challenges Faced
Huawei - Future Plans
Huawei - FAQs

Huawei - About and How it Works?

Huawei is a global provider of information and communications technology (ICT) infrastructure and smart devices. The company offers a range of products, services, and business solutions for telecom carriers, including wireless network, fixed network, cloud core network, carrier software, IT infrastructure, network energy, professional services, and network rollout services.

It also builds a digital infrastructure platform utilizing cloud computing, software-defined networking, big data, and IoT to enable the digital transformation of the government, public utilities, finance, energy, transport, and manufacturing industries. In addition, Huawei provides smartphones, tablets, wearable devices, converged home devices, and applications on these devices for consumers and businesses.

Huawei - Logo and its Meaning

Huawei Logo
Huawei Logo

In addition to Huawei's name, its own brand uses a flower-shaped logo. This is a symbolization of the "Hua" syllable that can mean petals or can also mean a lavish and luxurious in Mandarin. So it can be concluded Huawei logo symbolizes the achievement that surge or boast.

Huawei - Founder and History

The company was founded in 1987 by Ren Zhengfei, an ex-military officer.

Founder of Huawei
Founder of Huawei

It was merely formed as a private company. The main mission of the company was to provide consulting and operations services to most of the enterprises in China and outside the country. The company has around 140,000 employees working. 46% of the employees are involved in research & development.

After a few years, the company got a research centre of its own and started doing research and development. The set up got an initial breakthrough by launching its C&C08 digital telephone switch. The company got its first international project in 1997. It then started providing fixed line networks products to a company in Hong Kong.

In 1999, Huawei set up its first R&D centre in Bangalore, India. The company also entered into a 5-year contract with IBM till 2003. Huawei continued to expand into international markets. It is the first company to deliver LTE/EPC commercial network for Telia Sonera in Norway in the year 2009.

In 2013, the company opened its new office in Canada. Over the years, Huawei always focused on enhancing its mobile technology and has a number of partnerships with other companies. It also formed a joint venture, 3Com-Huawei and focused on R&D and production of the networking products.

Huawei is a collective company now and not privately owned any more. By the year 2010, 80% of the top 50 telecom companies worked with Huawei. Some prominent partners include Motorola, Vodafone, Talk Talk, T-mobile, Clear wire, Bell Canada, etc.

Huawei - Mission

Huawei's mission is to expand the benefits of technology to everyone, everywhere. To achieve this, they've developed a digital inclusion strategy that focuses on three areas: technology, applications, and skills. Huawei believes that technology will make life better for every individual, home, and organization.

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Huawei - Recent News

  • The research report provides deep insights into the regional market revenue, parent market trends, macro-economic indicators, and governing factors, along with market attractiveness per market segment of North America. The report provides an overview of the growth rate of the North America 5G Chipset market during the forecast period, i.e., 2020–2027 in which top key players are Broadcom, Inc., Huawei Technologies Co., Ltd, Mediatek Inc., Nokia Corporation, Xilinx, Inc.
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  • The chief executive of Ericsson has come out in support of arch-rival Huawei after Sweden blocked the Chinese firm from building its 5G networks.

Huawei - Partnerships

As of the beginning of 2010, approximately 80% of the world's top 50 telecoms companies had worked with Huawei.

Current prominent partners include:

  • Bell Canada
  • BT
  • Clearwire
  • Cox Communications
  • Globe Telecom
  • Motorola
  • Orange
  • PLDT
  • Portugal Telecom
  • Google
  • T-Mobile
  • TalkTalk
  • Vodafone

Huawei - Business Model

When you look at the rise of the Huawei it’s clear that the success has come from adopting new business models to fit current market trends and to ensure that they remain competitive towards its competitors. The adaptation and change for its business models over the years has ensured that it remains a dark horse in the smartphone industry. Many years ago, Huawei was known for selling ‘cheap and cheerful’ products, which were renowned to not last very long.

As a company, Huawei has invested millions in R&D to help them pursue better approaches to the industry and to try and get the company renowned as one of the best. As you can see from the image below the amount of units that Huawei now sells compared to back in 2013 is a substantial improvement, which can effectively be down to several improvements it has made as a company over the period of 3 years. The willingness of adapting and changing its ideas to fit and match companies such as Apple and Samsung will be a major factor of its success.

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Huawei - Revenue and Growth

Huawei announced worldwide revenues of $105.1 billion for 2018, with a net profit of $8.7 billion. Huawei's Q1 2019 revenues were up 39% year-over-year, at US$26.76 billion. In 2019, Huawei reported revenue of US$122 billion.

Huawei - Investments

Huawei Technologies has made 5 investments. Their most recent investment was on Dec 19, 2019, when Lero raised €6M.

Date Organization Name Round Amount
Dec 19, 2019 Lero Venture Round €6M
May 8, 2017 Falcon Computing Solutions Series B $8M
Mar 1, 2015 Che Youyuan Angel Round CN¥3M
Jul 21, 2014 XMOS Series D $26.2M
Jan 1, 2011 Teewon Venture Round CN¥320M

Huawei - Acquisitions

Huawei Technologies has acquired 9 organizations. Their most recent acquisition was Vocord on Jun 4, 2019.

Aquiree Name Date Amount About Acquiree
Vocord Jun 4, 2019 - Vocord is a developer & manufacturer of intelligent video surveillance systems, biometric identification and computer vision
Vokord Telekom Zao Jun 3, 2019 $50M Vokord Telekom Zao manufactures radio and television broadcasting and communications equipment
HexaTier Dec 27, 2016 $42M HexaTier delivers unified database security solutions utilizing a patented database reverse proxy technilogy
Toga Networks Dec 7, 2016 - Toga Networks is a privately held company that provides advanced technologies research and high level design for the IT and Telecom markets
Neul Sep 22, 2014 $25M Neul develops wireless network technology to enable the use of TV white space spectrum
Centre for Integrated Photonics Jan 26, 2012 - Centre for Integrated Photonics designs, develops, and manufactures semiconductor optoelectronic chips for telecommunications applications
Huawei Symantec Technologies Nov 14, 2011 - Huawei Symantec Technologies Co. Ltd. (Huawei Symantec) is a leading provider of network security and storage appliance solutions to
3Leaf Feb 19, 2011 - 3Leaf offers server virtualization solutions for data center initiatives such as power management and architectural support
Harbour Networks Holdings Sep 11, 2006 - Harbour Networks Holdings provides internet protocol-based networking equipment and services management software for varied industries

Huawei - Competitors

Huawei's top competitors include Lenovo, Ericsson Nikola Tesla, Ericsson, ZTE, Apple, Nokia, Xiaomi, Sony, Samsung Electronics and HTC.

Huawei - Challenges Faced

Huawei’s globalization efforts were marred by issues of security concerns expressed by countries that were sceptical over its lack of transparency. The US had vehemently opposed Huawei’s growth activities in its country. To become a truly global company, Huawei had to develop its market in the US. Against the backdrop of such security concerns, the case study would analyse the growth of Huawei in its home country, China, its international growth strategies and whether the hue and cry raised by the US authorities on security concerns would really impede the growth of Huawei globally.

During the first three quarters of 2020, the Chinese telecoms and smartphone giant reported revenue of 671.3 billion yuan (about USD $100.7 billion), an increase of 9.9% year-over-year, with a profit margin of 8%. The company said those results “basically met expectations,” but it represents a huge drop from its performance during the same period last year, when Huawei reported 24.4% growth with a profit margin of 8.7%.

The company wrote that “as the world grapples with COVID-19, Huawei’s global supply chain is being put under pressure and its production and operations face significant challenges. The company continues to do its best to find solutions, survive and forge forward, and fulfil its obligations to customers and suppliers.”

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Huawei - Future Plans

Looking to the future, Huawei’s innovation will transition as we move from an Innovation 1.0 era to an Innovation 2.0 era. Huawei said that it was going to start with smartwatches, wearables, in-car head units and it's powering the Honor Vision smart TV, although the company stuck to open source Android for its smartphones in 2020, while its wearables still use LiteOS at the time of writing.

The company says, "In Innovation 2.0, based on our vision for the intelligent world we are entering, we will aim to break the bottlenecks in theories and basic technologies that have hindered the development of ICT. In this stage, we will focus on theoretical breakthroughs and inventions, which means going from 0 to 1. "

The philosophy of Huawei’s Innovation 2.0 will bring together universities and research institutes and connect the academia with businesses, to allow all types of global scientific research resources and talent to come together in the pursuit of innovation.

To better implement Innovation 2.0, Huawei will adopt a number of approaches, including supporting the research programs of universities and research institutes, building its own labs, and investing along multiple technological paths.

Huawei - FAQs

What services Huawei provide?

Huawei Technologies designs, develops, and sells telecommunications equipment and consumer electronics.

Can Huawei phones be used in India?

Yes, Huawei phones are used in India as it was relaunched in January 2020 itself.

Can Huawei still use Google?

Despite executive comments to the contrary, Huawei says it's still open to using Google services after being forbidden from including them on devices last year.

How does Huawei make money?

There are around 3 core business units in the company, Telecom Carrier Networks, Enterprise Business and Devices or manufacturing communication devices.

Where was Huawei banned?

The company was blacklisted in 2019 by Trump when the US alleged that it was too close to the Chinese government.

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