Heavy Reading Homes In on Huawei
And according to reports, Huawei believes it can grow by a further 37 percent in 2008.
Historically, the Chinese vendor has been known for its rock-bottom pricing, making the most of a low cost base to deliver products at prices that its Western counterparts can't match. And it's also earned a reputation for dubious business practices. (See Police Raid Huawei Offices in Brazil , Will Spying Charges Hurt Huawei?, and Huawei Admits Copying.)
But the company also has many admirers, who say it has tremendous technical capabilities and is very fast to meet demands. As a result, Huawei, which now employs nearly 69,000 people (as of December 2007), 48 percent of whom are in R&D, has an impressive list of customers and says it now supplies technology to 35 of the world's top 50 operators.
As well as the domestic Chinese carriers, those customers include BT Group plc (NYSE: BT; London: BTA), Deutsche Telekom AG (NYSE: DT), Orange (NYSE: FTE), Telecom Italia (TIM) , Telefónica SA (NYSE: TEF), and Vodafone Group plc (NYSE: VOD), including many engagements with those carriers' international business units. (See BT Goes With Huawei for FTTH , Huawei Lands Deutsche Deal, Huawei Wins HSPA Contract, Huawei Racks Up Euro Wins, Huawei Wins Vodafone Deal, and Vodafone, Huawei Team.)
So where do Huawei's strengths, and weaknesses, lie? Light Reading asked a selection of analysts at Heavy Reading to assess the vendor in their areas of expertise.
Next-generation fixed access and IMS
Heavy Reading chief analyst Graham Finnie, who recently completed a major fiber-to-the-home (FTTH) report and who has spent a lot of time focused on IP Multimedia Subsystem (IMS) developments, says Huawei knows how to appeal to carriers' requirements for a full set of standards-based technologies. (See Report: EMEA Set for FTTH Surge.)
"Huawei ticks all the right boxes on standardized products, such as GPON (Gigabit PON) and Call Session Control Function (CSCF) [in an IMS], and then goes for the best price/performance ratio," says Finnie. (See Huawei Unveils T/bit GPON Gear.)
Where the Chinese firm isn't so good, reckons the analyst, is in services and support.
"I would say they don’t yet have a proven reputation as a systems integrator and provider of in-depth professional services and support, including a proven ability to partner, in established countries, though that is changing." Finnie adds that Huawei also has a reputation for sometimes promising what it can't deliver, "though even if that's true it would hardly be the only culprit in that respect."
Finnie also notes that rivals and industry watchers possibly don't have a firm grip on Huawei's global strategy. "One thing that isn’t always understood is that Huawei isn’t showing much interest in the U.S. and is focusing the biggest part of its marketing outside the conventional 'West' -- that is, North America, Western Europe, Japan, and so on. Instead, it is winning business everywhere else: in Asia, the Middle East, Eastern Europe, Africa, South America, and, of course, China."
The message there, notes Finnie, is that "vendors no longer need to be big players in the U.S. and the big European Tier 1s to be among the dominant players overall. The biggest growth opportunity is elsewhere."
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