Huawei, after a year being buffeted by US sanctions and the Coronavirus crisis, has been likened to a “bullet-ridden plane.” But despite such turbulence, the company’s chairman says the Chinese tech giant is navigating a course for survival.
That was the key message to emerge from the opening session of Huawei’s Global Analyst Summit (HAS), on Monday, the 17th such summit, but the first to be held mostly online due to the Coronavirus pandemic.
This year's conference, which focused on building a "fully connected, intelligent world" over the next 20-30 years, featured a special opening session called “A year and beyond” that included a keynote speech by Huawei Rotating Chairman Guo Ping. The event comes amid an escalation in the company’s ongoing bitter rift with the US.
Last year, the Trump administration paced the company on its so-called ‘Entity List’, barring US firms from using Huawei technology or providing technology to Huawei without government approval, deeming it a national security risk. Earlier this month, Washington imposed new restrictions on the firm, severely limiting its ability to use American technology.
A strongly worded Huawei statement issued on the first day of the two day summit said the company, the world’s top telecoms equipment maker, “categorically opposes” the new rules introduced on 16 May saying they are “without justification.”
It goes on, “In its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations. This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries."
Ping warned the US move would affect its business but it would do everything in its power “to find a solution”. In his address, he said the original sanctions, introduced a year ago, had left his company like a “bullet-ridden plane” and its focus had been on “filling the holes” and “survival.”
“Patching up holes has been our priority and we’ve had to toughen our skin. “But I am confident the plane will continue to fly because, when the going gets tough the tough get going.”
“In the meantime,” he declared, “Huawei remains committed to our customers, open innovation, and inclusive development.” He also revealed the estimated cost of US blacklisting for his company at $12bn. This is the gap between Huawei's expected revenue and its actual revenue as a result of being put on the entity list.
“Patching up holes has been our priority and we’ve had to toughen our skin. “But I am confident the plane will continue to fly because, when the going gets tough the tough get going” Huawei Rotating Chairman Guo Ping
The mostly online event, broadcast from the Huawei HQ in Shenzhen ,China, was told by Ping that 2020 was “proving to be a very challenging year” for business but through “innovation, closer collaboration and ecosystem building we can share a brilliant future all over the world.”
He voiced confidence the global economy can recover from the Coronavirus pandemic “by making the most” of technology such as 5G, Cloud and Artificial Intelligence. Huawei's business was “continuing as usual” and its overall business results in the first quarter of this year - when Huawei generated 182.2bn Chinese Yuan in revenue, an increase of 1.4 percent year-on-year – are in line with expectations, he said. Investment had also been increased by 30 per cent.
Ping said, “In the past year, against all the odds, we have forged ahead. The firm had “mitigated” the impact of the US Entity Listing by a “significant” increase in investment. “Luckily,” he said, “we have survived but fixing the holes has been our focus and we have had to develop a thick skin.”
The company’s business had “inevitably” been impacted by the restrictions, imposed in May 2019, and Ping said he could not understand “why the US government persists in attacking Huawei and what this will achieve.”
The “trail blazing” firm had taken digital technology “out of the Ivory Tower” and was serving around three billion customers worldwide and "helping industry to prosper." He added that Huawei had also been granted 85,000 patents “but we will not weaponise or charge excess royalties on these.”
He warned, “Given the changes in the past year it is clear that fragmented standards and supply chains benefits no one. Industry will pay a terrible price for fragmentation.” He said the firm’s experience in the past year showed the importance of having diverse supply chains.
“Huawei and its supply chains will never be closed off but remain open because we are committed to globalisation and diversification" Huawei Rotating Chairman Guo Ping
“There are 1000 companies on the US Entity List and trust and global collaboration is under attack. Innovation is being hindered and this will only escalate conflict and, ultimately, it will hurt US interests.” His message was, “Huawei and its supply chains will never be closed off but remain open because we are committed to globalisation and diversification.”
Ping predicted that new technologies such as AI and 5G will, in time, be “integrated into all walks of life” and the company will “continue to invest and innovate” in smart devices.
In a Q & A session, he admitted the last 12 months had “difficult and challenging” saying the company had “spent a lot of time communicating with our customers, partners and employees in order to clarify things and win their understanding.
“Luckily, we have won the trust and recognition from our customers, partners and employees and we are confident about our survival.”
If there was to be a “US-led world” and a “US-approved world” in the future he was asked where this left Huawei. He replied saying his firm would “continue to participate and support collaboration and the development of fair, non-discriminatory and unified standards for the whole world. Unified standards have fuelled incredible development but fragmentation will bring supply risks to customers.”
The entity listing had impacted Huawei’s growth in 2019 and it had become more difficult to win contracts. “But,” he went on, “we really appreciate the fact that a large number of customers still trust and support us.”
“We are still evaluating the full impact and the cost to our business so the priority for us is survival. This is the key word for us at present.”
"We will continue to focus on problem solving for our European customers and to help Europe build ICT eco systems" Huawei Rotating Chairman Guo Ping
Ping said the US “had no reason” to “continually attack” his firm, adding, “I realise from recent speeches by senior US officials that the US wants to assume supremacy in technological leadership. It is clear that any other country or company with more advanced technology may put this US supremacy at risk.
Ping also said Huawei had operated in the European market for many years, contributing to infrastructure and promoting development of the digital economy in Europe, adding, “we will continue to focus on problem solving for our European customers and to help Europe build ICT eco systems.”
Ping also cited the role of ICT in tackling the ongoing health crisis, telling the audience his own firm had contributed to controlling the Coronavirus pandemic in China and helping other nations deal with the crisis.
“ICT can play a very proactive and very important role. In China, especially in Wuhan, the population density is very high and it is not easy to ask people to stay at home for over 80 days but we worked with the Chinese government and industrial partners to help our customers. Where we have networks in Europe and Africa we’ve also been working with all relevant stakeholders
“ICT infrastructure can play a significant role in enabling people to have remote access to health care, education and work.” Looking ahead, Ping said the ICT industry has “tons of potential”, saying “all industries are going digital” and the “intelligent world is coming fast.”