Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from NPD Group’s Ross Rubin, Enderle Group’s Rob Enderle and more.
I don’t watch CNN much at home, opting for a more intellectual diet of reality TV and “Futurama” re-runs. When I’m traveling abroad, however, CNN International is somehow comforting. Watching the Pennsylvania primaries from China last month, then, something occurred to me: Barack Obama might just be the political personification of China’s best-known telecom vendor — Huawei.
Don’t get me wrong. I know that Barack Obama is an African-American politician, born in 1961 — the son of a Barack Obama Sr., a Kenyan who grew up “herding goats with his own father.” I know that Huawei Technologies is a China-based telecom manufacturer, founded in 1988 — the child of Ren Zhengfei, a former member of the Chinese military. Likewise, I’m not here to talk about politics. Though I’ve lived in DC, I don’t know enough about politics to even be dangerous. I don’t know if Obama will be around in a few years. I don’t even know if Huawei would benefit from a series of Huawei-girl videos on YouTube (though, with 80,000+ employees averaging 29 years old, I’m sure they could find the talent).
My point, simply enough, is that there are uncanny similarities between the two personalities — similarities that could become more (or less) important as Huawei attempts to move into new markets, like the U.S. Let’s start with the negatives (my wife, a former Clinton White House intern, is looking over my shoulder).
The negatives
Experience: Obama is undeniably young. More importantly, elected to the U.S. Senate in 2004, his experience in Washington is obviously limited. For its part, Huawei is 20 years old and, with its original R&D focused on optics and switching, its time in the wireless space — much less its exposure to tier-one operators — is very limited. Right or wrong, youth and experience are almost always linked to the perception of expertise and ability to deliver on promises while understanding what a market (product or political) needs.
Missteps: Perhaps linked to the issue of experience, our friends in Illinois and China habitually make mistakes in their messaging and operations. To be fair, this isn’t limited exclusively to newcomers. (Remember Hilary’s role in Bosnia? Remember Alcatel-Lucent’s CFO dropping the news of its NodeB rip out?) Regardless, as much as Obama’s remarks about bitter Pennsylvanians hurt his image with potential voters, Huawei’s past legal troubles with Cisco and potential trade show espionage tarnished its image only a few years ago.
Foreign: I hate to inform you, but Americans have an awkward relationship with “foreigners” or anything that might be deemed un-American. Political pundits stumping for the competition have exploited this by playing up Obama’s middle name (Hussein) and his reluctance to wear a flag on his lapel. The same people sometimes exploit a lack of information about Huawei by painting it as a tool of the Chinese government, supported by government financing and a favored position in the People’s Republic.
Difficult Claims: I’m glad I’m not a politician; I can’t stomach the need to make promises I know I can’t keep or (worse) overly vague promises like a focus on “change.” On the telecom vendor front, this materializes as vague (often competing) claims of market leadership based on sales vs. shipments vs. new customers vs. left-handed employees — and Huawei is particularly guilty.
The positives
To be fair, the negative sides of Obama and Huawei are probably less than 50% of the story; faring well with presidential primaries (Obama), service provider momentum (Huawei), and finances (both) — they must be doing something right. Right? Well, it’s not hard to come up with at least a few things.
Youth: Obama would be 47 at inauguration if he wins the presidency — a far cry from John McCain’s 72. Huawei, too, is a young company with a young employee base. Framed as an issue of experience, youth can be a massive hurdle to overcome. Framed in terms of energy and mindset, it supports a culture of change (and hope).
Change: Vague as it is, Obama has built a presidential campaign based on the notion of “change.” As a young guy, relatively new to Washington, he can do this. As a new vendor without too much legacy kit to support, Huawei can push its own brand of change: moving early with IP in the radio access network; moving from emerging market to mature market customers (versus the other way around); pushing operators to rip-out old 2G and 3G solutions in order to support OpEx savings and a smoother 4G migration.
Momentum: I’m not keeping track, but the Web tells me that Obama has won 1,494 delegates and 30 state primaries, compared with 1,333 delegates and 15 states for Mrs. Clinton. Huawei, for its part, continues to astound with deeper penetration into brand name mobile operators: Orange, T-Mobile, Telecom Italia, Vodafone, etc. Ultimately, whether we’re talking about super-delegates or super-national operators, these endorsements speak to an issue of credibility while raising your profile.
Finances: Whether you’re waging a battle against political rivals or incumbent wireless vendors, money helps — in the telecom world, it speaks to the resources necessary for protracted sales support and cutting-edge R&D. Where Obama’s grass-roots campaign financing is the envy of his candidate colleagues, Huawei’s claimed 47% CAGR in revenues from 2003 are enough to turn most any major telecom vendor green.
To be sure, Huawei can speak to a deeper set of strengths. Here, however, the company diverges a bit from the candidate. No politician could ever admit to tailoring their offering to public demands; Huawei has made a career of it, from white-label devices to the main-remote BTS solution helping it win an entry into Europe with Telfort. And, while some people are still relatively untested on a national or international stage, Huawei can point to live networks around the world and consistent product innovation as a proof of its expertise. This is, of course, why the company is so fond of touting its claimed market leadership and first-to-market innovations.
At times, the claims can seem too much to be believed. This brings us back to another comparison with Obama — the idea that there’s a secret hiding somewhere that we don’t yet know. another Rev. Wright waiting in the wings or a spin on the claims that somehow taints images and questions strengths. In a country, then, that hates secrets and loves openness, Huawei needs to play to its strengths (customization, innovation, capital, initial tier-two momentum) while doing whatever it can (e.g., seriously considering a public offering) to bridge American fears of the unknown.
Questions or comments about this column? Please e-mail Peter at pjarich@currentanalysis.com or RCR Wireless News at rcrwebhelp@crain.com.
