Learn the History of Huawei

Huawei is one of the world’s largest manufacturers of smartphones and other mobile electronics. The Chinese technology company employs around 194,000 people worldwide. In 2019, it generated a turnover of 123.33 billion US dollars.

Shenzhen – Huawei smartphones are very popular internationally. They have earned a good reputation due to low prices and, in particular, powerful cameras. The technology company is no newcomer to China: it was founded in 1987.

Huawei: foundation and beginnings

Huawei’s history began in 1987. Until the 1980s, China’s telecommunications infrastructure lagged behind developments in the Western world. The Chinese government wanted to change this and launched strategic modernization measures. IT engineer Ren Zhengfei took advantage of this environment and founded the technology company Huawei with the aim of building on the successes of foreign competitors. The company headquarters are still located in the metropolis of Shenzhen on the border with Hong Kong.

In the early years, the company mainly sold telephone systems imported from nearby Hong Kong to the People’s Republic. In addition, Ren started to set up research and development in-house very early on. Three years after its foundation, Huawei already had 500 employees working in development.

In 1993, Huawei launched the C&C08 switching system. This initially caught on in rural areas and small towns, but later also in major cities. It ensured a rapid growth in Huawei’s market share in China. The company also benefited from the Chinese government’s plans to make national companies fit for the global market and to limit competition from foreign competitors in the domestic market.

Huawei: International expansion

After its success in its own country, Huawei also became active abroad. In 1997, it signed a contract with Hutchison Whampoa. This globally active conglomerate, headquartered in Hong Kong, is primarily involved in the areas of port services, real estate and hotels, retail and the energy sector. Further collaborations with international telecommunications companies followed. In the course of this, Huawei opened several research and development centers abroad, including one in Stockholm in 2000. This marked the start of the company’s activities in Europe.

Five years later, the revenue generated abroad exceeded that of domestic business for the first time. Huawei supplied its telecommunications equipment to developing countries in Africa and China’s neighbors in Southeast Asia in many cases.

In 2008, Huawei entered into a joint venture with Symantec to develop security software. Huawei held 51 percent, with Symantec holding 49 percent. At the end of 2011, the company was fully owned by Huawei.

Huawei: corporate structure and business areas

The company’s founder, Ren Zhengfei, is still a member of the 16-person management team and is the only one with veto power over all decisions. His daughter Meng Wanzhou is standing in for the current chairman, Liang Hua (as of March 2021). What makes Huawei special is that it regularly rotates the top position among the members of the management team. In addition, the company is owned by its employees, and it is intended to remain so – Huawei founder Ren Zhengfei has no plans for an IPO.

In its home country of China, Huawei’s core business continues to consist of the development, production and provision of network infrastructure – most recently also for 5G. In addition, the company supplies foreign providers with technology such as antennas for Wi-Fi broadband networks and optical transmission systems. In Germany, these include:

Deutsche Telekom
Vodafone
Telefónica

The Enterprise division focuses on business customers and includes the following services:

Solutions for network infrastructure
Solutions for cloud computing
Data center management for companies, institutions and administrations

Huawei’s customers include renowned names such as Siemens, which worked with the Chinese technology company to modernize Deutsche Bahn’s GSM-R mobile communications network. Other companies that work with Huawei in Germany and Europe include the research facility CERN (European Organization for Nuclear Research) and the software company SAP. Huawei’s German headquarters are located in Düsseldorf.

Huawei: A successful smartphone division and its end

Since 2011, Huawei has also been offering smartphones, tablets and wearables in Germany. The technology company was initially the third-largest manufacturer of cell phones worldwide, after Samsung and Apple. In China, it replaced Apple in 2015 and took second place in its place. In the wake of the Covid-19 pandemic, Huawei managed to become the world market leader in this sector, with 55.8 million smartphones sold.

Initially, Huawei established itself in Germany and Europe with affordable entry-level smartphones. In the meantime, the manufacturer has also discovered the premium sector and has devices in all classes in its portfolio. However, the smartphone division suffered a slump abroad after the United States put the company on a blacklist in the trade war between the two countries. For Huawei, the biggest problem abroad is that it uses the Android operating system, which Huawei uses in an adapted version for its smartphones, wearables and tablets. It comes from the manufacturer Alphabet Inc., which is backed by the Google group. Due to the embargo, the latter terminated the licenses without which various Google services are no longer available. Huawei therefore developed its own operating system for its smartphones.

The US accuses Huawei of close ties to Chinese authorities and warns of the risk of espionage and sabotage. The company rejects the allegations.

In addition to smartphones, Huawei offers other mobile devices. These include, in particular, tablets such as the MatePad, MatePad Pro and the MatePad T10 / T10s. The devices are in the lower price ranges and, like the smartphones, are equipped with a customized Android operating system. The technology company also has matching accessories for the smartphones and tablets, such as headphones and charging cables.

Huawei: Successful despite US sanctions

 

Despite a significant decline in sales due to US sanctions, Huawei recorded a record profit in 2021. As the company, based in Shenzhen in southern China, announced in March 2022, sales fell by 28.6 percent to around 636.8 billion yuan (91.1 billion euros). Despite difficult conditions, however, profit rose by almost 76 percent to around 113.7 billion yuan.

The US measures have had a significant impact on Huawei’s business, said CFO Meng Wanzhou at the presentation of the report. She cited the effects of the coronavirus pandemic as another reason for the decline in sales. In addition, the network equipment provider had previously benefited from the rapid expansion of the 5G network in China, which was largely completed in 2021. Huawei has proven “that we are increasingly better at dealing with uncertainties,” Meng said, referring to the record profit.

Huawei: New activities in the automotive industry

The company is also continuing to diversify. In 2020, Huawei began expanding its activities into the automotive industry. In particular, the company wants to focus on the research and development, production and maintenance of automotive parts and intelligent automotive systems. In August 2020, it expanded its business licenses in China to include these activities. The first activities are already underway. At the end of 2020, Huawei announced a collaboration with the electric car battery manufacturer CATL (Contemporary Amperex Technology) and the carmaker Chongqing Changan Automobile Company to develop and produce electric cars.

Huawei entered into a cooperation with Changan Automobiles in the field of connected driving as early as 2014. In 2019, the companies founded an innovation center for connected intelligent mobility.

In March 2021, the portal t3n reported that the first models were in development. The factories of the partner Changan are to be used for production. Negotiations with suppliers are also said to be underway.

Huawei under fire: Plagiarism and espionage allegations

Huawei has often faced criticism in its history. As early as the early 2000s, the IT company Cisco accused Huawei of copying the hardware and software of network components down to the last detail. The accusation was confirmed in court in 2003 in the area of software. Both companies agreed to an out-of-court settlement. A year later, independent observers confirmed that Huawei had complied with the settlement. 

In the summer of 2014, the Taiwanese electronics manufacturer Hon Hai withdrew its letter of intent to purchase Huawei’s planned 4G equipment. The government in Taipei warned that this could make espionage easier and thus pose a risk to national security.

Other accusations were not confirmed after a thorough investigation. In 2012, Australia initially excluded Huawei from the national broadband network. According to the Chinese technology company, however, the differences have been overcome. Deutsche Telekom ruled out security vulnerabilities in routers from Huawei in the summer of 2015.

In December 2018, the company’s Chief Financial Officer Meng Wanzhou was arrested in Canada at the request of the US authorities, leading to a diplomatic crisis that lasted several years. The US government accused her of circumventing US sanctions against Iran. However, after a change in the evidence, Meng was able to strike a deal with the US court in question and return to China in September 2021.