Huawei founder signals enterprise unit ramp, ready to chew the fat with Biden
- Huawei founder Ren Zhengfei in bullish mood
- New enterprise business could make up for handset sales dip
- He’d be happy to get on the phone with the new US President
With Joe Biden successfully inaugurated as the new US President, Huawei seems to believe there might be a thawing of relations with the global superpower – so much so that the Chinese vendor’s founder Ren Zhengfei has sent a “you know where to find me” message to the Biden administration.
He might be waiting a while…
More importantly, Ren (pictured above) suggested the Chinese vendor’s enterprise tech business might be set to ramp up significantly.
Ren occasionally makes himself available for media Q&A sessions and, when he has a message he wants widely spread, the Huawei PR machine is used to share a transcript. The message this time? We’re fine, thanks (despite US sanctions and multiple 5G market exclusion), we’re available for a chat if an olive branch would be welcomed by Biden’s team, and watch out for a new era of 5G-enabled enterprise technology solutions.
The occasion of the media Q&A was the opening on an ‘Intelligent Mining Innovation Lab’ in Taiyuan, China. That’s significant because it’s an example of Huawei pushing further into enterprise verticals, where 5G is regarded by many as a catalyst for business growth and operational efficiencies (particularly in manufacturing). Ren is one of those keen to associate 5G with enterprise opportunities: “In the 5G era, connecting businesses is the main goal,” he noted, adding later that Huawei’s goal is to provide communications technology systems and platforms that are applicable to any industry. It’s also worth noting that China alone has more than 8,000 mines – hence the innovation lab.
Here are the highlights of Ren’s responses to media questions. There were many more questions, but here are what I think are the juicy ones (I amended the wording for brevity) and the most important one is at the end:
Can Huawei survive?
Ren: “I am even more confident about Huawei's survival than I was [a year ago], because we have more ways to overcome those challenges. Our sales revenue and profits in 2020 were higher than last year's,” said Ren. He didn’t cite numbers, but figures alleged to come from Huawei’s internal accounting systems suggest the company’s full year 2020 revenues increased by 11.2% to $136.7 billion and its profits grew by more than 10% to $9.9 billion. How is that possible when Huawei’s telco carrier business has been under pressure and its smartphone sales plummeted as chip supplies dried up? The company is focused on tech products but its range is diverse – Ren suggested, for example, that sales of Huawei earphones are set to hit $10 billion per year, though a timescale was not mentioned.
Might the Biden administration go so far as the remove Huawei from the Entity list?
Ren: “I think it's very unlikely that the US will remove us from the Entity List. I won't say it's impossible, but it's extremely unlikely. We basically aren't considering it a possibility.” [But you can bet your bottom dollar that Huawei is now hell bent on making that a more likely possibility…]
If US President Biden called you, what would you say to him?
Ren: “I would welcome that, but he hasn't called. You have my email address and telephone number… I would talk with him about common development. Both the US and China need to develop their economies, as this is good for our society and financial balance. Everyone needs this. As humanity keeps making progress, no company can develop a globalized industry alone. It requires concerted efforts around the world.” [Subtext: I am waiting for your call that will almost certainly never come.]
Will relations with the US thaw under a Biden administration?
Ren: “Allowing US companies to supply goods to Chinese customers is conducive to their own financial performance. If Huawei's production capacity expanded, that would mean US companies could sell more. It's a win-win situation. I believe the new administration will weigh and balance these interests as they consider their policies. We still hope to be able to buy a lot of US components, parts, and machinery so that US companies can also develop with the Chinese economy… I hope the new US administration will come up with more open policies that are in the interests of US companies and the US economy as a whole.”
Can new enterprise opportunities for Huawei offset the dip in device sales [from the supply chain issues and the sale of the Honor smartphone line]? If so, when? (Question asked by David Kirton from Reuters.)
Ren: “I think more or less within this year.”
This year? That would represent a significant leap in Huawei’s enterprise business and is the response that might strike fear into the hearts of those who wish Huawei would collapse or at least just become a domestic supplier of tech to Chinese enterprise and consumer customers.
Does Huawei really now have the chops to deliver technology solutions for enterprises around the world (excluding the US, of course) that are of equal or better technical quality than its rivals at cost points that would attract enterprise CFOs?
Don’t bet against it.
- Ray Le Maistre, Editorial Director, TelecomTV
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