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Huawei CEO calls for push into software to weather US pressure

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An internal memo suggests Huawei will mount an all-out push in the software sector./AFP
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May 25, 2021 - 11:46 AM

SHANGHAI, CHINA — The head of Chinese telecoms giant Huawei has called for an all-out push into software, an internal memo seen Tuesday says, as part of an accelerating product diversification aimed at weathering US sanctions.

CEO and founder Ren Zhengfei told staff the move made sense “because in the software domain, the US will have very little control over our future development, and we have much autonomy.”

The 76-year-old Ren’s instructions represent the latest sign of a major strategic refocusing prompted by pressure from the United States, which views Huawei as a potential security threat.

In April, Huawei announced plans to work with Chinese automakers to make intelligent vehicles and has vowed to ramp up development of its own smartphone operating system after being cut off from Google’s Android platform by US curbs.

Huawei on Tuesday posted a separate short teaser on social media indicating that the operating system, called HarmonyOS, would be launched globally on June 2. It provided no other details.

The world’s leading supplier of telecom networking gear — and until recently a top-three smartphone supplier along with Apple and Samsung — Huawei had earlier announced a diversification into enterprise and cloud computing, and business lines related to the advent of 5G networks.

It sold off its Honor budget smartphone brand late last year, but vowed to retain its flagship handset products while hinting at a greater reliance on the friendlier confines of the domestic Chinese market.

Saying “the best defence is a good offence”, Ren outlined an ambitious plan to develop software that “adapts to and embraces the world”.

‘Ample resources’ 

“At a time when the US is pulling back its ‘net’ and pursuing a closed-off strategy, we need to become more open and go open-source on an even greater scale,” he said. “The company has ample resources to support you, so feel free to boldly invest materials and human resources during your work.”

The memo, provided to AFP by the company, was a compilation of discussions in April between Ren and Huawei technical staff.

Aside from passing mention of software leaders like Microsoft, Oracle and SAP, the memo offered few specifics on what types of software Huawei would venture into or who its competitors would be.

Donald Trump in 2018 launched an aggressive campaign to isolate Huawei when he was president, saying its networking equipment installed worldwide could be used by China’s Communist Party government for espionage or sabotage.

The company was barred from the huge US market and cut off from global component supply chains, while Washignton has pressured allies to ban or rip out Huawei gear from their telecom networks.

China and Huawei fiercely reject the US security allegations, saying no evidence has ever been provided to support them.

Huawei’s mobile phone sales, along with overall revenue growth, have sagged since last year.

The new US administration of Joe Biden has indicated it will maintain pressure on the firm.

The moves to deprive Huawei access to semiconductors have demonstrated strong US leverage in the hardware supply chain, and Ren said “objectively speaking, the only domain in which we can extend our roots deep is software”.

He indicated a focus on the Chinese market but with sights also on Europe, Asia and Africa.

“And if American standards do not converge with ours, although we will be unable to access the US market, US companies will not be able to access ours, either.”

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