Huawei, beset by allegations of espionage, intellectual property theft, and security vulnerabilities in its software, is desperate to flip the script. The Chinese juggernaut this week is trying to shift attention to the future at its Global Analyst Summit by highlighting 5G deployments that are underway and its plan to pursue a more rapid pace of innovation.
The world’s largest network equipment maker forecasts there will be 2.8 billion 5G users worldwide by 2025, and expects the evolution to 5G networks to drive growth of at least 10% in its carrier business this year. If the first few months of 2019 are any indication, Huawei should hit that goal. The company has inked 40 contracts for 5G commercial networks to date, marking a 33% increase in 5G contracts during March.
Huawei’s lead in 5G radio access network (RAN) equipment is being recognized by the industry at large. Despite its exclusion from the United States, the company is projected to have a two-point lead in terms of the share of 5G subscribers served by its equipment in 2023, according to a new report from Strategy Analytics. Huawei, Ericsson, and Nokia are each forecast to serve between 22% and 25% of global 5G subscribers on their respective equipment by 2023, but Huawei is projected to be in the lead.
“[Research and development] investment backed by market scale is the most crucial factor for the long term competitiveness of 5G infrastructure vendors,” Guang Yang, analyst at Strategy Analytics, wrote in a prepared statement. “Huawei has maintained steady growth in its 5G [research and development] investment, which bodes well for long-term advances in energy efficient, cost effective 5G technology.”
Eyeing Future Innovation
Building on that strength, Huawei says it wants to foster new industries and set a new direction for telecom by leading the industry in technical architecture, product architecture, and pace of development. William Xu, director of the board and president of the Institute of Strategic Research of Huawei, said the company is moving into the era of “innovation 2.0” by investing $300 million per year into academic research in science and technologies. Artificial intelligence (AI) will play a leading role in that effort.
“Connectivity, computing, and cloud will be the underlying infrastructure of the intelligent world, and AI will power this new world,” David Wang, executive director of the board at Huawei, said in a prepared statement. “Looking to the future, we will redefine Moore’s law and challenge the Shannon limit to deliver the world’s best connectivity, and redefine the computing architecture to make computing power more accessible, more affordable. We will also build the best hybrid cloud for industry digitization, and use full-stack, all-scenario AI solutions to make AI pervasive.”
During its annual gathering with analysts, Huawei announced an initiative to collaborate with multiple vendors to advance its 5G cloud VR business and drive wider adoption of a cloud VR ecosystem with contributions from more than 60 companies, including vendors, network operators, chipset manufacturers, and screen makers. The goal of the VR OpenLab is to reach 100,000 cloud VR customers this year.
Reaching Out to Apple
Huawei is also pursuing shifts in strategy that could dramatically changes in prospects in the smartphone market, where it sits as the third largest vendor globally. Ren Zhengfei, founder and CEO of the company, told CNBC in an interview that Huawei is open to selling its 5G chips and other silicon to Apple.
The iPhone maker has been using chips from Qualcomm and Intel, but it’s in a pitched legal battle with Qualcomm relating to patents and unlikely to revive that partnership. Qualcomm has a 5G-capable modem, but Intel’s 5G offering isn’t expected to be released until 2020. Apple, which isn’t expected to release a 5G iPhone until late 2020, is also making moves and hiring to eventually develop its own chips in house.
Ren has been making the rounds with media of late, speaking more forcefully about Huawei’s position in the market and dismissing allegations that have embroiled the company in controversy. The most prominent, perhaps, being a lawsuit the company filed last month against the U.S. government that challenges a ban on its equipment.
“The United States has been attacking Huawei for over 10 years, no matter how minor the issue. We have done everything that we can to remain silent and tolerant. But being tolerant does not mean we are numb. Being silent does not mean we are cowards,” Ren told the Los Angeles Times.
Multiple unnamed Huawei employees and companies that do business with Huawei told the newspaper that there is widespread belief that Chinese intelligence agents have infiltrated the company and routinely monitor conversations. Huawei has never been caught in an act of espionage and U.S. officials have never provided proof to support its claims, but an air of nagging suspicion hangs over the company because of where it’s headquartered and the undeniable power the Chinese government holds over its citizenry and businesses that operate there.