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Huawei Boss Tells Handset Team to Sober Up

Robert Clark
News Analysis
Robert Clark
4/23/2014
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Huawei's ambitious devices team finished 2013 on a high, boosting sales nearly 18% and bustling into third place in the global smartphone rankings. (See Asia Strengthens Its Grip on Smartphone Market.)

But Huawei Technologies Co. Ltd. founder and CEO Ren Zhengfei let the air out of their tires when he paid a rare visit to the device division's offices last month to accuse them of complacency.

In a recent speech widely reported in the Chinese media, the reclusive chief warned the group not to turn into a "bubble" after scoring some business success.

He pointed out that Apple Inc. (Nasdaq: AAPL) returned a full-year profit of $50 billion and Samsung Corp. $40 billion. "If you can give me $30 billion then I will recognize you as no. 3," he said bluntly. "Now you are earning several hundred million dollars and starting to get hot… that's complacency."

He appealed to the group to "not let the Internet give them a fever" from the publicity around their success. "Don't just blindly follow Apple or Samsung or Xiaomi [Chinese device vendor]. Don't take the easy road."

Acting CEO Eric Xu confirmed the reports at the company's annual global analysts' briefing in Shenzhen Wednesday.

"We have concerns that the consumer business group may not be as down to earth as they used to be, simply because of the success they achieved last year. Therefore we cooled them down in advance so that they can become sober, and so they can fully understand where they are."

Shao Yang, director of marketing for the consumer group, said Ren was saying "don't just get big, get strong."

Notwithstanding the rebuke, Huawei's consumer business unit has made some impressive progress in the three years since its creation. It now accounts for nearly a quarter of Huawei's total revenue, and already this year it has shipped 4 million units of its flagship Ascend P6 device. Awareness of the Huawei brand rose last year from 32% to 68% in China and 9% to 22% in the US. (See Huawei Pumps Up Its Profits to $3.5B and Huawei's Handsets Man Has Been Here Before.)

Xu said the company did not believe there were problems with its devices and that there would be no major changes to that group's strategy going forward.

— Robert Clark, contributing editor, special to Light Reading

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mendyk
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mendyk,
User Rank: Light Sabre
4/24/2014 | 10:10:13 AM
Re: if not humbled, humiliated soon
There are lots of ways to make sure your organization doesn't sit on its laurels. Humiliation and threats are two of them, but they are not two of the better ones. Also, being humble in a hypercompetitive environment is a good way to have your metaphorical lunch eaten by competitors.
nasimson
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nasimson,
User Rank: Light Sabre
4/24/2014 | 9:46:53 AM
if not humbled, humiliated soon
In today's hyper competitive environment if you are not humble, you'll soon be humiliated. I am glad that HUAWEI's CEO is not letting the division sit on its laurels.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/24/2014 | 8:44:00 AM
Re: Good job
Given his general lack of visibility, odds are very good that this was an intentional dressing down.
MarkC73
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50%
MarkC73,
User Rank: Light Sabre
4/23/2014 | 11:23:33 PM
Re: Good job
Interesting that he did it in a way that it would be leaked publicly as well, or was that the point?
Ariella
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50%
Ariella,
User Rank: Light Sabre
4/23/2014 | 8:30:51 PM
Re: Good job
@mendyk You said it! Bosses pride themselves on such kicks, it seems.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/23/2014 | 5:30:37 PM
Good job
It's always nice when success is rewarded with a kick in the whatevers.
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