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Huawei resilient under existential threat

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2019-05-28 09:21:03Global Times Editor : Li Yan ECNS App Download

Company far from ‘death’ despite U.S. campaign: analysts

For many, an intensifying global crackdown campaign by the U.S. government could be terrifying and existential. But for Ren Zhengfei, CEO and founder of Chinese telecom giant Huawei, this could be a best time for the company rather than the most dangerous risk.

As pressure continues to build for the world's second-largest smartphone vendor and leader in the rollout of 5G networks, Huawei continues to show incredible resilience, vocally pushing back against U.S. accusations while quietly preparing for a potentially long struggle. 

Though Huawei is expected to take a heavy hit, the Chinese company, with its leading technologies and a massive fan base, will be able to weather the storm and could emerge even stronger, industry analysts said.

In a widely viewed interview broadcast by China Media Group on Sunday night, Ren struck a defiant and confident tone over the future of his company. "We have never thought we would die. We have even made 20,000 gold medals with an inscription saying 'Immortal Huawei'. We don't think we will die at all," the 74-year-old Ren said.

Ren's interview came as a ban from U.S. government continued to deal new blows to Huawei. In the latest setback, three U.S.-based industry standards-setting bodies - Wi-Fi Alliance, SD Association and JEDEC - decided to restrict the Chinese company from participating in meetings and other activities. 

Though the temporary moves are unlikely to affect Huawei's business, they could diminish the company's say in setting future standards if the restrictions remain in place, analysts said. 

Further, such actions add to the narrative that Huawei is being abandoned by global partners, "but this is far from the truth," said Jiang Junmu, chief reporter at telecom industry news website c114.com.cn, who has been covering Huawei extensively. "Huawei is still far from being in a life and death situation."

Still surviving

Jiang noted that Huawei has an inventory of components that could last about two years and it has alternatives ready for both smartphone chips and operating systems (OS), two core components the company has been relying on U.S. suppliers for that could be cut off. 

After the U.S. announced the ban, HiSilicon, Huawei's semiconductor arm, said it was ready to supply chips to avoid disruption in Huawei's business. Huawei executives have also said that the company's own OS, reportedly named "HongMeng OS," could be launched as soon as this fall.

"Obviously, all of this will take time and Huawei faces some incredibly tough times ahead, but to say the company will die is exaggerated," said Fu Liang, a Beijing-based independent telecom industry analyst.

The U.S. ban and a subsequent decision by Google to cut off services to Huawei have many customers overseas worried about their devices, with some considering switching phones. However, there is also growing support from fans not just in China but around the world, many of whom expressed their anger toward U.S. government and vowed to stick with the company.

"Maybe the performance and costs [of the new chips and OS] will not be ideal initially, but it will not be the end of it. Once the run-in is complete, Huawei could even have better development," Jiang said.

In the interview, Ren also argued that rather than a dangerous time, his company actually faces an opportunity. "Before our company was not suppressed by the U.S. and before the Meng Wanzhou incident, that was a dangerous time for our company," he said, noting that many had become rich and unwilling to work hard. Meng, who is Huawei CFO and Ren's daughter, is under house arrest in Canada and facing extradition to the U.S..

"Now, our company is full of excitement and our fighting ability is constantly improving. So how could this be the most dangerous time? It should be the best situation," Ren said.

In addition to recent vocal responses, the company has also stepped up efforts to recruit talent in an apparent bid to accelerate the development of its own mobile chips and OS.

On Saturday, Huawei's Central Software Institute posted job ads on its official WeChat account for 10 positions covering areas such as artificial intelligence and smartphone OS. 

HiSilicon, also launched a global talent hunt last week to beef up research and development in chips.

"Huawei has always been seeking global talent. That is what made Huawei so competitive over the years," Fu said.

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