Huawei Technologies reported a 29% revenue drop during the first half of 2021. With all the turbulence, this was not totally unexpected and has occurred for a variety of reasons. However, it all started with the pressure exerted by U.S. regulators on the company.Let’s take a closer look at Huawei, their growth plans and potential, and what to expect going forward.
Huawei and Qualcomm are the top two competitors in the rapidly growing and evolving 5G wireless networking space. They are also in the smartphone, tablet and handset space.
Competitors to Huawei on the networking and smartphone sides of the business are companies like Qualcomm, Ericsson, Nokia, Cisco, Samsung, ZTE, Apple, Juniper Networks, VMware, Dell Technologies and others.
Huawei, Qualcomm, Nokia, Ericsson are 5G wireless network players
With the distractions Huawei faces, I would not be surprised to see competitors looking to find ways to accelerate their own growth.
As a network builder, Huawei growth is coming from wireless networks upgrading to 5G on a global scale. This is a solid business, and it continues to show strong growth in many countries.
However, there is a group of countries including the United States who are pushing back. So, while Huawei is still seeing growth in this area, there are weak links in the chain.
Huawei is also in the handset and tablet sector. Until recently, they used the AndroidOS from Google on their smartphones and tablet’s. However, US regulators put a stop to that. So, Huawei recently developed their own called HarmonyOS.
Huawei HarmonyOS competes with Google Android
Harmony is brand new, so we do not yet know how well it will perform over time. This has increasingly put pressure on the company in the handset and tablet side.
Huawei is under pressure with pressure by the U.S. government.
This started years ago with fears around whether the Chinese government could use this technology to spy on other countries.
While there is no proof one way or the other, this has increasingly created pushback against the company in certain countries around the world.
Huawei fighting against unproven fear is a difficult battle
It started more than a decade ago when the wireless world was moving to 4G. That’s when the pushback began, and it has only grown. Now that we are moving to 5G, the battle is stronger than ever.
The problem was Huawei didn’t effectively fight back against the attacks in the early days. Since then, these attacks have only grown. That has led to a longer-term pushback against the company.
If they had been active early on in public relations, advertising and marketing, they may have been able to lessen the fear and resulting resistance.
Huawei finds fear is difficult to battle in the human being
Fear is an emotion that is very strong among humans and in fact, the entire animal kingdom. It has to do with survival, and it dates back to the time when man was created.
If the source of fear is known, like seeing a burning building, the urge for self-protection tells us to stay away and stay safe.
However, if the source of fear is unknown, it keeps us looking over our shoulder and second guessing every step we take and every step everyone takes.
The unknown is greatest fear we face
The unknown is one of the greatest fear we face. This is the battle that Huawei is fighting today.
Early on, Huawei needed to show the other side of the coin and help the U.S. regulators, customers and competitors understand they were partners along with us.
They had to explain their value to the industry and how they were not a threat and how they, like every competitor could be trusted.
Huawei needs to convince marketplace they are not a threat
The problem is this Huawei pushback has lasted a long time already without them standing up and fighting to clear their name. As time passed, things only got worse.
It would have been better for Huawei if they spent the last decade building bridges and making friends. They should have generated positive media attention. They should have pushed-back on negative discussion and finger pointing.
This delay has put them behind the eight-ball.
Now, they have begun to take the right steps. However, it will take time to repair their image and to grow.
Huawei must play the long game in global wireless
Wireless is a long-term game. So, going forward, I expect to see Huawei working to build better relationships going forward.
They have begun. But it will take time and effort. Remember, this is a long journey.
Of course, it would help them immensely if the US Government and the Chinese Government can get on better terms once again. If that happens, I think much of the Huawei resistance could quickly fade away.
So, I believe the problem Huawei faces can be corrected, but it will take a lot of time and effort on their part.
Problem Huawei faces can be corrected with time and effort
Until then, Huawei is still a powerful, global 5G wireless competitor. True, they are not as strong as they could be, but they are not going anywhere. And I see that continuing.
It will be interesting to watch their network and smartphone business and how their new HarmonyOS does in the marketplace as it competes with other companies in the wireless space in the next few years.
Remember, wireless is with us for the long-term. Over many decades we have grown from analog to digital, from 2G to 3G to 4G and now to 5G. And it will continue to 6G and beyond.
In fact, I would not be surprised if over time we see Huawei expand into software and other areas. Strong and smart companies always find a way to survive and grow.
As an example, remember when Qualcomm was in the wireless handset business competing with others? They shifted to the wireless technology business and now serve all wireless competitors, and they don’t compete with them.
Just like with the wireless industry, this is a long-term game Huawei itself is playing. It will be interesting to watch their next steps going forward as they move forward.
