Huawei Technologies: Executive Summary

Huawei Technologies
A Wireless Infrastructure and Enterprise Networking Capabilities

Assessment
Executive Summary
Huawei is an enigma in North America but is well known throughout other parts of the
world. Founded by Ren Zhengfei in 1987, the company has grown from its humble
beginnings in Shenzhen, Guangdong China to become a global powerhouse in
integrated communications, wireless infrastructure, smartphones and enterprise
networking.
In this brief, Moor Insights & Strategy will examine the company’s corporate structure,
historical financial performance, and some of the history of the Chinese government’s
interest in the company. Huawei has invested significantly to maintain the company’s
competitiveness especially related to 5G wireless infrastructure and enterprise
networking and should be considered as a vendor in these markets not only in North
America but globally.
Office of CEO and Corporate Business Unit Structure

Huawei employs an unusual leadership structure at the CEO level. Every six months, a
leader from different areas of its business including marketing, research and
development and individual lines of business will rotate through the CEO role. The
current acting CEO is Ken Hu whose term commenced on October 1st, 2017 and will
end on March 31st, 2018. Mr. Hu has a diverse background in marketing and sales and
currently chairs a human resources committee and leads global cybersecurity in
addition to his CEO responsibilities. Although this management structure is
unconventional, Huawei should be applauded for bringing in executives from different
areas of its business to lead the company’s direction. Extending the CEO tenures from
six months to twelve or even eighteen months may give each executive more of an
opportunity to make a demonstrable impact.
Huawei is a private company and employee-owned. It maintains three core business

units and has demonstrated market leadership in each area.
• Consumer − Includes smartphone, PC and tablet products. Huawei is now the

number three provider of smartphones just behind Samsung and Apple.
• Enterprise − Includes routers and switches, unified communication and

collaboration, information technology, vertical solutions and global service.
Huawei is the global market leader outside of North America in switches.
• Carrier − Includes wireless infrastructure.
Page 1 Huawei: A Capabilities Assessment February 2018

Copyright ©2018 Moor Insights & Strategy
Historical Financial Performance
Huawei has experienced explosive sales growth in recent years. Case in point—sales in
2015 were $61B and jumped to $75B in 2016. Sales growth for 2017 slowed somewhat
to 15% in the first half but registered close to $92B by the end of last year. From a
headcount perspective, Huawei continues to hire at an escalating rate in an apparent
effort to stay ahead of its competition. Financial strength matters and the company
continues to demonstrate solid progress with reinvestment into all three lines of its
business.
What’s also of significant note is that Huawei only derives 1% of its revenue in North
America. That gives it ample room for market expansion. Moor Insights & Strategy
believes that the recent pullback from AT&T and Verizon Wireless in the United States
for postpaid contract sales of Huawei products will probably change over time as
Huawei continues to gain market share and brand recognition globally.
The Chinese Government’s Involvement in Huawei

Founder Ren Zhengfei was educated as an engineer in the People’s Liberation Army.
When China initially set up Special Economic Zone cities − from 1980-84 − it included
Shantou, Shenzhen, Zhuhai, Xiamen and the entire island of Hainan. The concept was
to bring a free-market philosophy into these areas, inviting outside multi-national
companies to invest and collaborate in joint ventures with the Chinese government.
Domestically, the Chinese government offered incentives and investment to start-ups.
Huawei says it has never accepted governmental investment and instead, incubated
and grew its business organically.
Huawei’s Patent Portfolio and Investment

Huawei maintains an impressive patent portfolio and by the end of 2015 had received
over 50,000 patents. Furthermore, in 2013 the company made an ongoing pledge to
spend $600 million on 5G wireless research and development extending into 2018.
Huawei has also been one of Europe’s largest patent filers over the past three years.
All of this points to strengthening the company’s competitiveness.
Call to Action
Huawei is a significant player in the world of integrated communications technology. Its
unique corporate structure, wide and deep product portfolio, continued investment in
next-generation infrastructure tied to 5G wireless deployments and an underpenetrated
market share in North America should position the company well for continued long-
term success.

Important Information About This Brief
Inquiries
Please contact us if you would like to discuss this report, and Moor Insights & Strategy
will respond promptly.
Citations
This brief can be cited by accredited press and analysts but must be cited in-context,
displaying author’s name, author’s title, and “Moor Insights & Strategy”. Non-press and
non-analysts must receive prior written permission by Moor Insights & Strategy for any
citations.
Licensing
This document, including any supporting materials, is owned by Moor Insights &
Strategy. This publication may not be reproduced, distributed, or shared in any form
without Moor Insights & Strategy's prior written permission.
Disclosures
This brief was commissioned by Huawei Technologies. Moor Insights & Strategy
provides research, analysis, advising, and consulting to many high-tech companies
mentioned in this brief. No employees at the firm hold any equity positions with any
companies cited in this document.
DISCLAIMER
The information presented in this document is for informational purposes only and may
contain technical inaccuracies, omissions, and typographical errors. Moor Insights &
Strategy disclaims all warranties as to the accuracy, completeness, or adequacy of such
information and shall have no liability for errors, omissions, or inadequacies in such
information. This document consists of the opinions of Moor Insights & Strategy and
should not be construed as statements of fact. The opinions expressed herein are
subject to change without notice.
Moor Insights & Strategy provides forecasts and forward-looking statements as

directional indicators and not as precise predictions of future events. While our forecasts
and forward-looking statements represent our current judgment on what the future
holds, they are subject to risks and uncertainties that could cause actual results to differ
materially. You are cautioned not to place undue reliance on these forecasts and
forward-looking statements, which reflect our opinions only as of the date of publication
for this document. Please keep in mind that we are not obligating ourselves to revise or
publicly release the results of any revision to these forecasts and forward-looking
statements in light of new information or future events.
©2018 Moor Insights & Strategy. Company and product names are used for
informational purposes only and may be trademarks of their respective owners.


Huawei Technologies: Executive Summary

Uploaded by

Copyright:

Available Formats

Huawei Technologies: Executive Summary

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Huawei Technologies: Executive Summary

Uploaded by

Copyright:

Available Formats

Huawei Technologies

A Wireless Infrastructure and Enterprise Networking Capabilities

Office of CEO and Corporate Business Unit Structure

Huawei is a private company and employee-owned. It maintains three core business

• Consumer − Includes smartphone, PC and tablet products. Huawei is now the

• Enterprise − Includes routers and switches, unified communication and

• Carrier − Includes wireless infrastructure.

Page 1 Huawei: A Capabilities Assessment February 2018

The Chinese Government’s Involvement in Huawei

Huawei’s Patent Portfolio and Investment

Page 2 Huawei: A Capabilities Assessment February 2018

Moor Insights & Strategy provides forecasts and forward-looking statements as

Page 3 Huawei: A Capabilities Assessment February 2018

You might also like