Company Brief
Huawei Technologies

by Faulkner Staff

Copyright 2023, Faulkner Information Services. All
Rights Reserved.

Docid: 00011203

Publication Date: 2301

Report Type: VENDOR

Preview

Huawei Technologies is a leading global telecommunications solutions
provider and China’s largest manufacturer of telecommunications equipment.
The company’s products and services comprise telecom network
infrastructure, devices, core network products, software, and professional
services. Huawei has been adjusting its business strategy as a result of
US sanctions against the company. In addition to charges of intellectual
property theft, Huawei’s close ties with the Chinese government and
military have raised cybersecurity concerns and allegations that their
equipment can be used for surveillance, both domestically and
internationally. This brief highlights the company’s structure and recent
activity.

Report Contents:

• Fast Facts
• History
• Key Executives
• Major Products
• Major Competitors
• Recent Activity

Fast Facts

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Name: Huawei Technologies
Headquarters
Bantian 
Longgang District 
Shenzhen 518129 China
+86-755-2878-0808
Fax: +86-755-2878-9251
Web: http://www.huawei.com/
Type of Vendor: Telecom Solutions Provider
Founded: 1988
Service Areas: Over 170 countries
Employees: 197,000

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History

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Huawei is one of the world’s largest global telecommunications solutions
providers and China’s largest manufacturer of telecommunications
equipment. The company’s products and services portfolio encompasses
telecom network infrastructure, devices, core network products, software,
and professional services. Huawei’s solutions are deployed in more
than 170 countries and serve 45 of the world’s top 50 telecommunications
operators. The company’s roots can be traced back to 1988 when it was
founded by Ren Zhengfei, a former officer in the Chinese army. The next
year, it started developing and marketing its own PBX. In 1993, it entered
the mainstream telecommunications market with the launch of its C&C08
digital switch. Then in 1995, the company established the Beijing R&D
center, which achieved CMM Level-4 accreditation in 2003.

1996 saw the company win its first overseas contract from Hong Kong’s
Hutchison-Whampoa to provide fixed-line network products. It also
established a Shanghai R&D center, which achieved CMM Level-5
Certification in 2004. In 1997, Huawei launched GSM equipment and
established joint R&D labs with Texas Instruments, Motorola, IBM,
Intel, Agere Systems, Sun Microsystems, Altera, Qualcomm, Infineon, and
Microsoft. It obtained a patent for the Digital Micro-Cellular Server
Control Switcher in 1998. In the following year, the company was elected
as the principal supplier for China Mobile’s nationwide CAMEL Phase II
compliant IN network.

In 2000, it established R&D centers in the Silicon Valley and Dallas
in the US. The next year, it became a member of the International
Telecommunications Union (ITU) and sold Avansys to Emerson Electric. In
2002, Huawei passed TL9000 Quality Management System authentication by
Underwriters Laboratories (UL) and was selected by China Mobile to launch
the world’s first mobile wireless LAN. In 2003, the company was sued by
Cisco for alleged patent infringement; it agreed to modify some products
and the lawsuit was withdrawn. Also in 2003, Huawei established a joint
venture with 3Com to deliver an enterprise data network; it also set an
industry record with the deployment of 100 million ports of C&C08
worldwide. 2004 saw the establishment of a joint venture with Siemens to
develop TD-SCDMA mobile communication technology targeted for the China
market and won China Telecom’s national backbone optimizing contract. In
2005, it was granted permission from the National Development and Reform
Commission (NDRC) of China to produce and sell wireless handsets.

Huawei collaborated with Motorola in 2006 to bring a portfolio of UMTS
and HSPA infrastructure equipment to customers worldwide; it also
announced a 3G agreement with Leap Wireless and partnered with Vodafone to
manufacture Vodafone-branded consumer 3G handsets. In 2007, the company
was awarded a Vodafone Global Supplier Award and announced a joint venture
company with Symantec. It obtained Wave 2 certification in 2008 from the
WiMAX Forum for its WiMAX DBS3900 base station and the BM325 and BM625
terminal products, each based on the WiMAX 802.16e standard. It also
signed a technology transfer agreement with QUALCOMM and announced a
patent license agreement with Nokia and Nokia Siemens Networks. In 2010,
Huawei announced plans to acquire M4S from Option. In 2011, it
purchased Symantec’s 49 percent stake in the companies’ joint venture for
$530 million USD. It also unveiled a cloud computing strategy for
North America. In 2014, the company reported that is had adjusted its
business structure to focus on three dimensions: customers, products, and
regions. In 2015, Huawei unveiled its mobile broadband 2020 strategy,
which focuses on supporting 6.7 billion mobile broadband users, supporting
a 1 Gbps access rate, and supporting one billion connections. In 2017,
Huawei reported plans to expand its server portfolio to provide Hybrid
Cloud technology for Microsoft Azure Stack. In 2018, Huawei launched the
Digital Platform for smart cities, which was created to help organizations
develop, test, and deploy smart urban configurations that utilize
technologies such as AI, hybrid cloud, and the Internet of Things (IoT).

In May 2019, US President Trump stripped Huawei of its place in the US
supply chain, banning American companies from doing business with the
firm. This move has adversely affected its deployment of 5G networking
equipment as well as its smartphone lines. By 2018, the company had
surpassed Apple as the second leading manufacturer of smartphones,
trailing only Samsung. Just as it looked as if the company would surpass
even that industry leader, the US sanctions took a toll – particularly in
that it was no longer allowed to ship its Android-based phones with Google
apps pre-installed. Under the Trump administration, the company was a
major target of the US Department of State’s “Clean Networks” initiative
that essentially rallied US allies against Huawei and other Chinese
vendors. In November 2022, the US Federal Communications Commission (FCC)
announced a ban on all telecommunications equipment from Huawei because
they pose an “unacceptable risk” to US national security.

Key Executives

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Huawei has adopted a rotating CEO system under the supervision of its
Board of Directors. Three deputy chairmen take turns as the CEO for a
tenure of six months at a time. Its current list of rotating CEOs is:

• Xu Zhijun (Eric Xu)
• Hu Houkun (Ken Hu)
• Meng Wanzhou (Sabrina Meng)

Its Board of Directors is the decision-making body for corporate strategy
and management. It has established the Human Resources Committee, the
Finance Committee, the Strategy & Development Committee, and the Audit
Committee. Current members of the Board of Directors include:

• Founder and Chief Executive Officer: Ren Zhengfei
• Chairman: Liang Hua
• Deputy Chairs: Xu Zhijun (Eric Xu), Hu Houkun (Ken
  Hu), Meng Wanzhou (Sabrina Meng; also chief financial officer)
• Executive Directors: Wang Tao (David Wang), Yu
  Chengdong (Richard Yu).
• Directors: Xu Wenwei (William Xu), He Tingbo (Teresa
  He), Ren Zhengfei, Tao Jingwen, Yan Lida, Li Jianguo, Peng Bo.

Major Products

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Huawei delivers a range of telecommunications equipment which is detailed
in the table below.

Major Competitors

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Huawei’s primary rivals include:

• Apple: https://www.apple.com/
• Cisco: https://www.cisco.com/
• Ericsson: https://www.ericsson.com/
• Hitachi: https://www.hitachi.com/
• HP: https://www.hp.com/
• IBM: https://www.ibm.com/
• Juniper Networks: https://www.juniper.net/
• LG: https://www.lg.com/
• Motorola: https://www.motorola.com/
• NEC: https://www.nec.com/
• Nokia: https://www.nokia.com/
• Samsung: https://www.samsung.com/
• Tellabs: https://www.tellabs.com/
• Verizon: https://www.verizon.com/
• Vodafone: https://www.vodafone.com/
• ZTE: https://www.zte.com.cn/

Recent Activity

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report]

Huawei’s 2021 fiscal year saw the first annual revenue
decline in the company’s history as sanctions placed by the United States
and other Western nations continued to impact the company. The company
brought in revenue of 636.8 billion Chinese yuan ($99.9 billion), a 28.5
percent year-on-year decline, the first yearly drop in revenue based on
publicly available reports dating back to 2002.¹ The US has
called Huawei a national security threat and urged other nations not to
use its telecommunication equipment for next-generation 5G mobile
networks. In addition, both the Trump and Biden administrations have
restricted American firms from exporting key components and software to
the company and have sought to cut Huawei’s access to high-end chips
required for its smartphones and other hardware. As a result, Huawei’s
smartphone market share has plunged. Despite this, the company’s
enterprise business group – which includes its cloud computing operations
– has emerged as its fastest-growing division, and Huawei executives have
said the company is reorienting toward software, automotive technology,
and other business areas that don’t require as many foreign chips.²

Less than a year after being released from house arrest in
Canada ending a nearly three-year legal fight against extradition to the
US on fraud charges, Huawei’s chief financial officer Meng Wanzhou was
appointed one of the three rotating chairs responsible for overseeing the
company’s board of directors and executive committee in March 2022.³
As part of an unusual corporate structure, the three officials take
six-month turns as the company’s top leader. In December 2018, Meng,
daughter of Huawei founder and CEO Ren Zhengfei, was charged by the US
Justice Department with misleading financial services firm HSBC about
Huawei’s relationship with an Iranian subsidiary, Skycom. In September
2021, Meng admitted that she made untrue statements to the bank in 2013
about the relationship between Huawei and Skycom, leading the bank to
provide services that violated US sanctions on Iran. In exchange for the
admission, prosecutors deferred and subsequently dropped bank fraud
charges and allowed her to return home.

In May, Canada joined the US, Great Britain, Australia,
and New Zealand in implementing a ban on the use of Huawei’s 5G networking
equipment due to national security concerns. In addition to the ban,
providers who already have installed such equipment will be required to
discontinue its use and remove it by June 2024. Companies using Huawei’s
4G equipment must remove that technology by the end of 2027. According to
the Wall Street Journal, Huawei has operated for more than a decade in
Canada, running a research and development division and selling
telecommunications 5G radio and base station equipment largely to BCE and
Telus, the country’s two largest carriers.⁴

In a preliminary analysis of its 2022 performance, Huawei
said that its revenue remained relatively flat and that the US sanctions
that impacted the company deeply the year before had now become “our new
normal, and we’re back to business as usual.” In December, the company
said it expects to end the year with annual revenue of 636.9 billion yuan
(about $91.5 billion), a 0.02 percent increase over the previous year.⁵
Chair Eric Xu said Huawei’s core business of selling telecom
infrastructure saw increased growth as the year progressed and the decline
in the company’s consumer device business stabilized. While a modest
increase over the 2021, the number falls well short of making up for the
nearly 30 percent revenue downfall between 2020 and 2021. In 2019, the
company reported record sales of $122 billion.

Sources

¹ Arjun Kharpal. “Huawei Posts First-Ever Yearly Revenue
Decline as US Sanctions Continue to Bite, but Profit Surges.” CNBC. March
28 2022.

² Dan Strumpf. “Huawei’s Software Business Booms, as Its 5G
Sales Suffer.” Wall Street Journal. March 10, 2022.

³ Dan Strumpf. “Huawei Promotes Founder’s Daughter Meng to Top
Shared Leadership Post.” Wall Street Journal. April 1, 2022.

⁴ Paul Vieira and Jacquie McNish. “Canada to Ban 5G Equipment
from China’s Huawei, ZTE.” Wall Street Journal. May 20, 2022.

⁵ Josh Horwitz. “China’s Huawei Sees ‘Business as Usual’ as US
Sanctions Impact Wanes.” Reuters. December 30, 2022.

 

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