Huawei: The Meteoric Rise of a 30-year Old Titan
From a few years to this part, a Chinese technology company called Huawei (pronounced ‘wahway’ does not stop hogging headlines. Many, especially in recent months, because of the trade war between China and the United States. Also for the veto that the Trump Administration has put on the company, apart from pressuring all its allies to stop using Huawei equipment on their 5G networks.
But this Chinese company has been making noise for a longer time, and not precisely because it has the US government as a declared enemy, but because of its smartphone sales and the price-quality ratio of its equipment for network development. Above all, for 5G. When you hear about it, many may think that it is a company established several decades ago and with a long history behind it. But nothing is further from reality since Huawei is just over 30 years old.
History of Huawei
Huawei was born in 1987 in China, and its creation cannot be understood without the opening measures that Deng Xiaoping started back in 1978. At the time, China was a country far behind with respect to others in various aspect, more particularly in technology. Deng Xiaoping, the then Chinese president took the first steps to open the Chinese market to private companies. His intention was to give incentives for investment, but also to generate employment. The so-called special economic zones were created as part of these plans. In these areas, private companies of various types could be opened. In addition, the free movement of goods and services was allowed.
These areas were actually entire cities and were located mostly on the east coast of the country. Following its new consideration, companies of all kinds began to flourish, which also led to their growth in size and number of inhabitants. One of these areas, the first to be created, was Shenzen, which in 1978 was a town of 300,000 inhabitants that lived mostly from fishing, and that since then has grown vertiginously and is the headquarters of many multinationals. Among the many technological was Huawei.
That was where Ren Zhengfei, an engineer and former officer of the Chinese army, and in 1987 was 44 years old, created Huawei with just over $ 3,000. This company initially had 3 employees and was dedicated to telecommunications technology, like today. Specifically, to the distribution of products imported from Automatic Private Central (PBX). That is, a telephone exchange connected to the public telephone network. With it, you could manage incoming and outgoing calls independently to another exchange. Two years after its birth, Huawei was already manufacturing and selling its own products.
Despite its tiny size, Huawei soon grew in customers and sales, marketing telephony products in a country where until then it did not have many homes and companies with a telephone line. Especially in rural areas. Therefore, it was very well received and soon began to grow and open a market that until then was virtually non-existent.
Its creator was directly involved in its growth since it was responsible for convincing those responsible for municipalities and provincial governments to invest in the need to invest in telecommunications infrastructure. Years passed, and in 1993 he launched his own digital telephone switch. In 1994, Huawei already sold its own telephone terminal equipment. It was his first telecommunications equipment design. Hence, the jump to the market of the largest cities in China.
However, despite its popularity in China, outside its borders, Huawei was completely unknown. Ren Zhengfei was willing to make Huawei known worldwide. Therefore, in 1996 he began to take his first steps outside of China. First, close. He then becomes a supplier of the Hutchison-Whampoa company in Hong Kong. But its management understood that it needed help to adapt to the foreign market, and in 1998 it hired IBM to help it transform its management structure and its product manufacturing line and system for it.
In 1999 Huawei began its career abroad, and in 2001 accelerated his international expansion. In 2003, it ended his contract with IBM and began its dizzying growth phase, which has not stopped until today. In 2003 it reached an agreement with 3Com to manufacture routers and switches. A year later, thanks to its strategic agreement with Siemens, its sales outside of China surpass for the first time those that it made within the country.
In 2007 came another agreement, this time with Symantec. Under it, both collaborated in the development of security equipment and data storage for telecommunications operators. And in 2008 Huawei partnered with Optus in the development of a mobile innovation center in Australia, with the aim of accelerating the adoption of high-speed mobile broadband.
Little by little, Huawei opened a gap in the telecommunications market and appeared at the most prestigious technology sector fairs. In 2009, Huawei won the Green Mobile Award at the 2009 GSMA Mobile Awards, and its popularity soared greatly.
Huawei & the U.S. Government
Huawei’s problem began in 2012; the attacks against the Chinese tech giant have always been related to the same issue – accusations that Huawei is a spy company for the Chinese government, something that its management has repeatedly denied. The attacks worsened in 2018, and so far they have made their smartphones virtually disappear from the US market and the aforementioned veto, which is currently suspended until late summer. It has also been banned as a contractor for several US-allied governments, such as Australia.
Despite all the problems, Huawei, today, employs more than 100,000 people in China alone, both directly and indirectly. It has also set up several research centers scattered around the world. In China, it has them in Shenzen, Shanghai, Beijing, Nanjing, Xi’an, Chengdu and Wuan. In addition, Huawei also has centers of this type in countries such as Sweden, Ecuador, Ireland, Colombia, Mexico, India or Russia.
Currently, Huawei is a true telecommunications emporium. It occupies the second position in sale of smartphones worldwide. Huawei is the network equipment provider of multiple telecommunications operators worldwide and is a leader in patents for 5G related technology, among other topics. Its solutions are used in more than 170 countries, and it has about 180,000 employees worldwide.
His management, which adopted the management methods that Western companies apply to the company, have never hidden that its center, as established by its creator Ren Zhengfei, is the customer, which he considers one of the main keys to success of the company.