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Home / Business / In the face of the US ban, Huawei appears as a stronger technology competitor

In the face of the US ban, Huawei appears as a stronger technology competitor



SHENZHEN, China (AP) – Long before President Donald Trump threatened to block Huawei's access to US technology, the Chinese telecommunications equipment provider invested money in research to reduce the need for American suppliers Companies to a harder competitor by forcing managers to focus their resources on their key products.

Huawei Technologies Ltd. is the second largest smartphone brand in the world and barely known to the Americans manufacturer of switching devices in the heart of telephone networks. The devices are used by 45 of the world's 50 largest telephone companies.

Huawei is a pioneer in the emerging field of next-generation 5G telecommunications. It promises not only faster internet, but also support for self-driving cars and other futuristic applications. This fuels the security concerns of the West and makes 5G politically sensitive. The US claims it supports Chinese espionage, although Huawei denies it and American officials have not provided any evidence.

Huawei needs some American innovation, especially Google services for Android phones, but industry experts say the company is becoming increasingly self-sufficient after spending 485 billion yuan ($ 65 billion) on research and development over the last decade ,

"They have the strategy to completely disassociate themselves from US technology, and in many areas they have become independent," said Bengt Nordstrom of North Stream Ren Zhengfei, who founded the company in 1

987, admitted in an interview, Phone sales will suffer if access to technology, including Google services for smartphones, is disrupted by the addition of Huawei to a US company Entity List of the Ministry of Commerce, which requires government permission to buy to get American technology. According to Ren and other executives, phone sales over the next two years may be $ 20-30 billion lower than projected, but the company will survive.

"When the entity list came out, they hoped that Huawei would die," Ren said. "Not only did Huawei not die, but he gets even better."

The company was added to the Entities list on May 16, but two 90-day extensions have already been granted after American vendors warned of processor chips and other technologies billions in losses. Intel Corp. and other vendors, which industry analysts say paid Huawei a total of $ 12 billion last year, have asked the Trump administration for permission to continue the sale.

The biggest potential American hit for Huawei would be the loss of Google services – these are standard features on Android-based phones. Huawei could use the open source Android, but would lose Google's music, maps and other applications, making it harder to compete with Samsung, the # 1 smartphone brand.

"Nobody will spend money to buy a premium Huawei phone without maps, YouTube and Google Play," said Samm Sacks, an expert on Chinese digital politics at the New America Think Tank.

Ren said he would continue to use Android and work with American suppliers. As a replacement, the company introduced its HarmonyOS operating system in August, saying that if needed, Android phones can be upgraded to the new system in just a few days.

Huawei spent 100 billion yuan ($ 15 billion) in 2018 with sales of $ 107 billion. on research and development over the past year more than Apple or Microsoft. The company employs 76,000 engineers and other researchers at its sprawling, green headquarters in southern China and the Silicon Valley, in Russia, in Bangalore, India, and in other industrial centers.

According to Charlie Dai, an analyst at Forrester, Huawei is building "rapid momentum in research and development."

In the AP interview, Ren made a sales pitch with Washington: To address security concerns, Huawei will license 5G technology to American developers ,

"I am open to the possibility of a paid transfer of 5G technology and production techniques to US companies," said Ren.

With Washington's pressure on phone providers to avoid Huawei, this is a long way off. But it would increase the company's presence in 5G and generate royalties and demand for its products.

Huawei is engaged in a global charm offensive, trying to convince European and other governments that it is not a security risk.

Washington has called on European governments to exclude Huawei from 5G networks, but Germany, France and Ireland said they have no plans to ban suppliers. The company temporarily withdrew from the US in 2003 after it admitted it copied Cisco software into routers.

However, according to industry experts, the company is catching up with Western developers. Huawei claims to have raised $ 1.4 billion in royalties since 2015 from other companies using its technology.

Huawei, together with Ericsson and Nokia, is a leader in the development of 5G network devices. The company claims to have invested $ 4 billion since 2009, producing its own equipment and not using any US technology. "It's almost all our own components," Ren said. "Huawei is also one of hundreds of companies that belong to it." "They are very well positioned to develop 5G – at least at the same level as their competitors," said Nordstrom.

5G Telecommunications Networks is meant to expand significantly to support self-driving cars, factory robots, nuclear power plants, medical devices and other applications.

This and the increasing use of networks to connect combat aircraft and other military hardware increase the potential security costs of downtime and the political sensitivity of 5G.

Huawei is the first to charge its Mate 20 X smartphone, launched in China in August, with 5G capability.

It uses Kirin 980 and Balong 5000 chips from the Huawei HiSilicon grant iary instead of Qualcomm or Intel chips. HiSilicon also manufactures Kirin chips for lower-end phones and Kunpeng chips for servers.

Huawei launched its Ascend line of artificial intelligence processor chips in October. The 310 for self-driving cars and the more powerful 910 are based on the architecture of British chip designer Arm Ltd. This made the challenge of finding suppliers without US connections possible.

Arm said in an email that she "actively" communicates with the US Department of Commerce about the relationship.


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