Huawei's Plan B?
According to a report in the Wall Street Journal, Huawei is set to invite potential investors, including private equity firms, to bid for a stake in its mobile devices (handsets, data cards) business. (See Huawei to Produce Handsets and Huawei Intros 3G Modem.)
The report suggests such a stake would costs more than $1 billion, and that Huawei would look to use its investor partner as a way to crack the U.S. market, which, so far, has been the rapidly growing firm's main single point of failure. (See Huawei Sets Bumper Sales Target.)
Huawei, which already has some handset business in the U.S., with MetroPCS Inc. (NYSE: PCS), is seeing growth in its mobile device business. It has a deal with Vodafone Group plc (NYSE: VOD) and, according to a Chinese media report, is targeting a 150 percent increase in its domestic sales in 2008. (See Huawei Launches Clamshell and Vodafone Brands a Handset.)
This isn't the first time Huawei, which couldn't be reached for comment on this matter, has been linked to potential deals with third party organizations, and it surely won't be the last. (See Huawei Dampens Deal Talk.)
This speculation raises a number of questions, but here're two that sprung to this Shiraz-addled mind: How many companies, and who, might be interested in a piece of the Huawei action?; and, how would having a handset investment partner really help it crack the U.S. market?
Answers by text, please. Or on the message board below, of course.
— Ray Le Maistre, International News Editor, Light Reading