BitDepth#1401
MARK LYNDERSAY
AT A PRESS conference called by Huawei TT on March 31, the company presented itself as a business entity in a state of transition.
The hard numbers were, as the company put it, in line with expectations, and those expectations were low.
The Chinese technology manufacturer and service provider announced a drop in both cash flow and net profits, pointing to its heavy investment in research and development (R&D), which rose to 25.1 per cent of revenues (Apple spends 19.9 per cent) of US$100 billion, as well as somewhat euphemistically to what its senior executives referred to as "the restrictions."
Those restrictions are the hard wall imposed by the US government on access to technology, both hardware and software, designed in the US. That's imposed challenges accessing chipsets, including those used for 5G wireless radio transmission in mobile phones.
The aggregate of those limitations gutted the company's mobile phone business. Five years ago, Huawei was the fast rising third-place manufacturer of smartphones globally, competing robustly on the high end.
The company has dropped to sixth place, its sales largely buoyed by the Chinese market, where the loss of Google's software ecosystem and the limitations of the new Harmony OS aren't the deal breakers they are in Western markets.
In the fourth quarter of 2022, Huawei was the leading smartphone brand in China with 27.3 per cent of the market, beating Apple's share by one percentage point.
Evan Zhou, CEO of Huawei TT, was cautiously optimistic when he told members of the press, "The year 2023 is a critical one for Huawei's survival and development.
"The severe external environment and non-market factors continue to affect the company. We're in a storm, and we are running in the rain."
According to Cesar Funes, vice-president of public affairs for Huawei LatAm, cloud services are an increasingly important element in the company's digital transformation strategy and the company is emphasising virtual services, investing more than US$100 million in improving its cloud products and assembling 16,000 certified developers to implement its cloud services.
That might sound like a lot, but the most aggressive player in cloud services, Amazon Web Services, works with 35,000 developers and software engineers while the fiercest competitor for cloud business, Microsoft, claims 100,000 software engineers for its Azure cloud services.
Huawei's ICT infrastructure business is valued at US$51 billion, its consumer business at US$31 billion and its digital power business at US$7.36 billion.
The fledgling Infrastructure as a Service (IaaS) business is valued at just US$0.3 billion, but it's one that is targeted for expansion, along with the growing digital power business.
Most of the work that Huawei has done over the last 20 years in the Caribbean has been the construction of modern telecommunications infrastructure.
The new digital power technologies will build on that expertise, but it's framing these ne
