Huawei, the Chinese multinational conglomerate which specializes in tele-communications, consumer and artificial intelligence, is headquartered in Shenzhen, China. The conglomerate began its operations in China during the 1980s when the Government decided to modernize the country’s underdeveloped telecommunications systems. Since then, the company has deployed its telecommunication services and products in more than 170 countries.
The telecommunications giant secured its roots in China, ensuring that the company generated profit in its home country while the rest were generating losses when the smartphone sales around the globe that fallen. The company was able to achieve this because its products cater to different segments of the market.
Honor, the company’s, sub-brand has also contributed to the company profits. While Huawei catered to some of the premium segment, Honor catered to the low-end consumer ensuring its products were able to attract the consumers in the small Chinese villages.
‘Huawei has gone from strength to strength with a large product portfolio catering to different segments of the market and a wide distribution network. Huawei’s product portfolio covers not only the budget segment but the premium segment as well.’
– Kiranjeet Kaur, Senior IDC Research Manager
Huawei in Europe, is among the top three market leaders (currently holding 16.73% of the total market share), thus competing with the major players such as Samsung and Apple. Unfortunately, the company faces turmoil in countries such as the US, Canada, the UK, Australia, New Zealand and Japan as it has been perceived as a serious threat to national security. To verify these claims, United Kingdom’s government decided to set up a digital lab to evaluate the software and hardware products supplied to and operating within their borders. It was concluded that there were a few ‘shortcomings’ in Huawei’s engineering processes which could be potentially threatening in the long term.
In August 2018, the US Congress passed a bill signed by President Donald Trump that specifically prohibits the government agencies of US from purchasing or using any telecommunication products from Chinese companies such as ZTE and Huawei. A week later, Australia announced a similar ban barring firms ‘who are likely to be subject to extrajudicial directions from a foreign government‘.
While Canada and Germany’s Deutsche Telekom are still discussing on imposing a similar ban, New Zealand’s intelligence agency and French telecommunications company ‘Orange‘ barred Huawei from participating in its 5G development. Another reason for the pressure on Huawei is the tendency of the Chinese Government to gather personal information and confidential data thereby breaching the privacy and security of its own citizens.
Further, the involvement of Huawei in the development of 5G is worrying as it is currently considered as a leading player in the 5G tech space. While it is among the elite group of leading companies within this space, it is subject to bans from several markets as it battles to defend its reputation and image in the global market.