How Huawei grew to become an international conglomerate
The Chinese corporation Huawei is one of the local market leaders in the field of communications and the production of mobile devices. Its history began as a small company in 1987. Since then, it has grown into an international technology giant.
The founder of the company was Ren Zhengfei, who, at the end of his military career, decided to try his hand at what he once loved – engineering. The company’s initial capital was just USD 14,000, and its business was selling PBXs. But Zhengfei did not stop there. He ploughed all his earnings back into the business. Within three years, the company was producing its own products – telephone switches and software for them. Huawei’s breakthrough came in 1993 when it launched the country’s most comprehensive switching system. After that, the company received several large orders and the funds to expand production. The company began producing equipment for wireless communications.
Entering the international market
The company received its first order from a foreign buyer in 1997. It was a Hong Kong company. This led to a contract to build an infrastructure for transmitting data from Europe, the US and Australia. At that time, Huawei was working with companies such as:
– Vodafone and British Telecom;
– Bell, an operator with a presence in Canada;
– Telfort from Denmark.
In addition, the company launched a mobile network in the United States and opened offices in India, Sweden and other countries.
New development strategy
In 2003, Huawei’s management recognised all the advantages of the new mobile phone market and focused on this sector. The company began producing smartphones, tablets and other electronics. This decision paid off, and in 2010 Huawei became one of the top 500 brands by revenue and the top 5 innovators. After three years, the company launched a new brand, Honor, with products aimed at the young category of low-cost smartphone buyers.
As well as releasing mobile devices, the company continues to engage in communications services. Huawei is one of the pioneers in the field of 5G communication standards. It supplies equipment and software to ensure this type of data transmission. The company pays particular attention to research and development. About half of the company’s employees work in this area. They work on developing innovations, energy efficiency and optimising production resources.
Despite its success, the company has been the subject of accusations of business practices that have not always been entirely legal. The first is copying software from other manufacturers. Cisco, for example, sued Huawei for technology theft. There have been similar cases with other companies. The most high-profile scandal was in 2019 when the US government put Huawei on a list of companies that harm the country’s national security. Despite the ban on buying technology and components from US companies, Huawei managed to get around it by using front companies.