Huawei Technologies (China)

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Huawei (pronounced "Wow-way") is truly a force to be reckoned with in global telecoms. The company is now the world's biggest manufacturer of mobile infrastructure equipment, supplying all but five of the top 50 telecoms providers globally. It has around 22% global market share, well ahead of rivals Nokia (13%), Ericsson (11%) and ZTE (10%). More recently though, it has turned its attention to the consumer market, launching its own handsets with considerable success. In 2013, it became the global #3 in smartphones behind Samsung and Apple, and moved up to second place for the first time during 2018 ahead of Apple. Total volumes for 2018 topped 200m for the first time in 2018. (See latest figures here). Key handset models include the top-of-the-range Mate series (equivalent to Samsung's Galaxy), P20 and P10. Honor is a low-end sub-brand. The group also makes Matebook laptops and Mediapad tablets. On the back of this success it became the first Chinese brand to enter Interbrand's annual ranking of Best Global Brands in 2014. Almost incredibly the business was only established in 1987, and is still a private company owned collectively by its employees, rather than a state-owned enterprise. Founder Ren Zhengfei is CEO but shares management responsibility with a team of partners who rotate the role of chairm,an between them. Huawei also has a broad global footprint. Revenues for 2017 were around $92.5bn, having more than doubled in just three years. Network and enterprise solutions around for around two-thirds of revenues, and consumer devices for the remaining third. Around half of sales are generated in China, with another quarter from the EMEA region. One of the group's weakest markets is the US: its networking equipment was all but banned there in 2012 over concerns for national security. There are similar restrictions in Australia, and some other countries including the UK are considering following suit. The business was founded in 1987 as the agent in mainland China for a Hong Kong company manufacturing network components. It began developing its own network hardware a decade later, and its first smartphones in 2012. The company is privately owned by its employees.

Capsule checked 14th November 2018

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Recent stories from Adbrands Weekly Update:

Adbrands Daily Update 8th Mar 2019: Huawei launched a lawsuit against the US government in protest at the Trump administration's campaign to block usage of the company's products in America and allied countries. Huawei alleges that the move to ban federal agencies from buying Huawei gear or doing business with contractors that do is a violation of the US Constitution. It says that the government is deliberately damaging its reputation around the world without evidence and without giving Huawei a chance to defend itself. Although Huawei is a privately owned business, not state-controlled, the US claims it presents a threat to national security and that its equipment could be used by Beijing to spy on America and its allies.

Adbrands Daily Update 31st Jan 2019: Looks like the smartphone boom is over, at least for established leaders Samsung and Apple. Market watcher IDC reported sharp declines for both in the final quarter of 2018, as well as a 5th consecutive decline in global quarterly shipments for the market as a whole. Samsung came out on top for the year at 20.8% global share but it faces immense competition in 2019 from Huawei, whose volumes soared by 44% in the final quarter, compared to a 6% decline for Samsung and 12% fall for Apple. Two other Chinese challengers, Oppo and Xiaomi, were also up in the final quarter but rather more modestly. The top five manufacturers accounted for over two-thirds of global volumes in 2018, leaving other companies to scrabble for scraps of the remaining market.

Adbrands Daily Update 29th Jan 2019: The US escalated its war with Huawei Technologies, filing criminal charges which accuse the Chinese company of violating trade sanctions against Iran and also of stealing trade secrets from its US business partners, including specific technology used by T-Mobile USA to test smartphones. The sanction violations were, say prosecutors, orchestrated by Huawei's CFO Meng Wanzhou, who is currently under arrest in Canada at the request of American authoritities. They are seeking her extradition to the US. "Huawei relied on dishonest business practices that contradict the very economic principles that have allowed American companies and the United States to thrive," said FBI Director Christopher Wray. "There is no place for this kind of criminal behavior in our country." Huawei has denied the allegations.

Adbrands Daily Update 7th Dec 2018: The war between the US government and Huawei Technologies - and by extension with China - ratcheted up a notch with the arrest in Canada of Huawei's CFO Sabrina Meng, also the daughter of the company's founder and CEO, and his likely successor. The arrest was made at the request of the US, which has applied for extradition, alleging violations by Huawei of sanctions against doing business with Iran. Also this week, in response to growing pressure from the US on its allies to stop using Huawei infrastructure, BT said it had removed the Chinese company's equipment from its voice and data networks.

Adbrands Weekly Update 29th Nov 2018: The US government has stepped up a campaign to encourage its allies not to use mobile telecoms infrastructure supplied by Chinese company Huawei Technologies, citing cybersecurity risks. These worries pre-date the Trump administration: they were originally voiced in a 2012 congressional report which named Huawei as a potential national security risk. Those fears have accelerated with the imminent rollout of 5G technology and what is likely to be much wider usage of "internet of things" connectivity, for example in manufacturing. The complexities of 5G networks make them more vulnerable to cyberattacks. Huawei's infrastructure equipment is already in effect blacklisted within the US and several other countries have imposed or are considering a similar shutdown. Australia this year banned both Huawei and fellow Chinese supplier ZTE as suppliers of domestic 5G technology; New Zealand imposed a ban on Huawei this week. The Chinese company denies all suggestions of interference, pointing out that it is a private company owned by its employees not by the state.

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