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Telecom Chinese Style

by in Telecom

This April I am going to visit Huawei in China. It’s been tempting to attend their annual analyst conference for the past several years, and this year I’m making it a priority. Huawei is a communications giant. In addition to its comprehensive enterprise UC and video solutions, Huawei is one of the largest makers of IT networking gear and cellular equipment including smartphones.

I think many American’s have very negative views of China. I’ve come to realize this from posts and conversations with my co-blogger Colin who frequently writes about (and visits) China.

First, from a UC perspective there’s Huawei and Alcatel Lucent Enteprise (ALE). Huawei is most like Cisco in terms of its portfolio.

Ask someone to name smartphone makers and the list will certainly include Apple (US) and Samsung (Korea), but there’s quite a few biggies from China too including Huawei, Xiaomi, Motorola, and OnePlus. I’m sure there’s more, but these companies are on my radar. Huawei makes the newest and biggest Nexus smartphone for Google. Xiaomi, not available in the US, recently made a splash at MWC with its newest smartphone that uses technology from Vidyo and Agora.io (click names for press releases – both companies will be at Enterprise Connect this year). I bought the Moto X last Fall – I like the wood back and it has a great camera. OnePlus has caught my attention for a while – I got my son the OnePlus One 18 months ago and it’s an impressive device. I was not as impressed with the OnePlus Two -however its VR launch was extremely innovative.

We used to dismiss Chinese products as just junk or knockoffs, and there is plenty of that. However, there’s more to the story. First, it’s important to note that there’s plenty of junk and knockoffs produced right here in America too. More importantly, some of the most coveted items in the US are manufactured in China – namely the iPhone. Apple insists the iPhone cannot be made in the US – so much for just junk.

The differences between East and West are rapidly shrinking for several reasons, but also because China is buying so many western companies. Volvo is a Chinese company – not a Swedish company (previously it was owned by Ford, so hasn’t been Swedish for a while). The recently launched Volvo S60 is the only car available in the US that is manufactured in China.

Zoom also has some Chinese influence. It’s actually a Silicon Valley company, but Eric Yuan, CEO of Zoom.us, is native Chinese. I consider him an industry visionary. He helped create WebEx into something Cisco wanted to acquire. He then grew restless at Cisco so left to create Zoom.

It’s surprising how many western companies are becoming Chinese companies. Legendary Entertainment (production company that did Jurassic World) recently became Chinese. One of the largest suppliers of pork in the US, Virginia based Smithfield Foods, was recently acquired by Chinese owners. Hilton recently sold the Waldorf Astoria in New York to Chinese owners. Look around your home or office, and it won’t take too long to find a Chinese-made product. This trend isn’t likely to change either. Take a look at what the Telegraph recently reported in The Chinese Economy is Still Full of Power

Against the background of the sluggish world economy, China remains one of the fastest-growing major economies – and it contributes over one quarter of global growth. Consumption now accounts for two thirds of China’s growth and the service sector now makes up more than half of GDP….Since the financial crisis, China has made an outstanding contribution to global growth. It is widely recognised as the world’s economic powerhouse and has fulfilled its responsibility as a key global player. Make no mistake: that engine is still full of power and will continue to bring opportunities and benefits to the world.

I got a recent update from ALE and its Chinese ownership seems to be one of the best things to happen to it. I was concerned how the West would respond to the French company becoming a Chinese company, and the answer is “sell us more.” Customers were growing weary about their investment, and now feel more secure about the company’s future. ALE was trapped as a unit in a cash starved parent. Although still sluggish in NA – Europe and Asia are responding well. Asia includes Australia where ALE was doing well, and it’s greatly expanded in China too.

Huaweil left the US, but didn’t leave America. It’s one of the major suppliers creating Canada’s cellular infrastructure, and I expect it to slowly increase its sales in the US again starting with smartphones. Huawei phones are currently available from most of the major carriers and those that don’t offer Huawei Wi-Fi equipment.

Huawei left the US under a cloud of spying accusations. A lot has changed since then – including Edward Snowden’s revelations that there is a lot more spying going on than most realized. This is a complex issue because nearly ever device we use has the potential to spy on us. Americans are going crazy for connected devices including microphones, cameras, and even thermostats. Your cable-box now reports exactly what was watched and Google retains/analyzes everything you search. In other words, spying is more or less everywhere and increasingly accepted as a business model. Many corporations and all countries spy – I’m not endorsing this, but it’s a fact. Huawei’s move with Google on the Nexus 6P was very smart as a way to re-earn trust. It’s unlikely Huawei has much interest on spying on consumers (not as much as Google), and Google owns the software on the Nexus phone.

The UC industry is ripe for Huawei’s return to the US. It is much more price sensitive than before, and the move to cloud services tends to erase many of the concerns, loyalty, and biases associated with software. Does anyone know what type of storage or servers are used by various cloud providers?

I’m really looking forward to becoming more acquainted with Huawei.

 

 

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About this Post

Dave Michels By


Dave is an independent analyst focused on enterprise communications. he provides public content on TalkingPointz and other industry websites, and also works with clients directly.

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