Huawei Technologies (China)

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Huawei (pronounced "Wah-way") is truly a force to be reckoned with in global telecoms. It is the world's biggest manufacturer of mobile infrastructure equipment, supplying all but five of the top 50 telecoms providers globally, now with almost 29% global market share, well ahead of rivals Nokia (17%), Ericsson (13%), Cisco and ZTE (both 8%). More recently, it has also 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 mid-2018 ahead of Apple. Total volumes for 2018 topped 200m units for the first time. (See latest figures here). Key handset models include the top-of-the-range P30 series, the Mate (equivalent to Samsung's Galaxy), P20 and P10. Honor is a low-end sub-brand. The group also makes laptops and 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. Revenues for 2018 were around $107bn, having tripled in four years. Around half of sales are generated in China, with another quarter from the EMEA region. Network and enterprise solutions around for around two-thirds of revenues, and consumer devices for the remaining third. Almost incredibly the business was only established in 1987, originally 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. It is a private company owned collectively by its employees, rather than a state-owned enterprise. However, the US government has been waging a prolonged campaign against the business on fears that it represents a threat to national security. Huawei's networking equipment was unofficially banned in the US in 2012 on these grounds. The Trump administration has ramped up the pressure significantly, encouraging allies to join that ban while also seeking to prevent US companies from doing business with Huawei. Huawei founder Ren Zhengfei remains CEO but he shares management responsibility with a team of partners who rotate the role of chairman between them. One of the most senior of these is his daughter "Sabrina" Meng Wanzhou, company CFO. She is currently under arrest in Canada at the request of American authoritities on allegations that Huawei violated sanctions on business with Iran.

Capsule checked 14th November 2018

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Adbrands Daily Update 10th Jun 2019: Several US companies have pushed back at the Trump administration's ban on trading with Huawei, warning of the considerable risks and economic impact that will ensue. Among the most prominent protestors was Google, which has already announced that it will not supply future iterations of the full Android operating system to Huawei. However it warned the government that this will encourage the Chinese company to develop its own hybrid OS which is likely to be far more susceptible to hacking. That could create a serious security risk for the millions of US customers who already own Huawei phones. The White House's acting director of budget Russell Vought also voiced his concerns over the impact on rural telecoms companies - many of whom are already key suppliers to local government agencies and receive federal grants - but whose networks are built around Huawei technology.

Adbrands Daily Update 21st May 2019: The most serious blow to-date to Huawei from its battle with the US government is Google's announcement that it will block the company from receiving new versions of the full Android operating system, used in virtually all its handsets. That follows on from the government's addition of Huawei to its "Entity List" ban, prohibiting US companies from selling technology to the Chinese business without a specific license. Current users will not be affected, but Huwaei will potentially be banned from using the full version of the next "Q" iteration of Android, due in August. The company will still be able to use the simplified open source version. Shortly after Google's announcement, the government issued a temporary reprieve to allow US companies more time to arrange their affairs but the ban is still expected to come into force by mid-summer. Several other companies have subsequently joined Google in boycott including Intel, ARM, Qualcomm and Panasonic.

Adbrands Daily Update 16th May 2019: In the latest escalation of the US trade war with China in general and Huawei in particular, President Trump signed an executive order that will allow the administration to officially ban the import of telecoms products and services from unnamed "foreign adversaries". That could include Huawei, ZTE and other Chinese-owned suppliers. At the same time, the Commerce Department said it was adding Huawei to its prohibited "Entity List". This bars the company from purchasing any US-made technology, including components, without a license.

Adbrands Daily Update 1st May 2019: New research from market watcher IDC puts Huawei within reach of overtaking Samsung as the global leader in smartphones before the end of this year. In 1Q 2019, Huawei's volumes jumped by over 50% year-on-year to 59.1m devices, putting it within striking distance of Samsung, whose volumes slipped 8% to just under 72m. The biggest loser among the global leaders was Apple, whose volumes plunged by more than 30% to 36.4m units.

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.

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