Huawei Brings the Heat

Huawei's annual analyst summit provided a sneak peek into the vendor's ambitions for the future

April 30, 2008

2 Min Read
Huawei Brings the Heat

Huawei Technologies Co. Ltd. 's annual analyst summit, held last week at its corporate headquarters in Shenzhen, China, delivered few surprises overall, but it did provide a sneak preview of changes to the vendor's overall marketing strategy, as well as some new insight into Huawei's professional services ambitions.

One of the key drivers behind Huawei's new marketing agenda is the need to respond to carrier opex challenges through delivery of all-IP and "green" high-power core and access solutions. While this imperative is by no means unique to Huawei, the company is trying to carve out some unique differentiators.

One specific Huawei initiative is the promise to deliver products that extend the maximum normal operational temperature tolerance to 35 degrees Celsius, and hence reduce air-conditioning costs. According to Huawei, the additional heat tolerance, when coupled with high-powered amplifiers in a GSM base station, can result in an 80 percent power savings in a typical 12-radio transceiver (TRX) configuration.

Huawei also told analysts that professional services is an emerging priority for the company. It says it now has 14,500 services staffers, out of a total employee base of 80,000. Whether Huawei plans to use professional services to jump-start one of its other priorities – e.g., entrance into the North American market – remains unclear, but some linkages seem likely, given repeated references to the use of its services staff to make wireless network swaps transparent. As a proof point, Huawei claims to have already replaced more than 200,000 TRXs from other vendors in more than 50 countries.

Overall, it was hard to leave the summit without the impression that Huawei has a definite plan in place to make a run at more Tier 1 carrier business. Last year, the world's top 15 operators accounted for 13.3 percent of Huawei's revenues, up from 8.5 percent in 2006. With the promise to "jump higher" in 2008, it appears a given that Huawei will also continue to grow in 2008 at a rate well beyond that of its competitors.

Ultimately, it appears the success of Huawei's long-term plan for profitability and meaningful market-share growth will hinge on its ability to win higher-margin business associated with sales of new technologies such as Long Term Evolution (LTE) to Tier 1 carriers, including those in North America. In many respects, this is no different from the challenges that Western vendors will also confront, and the message from the summit was that looking into the horizon, Huawei likes its chances. One thing, at least, is clear: The 2012 Huawei analyst summit is shaping up as one not to be missed.

— Jim Hodges, Senior Analyst, Heavy Reading

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