Since its foundation in 1987 as a telecommunications company, Huawei has grown into one of the largest smartphone brands globally. Huawei Technologies Co., Ltd. operates as a private company in Shenzhen, Guangdong, China. The Chines firm ranked 88th in Forbes’ Most Valuable Brands 2018, holding a 7.3-billion USD brand value.
While it’s most popular as a consumer electronics manufacturer, it also provides telecommunications manufacturing, operational and consulting services, and more. Its products include tablet computers, smart TVs, and mobile networks. Today, Huawei offers its products and services to over 170 countries worldwide.
Ren Zhengfei, the Man Behind Huawei
As a son of school teachers from a mountain town in the Guizhou Province, Ren Zhengfei studied civil engineering and architecture. A few years after he graduated and landed a job in his field, he joined the military as a Technician, Engineer, and later a Deputy Director. While he was a soldier in the Engineering Corps, Ren Zhengfei helped create the Liao Yang Chemical Fiber Factory.
This achievement was one of his many outstanding performances that brought him to the 1978 National Science Conference and the 1982 National Congress of the Communist Party of China. In 1983, the Chinese government disbanded the Engineering Corps, forcing Ren Zhengfei to retire. Shortly afterward, he landed a job in a logistics service base of the Shenzhen South Sea Oil Corporation.
Feeling unfulfilled in that job, Ren Zhengfei left it and established a telecommunications company in 1987 to fill a gap in the country’s undersized telecommunications market. Many other businessmen saw the same deficiency in the market, leading to the formation of hundreds of other networking companies.
It kept Ren Zhengfei from securing any bank loan to use as capital for his firm. With financial help from five other colleagues, he created Huawei with a capital that only reached CNY 21,000 (or close to 5,000 USD). The company sprang up in Shenzhen, away from much bigger cities with fierce competition, like Shanghai, Guangzhou, and Beijing.
Products that Helped Huawei Grow
In its early days, Huawei operated as a sales agent for Private Branch Exchange (PBX) systems. When the PBX business was sold off, Ren Zhengfei led the firm into researching and developing PBX products from scratch. Within a few years, Huawei released several switchboards for hotels and small businesses, throwing the company into the telecom equipment industry. In 1992, the brand launched a rural digital switching solution. After three years, it generated 1.5 billion CNY from its clients in the rural Chinese markets.
Entry into the Metropolitan Scene
Huawei’s R&D solutions led to its launching of several wireless GSM-based solutions in 1997. A year later, it expanded its networking businesses, reaching into the cities. This growth led the firm overseas to Bangalore, India, establishing an R&D center. The facility earned a CMM level-4 accreditation in 2001 and a CMM level-5 accreditation in 2003. These certifications prove that the business had a well-managed and well-defined process for development, ongoing quality improvements, and client focus.
The firm erected more overseas R&D centers in Sweden and the US in the following years. The brand also worked with other industry giants. In 2003, Huawei and 3Com launched a joint venture for developing enterprise data networking solutions. With the former’s technology and engineers and the latter’s funding, the collaboration produced Ethernet switches and IP routers for enterprises.
Siemens also worked with the brand in 2004, leading to the development and launch of TD-SCDMA technology. The Time Division-Synchronous Code Division Multiple Access or TD-SCDMA is a 3G mobile network standard for Chinese telecommunications. Huawei also signed a contract with Dutch operator Telfort in the same year, leading to its first contract in Europe valued beyond 25 million USD.
Now mainly a telecommunications brand, the company’s domestic and overseas operations, contracts, joint ventures, and overall success continued to rise. By 2008, it ranked third on BusinessWeek’s list of the World’s Most Influential Companies after Apple and Google. It was also the world’s top international patent seeker at that time, with 1737 applications published within the same year alone.
Its unceasing drive to expand its reach, R&D, and quality brought it many more achievements in the following years.
Huawei’s Acquisitions Throughout the Years
As the company continued to grow, it also began acquiring other brands in the IT and tech hardware industries. One notable acquisition occurred in 2014 when the tech giant bought Neul, a UK developer of wireless network technology, for 25 million USD. Neul is also a leading R&D center for end-to-end solutions, which will boost Huawei’s IoT offerings.
Toga Networks is an Israeli IT company and a long-time research partner of Huawei. In 2016, a deal worth 150 million USD arose between the two firms. The former became a subsidiary focused on providing advanced tech research and high-level designs for the IT and telecom markets.
In 2019, the telecom giant purchased Vocord, a Moscow-based company specializing in facial recognition tech. Its other fortes are video surveillance and analysis, license plate recognition, audio recording, and video enhancement and authentication. Vocord’s technology bolstered the Chinese giant’s offerings in the same fields. CEO Ren Zhengfei has also admired Russian scientists’ creativity and diligence for a long while, and this was his chance to recruit and work with them.
Scandals and Controversies
Issues Concerning the ties to the Chinese Communist Government was one of the largest scandals in the companies history, although Huawei claimed that it had no special relationship with the country’s Communist government. Yet, many have observed how the Chinese Communist government has acted more leniently with Huawei than with other companies in the same boat.
The Chinese government has also acted protectively in Huawei’s favor. For example, in mid-2018, Australia excluded Huawei and ZTE from its 5G network. Two years later, China imposed tariffs on Australian imports.
Another example is when the company’s CFO, Meng Wanzhou, was detained in Canada for fraud charges in late 2018. In response, China arrested Canadian nationals Michael Kovrig and Michael Spavor and charged them with espionage endangering China’s national security. It led to a game of “hostage diplomacy.” There isn’t any conclusion to these ongoing geopolitical issues yet.
Espionage Allegations and the Huawei Ban
In 2017, Chinese President Xi Jinping publicized a new national intelligence law and the 2014 Counter-Espionage Law. Both laws compelled Chinese businesses to work with the country’s intelligence and security agencies when requested. As a Chinese brand, Huawei has to cooperate with the state, which risks the safety and privacy of its clients in China and overseas.
Researchers from the Henry Jackson Society also found that many of the firm’s employees were agents for China’s Ministry of State Security, worked on projects with the Chinese People’s Liberation Army (PLA), or had been in a military unit connected to a cyberattack on US corporations. These and many more allegations put the brand in a bad light. In 2020, The Federal Communications Commission declared Huawei products as national security threats.
These activities and events led to the Huawei ban. Suddenly, the brand couldn’t work with Google, Intel, Qualcomm, and many other companies. So far, there is no conclusion to this issue yet.
Huawei During the Pandemic
Like many companies hit during the pandemic, the handset company’s sales dropped in Q1 of 2020 by 16.5%. Despite this initial downturn, the firm bounced back with new products for the market and a system that allowed their employees to continue working. The brand developed technology that allowed for improved telemedicine. Some aspects included 5G+ remote video counseling, AI-assisted diagnosis, internet hospitals, and AI-assisted drug screening.
Huawei also set up canteens to serve its employees throughout the pandemic. It adopted remote working conditions, scientific prevention practices, and control measures to ensure its employees’ safety and health. In 2021, it had over 195,000 employees and was the 8th on the World’s Best Employers list and the highest-ranked Chinese corporation.
Huawei Today
The most popular consumer offerings from Huawei include its smartphones, tablets, PCs, and laptops. It also sells smart TVs, audio accessories, and wearables. The telecom corporation develops apps like EMUI, HiSuite, and Audio Assistant for its smart devices, too. On the enterprise side, Huawei’s offerings cover the desktop, laptop, tablet, and printer markets.
As a global provider of information and communications technology, the brand also manufactures and designs connectivity tools. These include mesh systems, mobile routers, and Wi-Fi routers. Other products include consultancy and managed services, cloud computing, and automation.
