1 Data Appendix B: Articles used for the coding process
In this document, I have bundled the articles used as input for the coding process in Atlas.Ti. I have bundled interviews with Huawei CEOs and rotating chairmen, articles from U.S. based technology websites and articles from Chinese based technology websites.
I started the data collection process by looking up trustworthy and popular U.S. based technology websites using Detailed.com and Get.Tech. Following the most popular website mentioned on Detailed.com – TheVerge – I started browsing to this website and I subsequently entered the key search terms as mentioned in the Thesis document. I scanned articles that either discussed Huawei’s platform expulsion from the Android platform or Huawei’s competitive response following the ban.
When articles referred to other websites, I used mediabiasfactcheck.com as a tool to judge the objectivity of reporting of the respective websites. For example, this article of TheVerge contains the original source from Reuters, so I used mediabiasfactcheck.com to ensure that the original Reuters source was of high quality. Using this website, I found that Reuters scored very high on “Factual Reporting” and is considered one of the “least biased” websites.
However, not all websites listed below could be found on mediabiasfactcheck.com, so I aimed to triangulate the data of sources by using multiple data sources that covered the same topic but described it from a different perspective. For example, most Chinese sources could not be traced by
mediabiasfactcheck.com and in general, it is very hard to find if Chinese sources are trustworthy and of high quality. Therefore, I aimed to counter the Chinese articles that did not show up on
mediabiasfactcheck.com with U.S. based articles that covered the same topic but that were listed on Detailed.com or Get.Tech or that were deemed as trustworthy by mediabiasfactcheck.com.
Moreover, some Chinese sources such as the South China Morning Post scored rather low on the
“Factual Reporting” criterium, with a tendency have a pro-China reporting style. Being aware of the possibility of a pro-China article, I aimed to lessen the bias that such an article would have on my data set by balancing the set of articles that covered the Huawei case from a Chinese perspective with an evenly large set of articles that covered the case from a Western perspective. Through aiming to find linkages between both sets of articles, I tried to counter the bias that some articles would inherently have.
After having sourced the articles listed below, I started the data analysis process by scanning the documents through the lens of my research question “How does a sudden platform closure by a powerful platform owner affect a firm and its value net?”. This way, I focused my attention on paragraphs or sentences that discussed either Huawei’s ban from the Android platform, the implications of such a ban for Huawei and its partners, and Huawei’s responses to this ban. I highlighted the important passages.
After having read the articles and having highlighted the important passages, I imported the documents to Atlas.Ti and started the actual coding process. Please refer to Appendix XXX for an overview of the data structure, which contains the first-order items, the second order constructs and the aggregate level constructs of the coding process. The data structure as provided in Appendix XXX served as the input for the results chapter of the thesis.
2
CEO INTERVIEWS
Cutress, I. (2019, September 23). Huawei CEO Richard Yu Q&A: “Politicians are Playing Games.
Retrieved, April 27th, 2020, from: https://www.anandtech.com/show/14896/huawei-ceo-richard-yu- qa-politicians-are-playing-games
Huawei CEO Richard Yu Q&A: Politicians are playing games
As the world’s second largest smartphone manufacturer, the growth of Huawei over the last decade has been immense. Last year the company overtook Apple with smartphone unit sales, despite not being in the US market, by offering some of the best hardware and user experiences in a very competitive market. However, being placed on the US Entity List earlier this year has put a dent in that momentum, especially when it comes to talking about flagship smartphones. Huawei launched its new Mate 30 and Mate 30 Pro smartphones this week, without Google Play Store apps, with CEO Richard Yu committing over $1B to enhance the Huawei app ecosystem. After the launch event, Richard sat down with a group of press and took some questions.
Fighting With One Arm Tied Behind Its Back
In recent years, it’s hard to underestimate the effect that Huawei has had on the smartphone industry.
The company has two major annual releases: the Mate series brings the latest in chip technology to market, while the P series offset by six months takes the Mate design and puts best-in-class
photography inside. Each iteration comes with enhancements to the core elements of the Huawei ethos: design, performance, and user experience. Huawei is everywhere, except the US.
The New Huawei Mate 30 Pro
Being based in China, many individuals and users are sceptical about Huawei. The company says that it is 99% owned by its workforce – supposedly around 40% of its 190,000 employees have the equivalent of non-voting shares as part of a trade union, which translates into employee support and end-of-year bonuses, although these trade shares have zero voting power in a traditional sense - management takes the big decisions. Because the shares are technically owned by the union, they are non-transferable, and individuals cannot trade them - when employees leave the company, Huawei/the union buys back those shares for redistribution. Some people cite that Ren Zhengei, one of its
founders, was a senior member of China’s ruling Communist Party, and that being in China means having to comply with its data laws and share information with the government. Huawei insists it is not controlled or even directed by the state, just that it complies with all local laws, no matter what the country.
Despite playing almost everywhere in the world in smartphones and telecommunications, this scepticism has kept Huawei smartphones out of the US market. The US government, even under the previous administration, saw Huawei as a threat, and its attempt to enter the market in a big way in Q1 2017 was scuppered. Despite not playing in the consumer market in the US, Huawei has a lot of business with American companies. Huawei uses the Google Android operating system in its
smartphones, and has been a leading partner in Android ecosystem development for a decade. Huawei uses Microsoft Windows for its PC business. Huawei also has had extensive research facilities in the US under the Futurewei name, and deals with a good number of smaller companies. In Huawei’s own words, ‘we bring a lot of profit to US companies’.
All this came to a head earlier this year, when the current administration due to its tariff war with China, placed 80 companies including Huawei on an Entity List, barring any US company (or any company with product development in the US) to work with Huawei without a licence. Almost immediately Google and Microsoft had to cut off all contact with Huawei, and companies with extensive facilities in the US, such as Arm, had to re-examine its product portfolio to see what could and couldn’t be shared with Huawei. More than 100 companies have submitted requests for licences to
3 work with Huawei, however none of those submissions have been approved at this time, despite six months after the initial ban.
This has put Huawei, and some US companies, in a bit of a pickle. Despite being as vertically
integrated as possible, Huawei relies on several high-profile US companies and US operations in order to produce its products. By being unable to even communicate with Google on official terms places Huawei on the sidelines – open source only, with no way to licence Google services. With no way to work with companies like Microsoft on bug fixes or OS optimization, Huawei’s products could potentially stagnate, and US companies lose out on not only revenue but a strong technically minded powerhouse that has the ability to help improve both sides of the equation. To that end, Huawei has put its resources into overdrive: where it has been reliant on US companies in the past, Huawei is moving to become self-reliant, ultimately removing its connections from the US technology industry, probably to the detriment of the US.
As a result, Huawei has been proactive in announcing initiatives such as HarmonyOS (Hongmeng OS), a unified microkernel platform to cover everything from microcontrollers to televisions. Huawei is putting $1B into its own version of the Play Store, known as the App Gallery, to encourage
developers to port their apps under Huawei’s APIs and SDKs. The sweetener there is that where Apple and Google take a 30% cut of all sales, Huawei will only take a 15% cut. Huawei is also expanding its AI efforts to more products, as well as the cloud.
Unfortunately, HarmonyOS is ultimately not ready for prime-time in smartphones. Huawei’s
representatives have been cagey about whether it is suitable for such devices, but in reality, it just isn’t ready for that sort of scale. As a result, for its smartphones, Huawei is turning to the open-source version of Google Android, known as AOSP (Android Open Source Project). At this level, Huawei does not need to interact with Google, but it does not get access to certain Google Services, like the Play Store, because it can’t license them due to the US issue.
Roll forward to September 19th, and Huawei announces its first major product that is feeling the impact of this ban: the Mate 30 and Mate 30 Pro smartphones. The worldwide launch for the devices occurred in Germany, where the company has launched the Mate series for the last few years. Huawei CEO of the Consumer Business Group, Richard Yu, spoke for 88 minutes about the new hardware and the innovative user experience that the devices offer, and then two minutes about not having Google apps as well as the Huawei app ecosystem.
The key element here is the use of GMS, or Google Mobile Services. The GMS library forms a key part of certain Android apps, such as Maps, Docs, Gmail, Search, YouTube, Play Store, Drive, and Photos. Huawei no-longer has access to GMS, and so instead suggests to users that most of these features can be accessed through the web. By contrast, Huawei has its own mobile services, or HMS, and it is this library that the company is encouraging software developers to use, by dangling a high user install base, a higher percentage return, and Huawei’s investment.
It was on these topics and more to which Huawei’s CEO, Richard Yu, was grilled on by the press for around 45 minutes after the Mate 30 and Mate 30 Pro presentations. We were one of about two dozen press sat in a side room after the main event. This was, we were told, Richard Yu’s only press session as part of the launch.
As always with our interview transcriptions, the transcription has been tidied for readability and some questions may be rearranged to assist with topic consistency. Where possible, we have noted the journalist and publication that asked the question.
Q: Can you explain clearly which operating system will work on?
A: This is Android 10. We use the Android Open Source Platform - consumer can download the apps they need from many app stores.
Q: Why Wasn’t HarmonyOS used?
A: This year we are still using AOSP. We want to support Google and our partnership with them. We want to continue to partner with US companies like Google. If we cannot work with these companies because of the US ban, then we will create our own solutions. HarmonyOS is ready for deployment in certain areas, but we have postponed it at this time because we still want to work with Google. I think that this US ban has destroyed this industry. It has split the industry - it is harmful for US companies.
4 The smartphone as a product has no relationship with network infrastructure or backbone 5G security.
So why they are doing this – it is really difficult to understand why they are like this.
“This US ban has destroyed this industry”
Nirave Gondhia, TechnoBuffalo: With Huawei having zero interaction with Google, we no longer have Google-based applications. This will be a make-or-break deal with a number of potential customers outside of China. How will Huawei approach this?
A: With Google apps - some of the apps are web-based, or you can download them from other channels, other app stores. Huawei will aim to provide alternative solutions for our users - we cannot install the GMS core, and so using Huawei HMS and Huawei App Gallery is our solution. From next month on, we will ship this to global market.
Q: Specifically about the Google Play Store, can it be side loaded on the Mate 30 series?
A: We recommend the Huawei App Gallery, or other stores. Some Google apps are on the App Gallery store, or on other stores. There are many stores, you can download apps from other stores.
You cannot use Play Store [on the Mate 30 series], because it requires the GMS core which we cannot use. This is not good for Google, for their business – we have made a big contribution to US
companies, and now that is all forbidden. That’s damaging to US companies. We [at Huawei] are very open and transparent.
Q: Which Google Apps will or will not work due to GMS?
A: We hope that consumer can use Google’s apps. There are web versions [through the browser] that still work if users cannot load the applications. However for example, Google apps work on iOS because iOS has the GMS core support. Users might be able to download the GMS core themselves through other stores or third party websites. Some consumers can do that.
Q: Will Huawei do anything to help people Google apps? Will sales people in stores help users?
Or will software be installed to help others install Google apps?
A: We cannot help our users to do it. The retailer might help the user, but not with help from Huawei.
Q: Will the Mate 30 smartphones be preloaded with other app stores?
A: [At the moment, only] Huawei App Gallery. We are discussing to make the other app stores on our phones also. We are looking to preinstall them, or offer them through our app gallery. They can also be side loaded.
Q: If the issue with the US resolves in a positive way, how easy/difficult is it for Huawei to add Google services?
A: Over one night. We can do it immediately. In the past years, we have made big contributions to the Android ecosystem. We are leading many of the innovations. We bring a lot of profit to US
companies.
Andy Boxall, Digital Trends: With regards the App Gallery - you've spoken before about partnerships and the $1b investment bringing developers. Can you explain how you are planning to expand the apps in the App Gallery?
A: We are working with developers to implement applications with the HMS core, rather than GMS core. Today Google and Apple take 30% of their app store revenue, with the developer getting 70%.
With Huawei, we only take 15% and give 85% to the app developer. Huawei only takes 15%. More revenue for the app developer means more profit, and we like that kind of encouragement. We have to do this - we were forced to this. I hope you can understand that. But the US government forced us, we have no other choice. It's not good for the US companies.
Nirave Gondhia: Without the Play Store, it does hamper you slightly. What we've seen from other companies going this route is that there are only three big apps that most people care about: Facebook, Whatsapp, and Instagram. They are all managed by Facebook. Are you talking to Facebook about new apps for the App Gallery?
A: Those apps will work with our phones. Can run those without GMS core.
Dr. Ian Cutress: For the past couple of generations, Huawei has locked down the boot loader to its new phones, which has stopped users from adjusting the device and modifying the OS. With these new developments and the lack of interaction with Google, will this policy of the locked boot loader continue?
5 A: In the past we limited this feature to guarantee more security for the consumer. This time I think perhaps we need to give more freedom for the consumer. We are planning on the Mate 30 and Mate 30 Pro - consumers can do customization by themselves. Especially to download apps that they need from US companies.
“We Bring a Lot of Profit to US Companies”
Q: Huawei has showed great sales and revenue performance of the last couple of years. How will recent ban affect the sales of Mate 30 compared to previous devices?
A: Inside China, sales will increase. Outside China, might decrease. The market is more competitive in China, but the China market will have strong demand and growth. We will sell in the global market, but for sure some market will be influenced by the change. From May, the US ban means Huawei’s retail sales dropped, but retail is now recovering quickly through Q3. I believe that this generation we can sell maybe more than 20 million units. This [the Mate 30 series] will be a very successful product, I do believe. Some consumers, even without Google apps, they love our products. We have influence, but the China market demand will be huge.
Q: For the Mate 30 / Pro, Huawei has over the last 18-24 months in the EU worked with carriers to bring handsets to users. With these new developments, are we still going to see them sold by carriers?
A: Yes. We still have good partnerships with carriers - they buy a lot of our products. That is because of the relationship, but more importantly the consumers love our products. [We have the] Best quality, the best user experience. That is why we still sell many products in the carrier channel. Fore example, our new P30 colors are selling very well. We have the Nova 5T, and some other new products in before the Google ban. We bring them to the European global market and our consumer feedback is still very positive. The carriers need us, and they have trust and support. The users love Huawei.
Q: When the pricing up came up for the Mate 30 series, it was in Euros. Can you say which European countries these devices are coming to?
A: We are planning to come to Europe from next month, step by step. We are still in the process and planning. Even without GMS core, and Google services, we still want to ship the AOSP version to our European consumers.
Q: Can you confirm when Huawei Mate 30 series is coming to the rest of the world (Middle East / Latin America)?
A: We are planning this. We cannot stop our business - our consumers love our products. Some products we don't need Google GMS, like the smartwatch.
Q: You have announced plans for the Mate 30 series to be released next month. Is there a chance there will be a delay?
A: We are planning to ship these devices next month in APAC. For the EU market, we are planning for some markets in the next month, so we don’t expect any postponement to be too long. We are vetting the user experience across multiple regions, so countries can use the product. It's a flagship phone. I'm not humble - it's better than the other flagships!
“Huawei is a Bargaining Chip.
We Follow All Local Laws.”
Q: Do you consider the situation with the US as static, or are there changes ahead with the US relationship?
A: It is a US-China issue, and Huawei is a bargaining chip for it. That’s not good. Some politicians are playing games and making a lot of noise – that is unfair to us. They relate us with China, but Huawei is a global company. We have operations in over 170 countries. We follow all local laws.
Q: What are your personal feelings about the US issue?
A: This kind of trade war is not good for two great nations. This is like a real war. It damages both sides. I do believe this war will finish sooner or later - I believe sooner rather than later. It is too big a damage for two great nations, and that is not good.
“This is like a real war. It damages both sides”
6 Q: During the presentation you covered the automation stuff around the home, such as using automation to turn on the TV, the vacuum, the lights. As far as we understand, that is mostly in the China market right now - are you bringing these features to other geographic regions?
A: Yes, we are planning the ecosystem to the global markets. One example, the phone working with the car, and the ecosystem, is important for next year. For sure we are planning this. Our software already supports this. We need some time to deploy the cloud and do the IoT testing. We are working with some European partners and we already work with these people. We will deploy our AI engine and our AI solution and our HiLink smart home solution outside China to global market from next year. Even today, Huawei Vision is coming to the global market.
7 Yantang, W. (2020, May 24). Record of Ren Zhengfei's latest 20,000-word interview: How much have we misread Huawei's position? Retrieved, May 28, 2020, from:
http://www.p5w.net/weyt/201905/t20190524_2296431.htm
Record of Ren Zhengfei's latest 20,000-word interview: How much have we misread Huawei's position?
The following is the full text of the interview published by the World Wide Web
2. "People's Daily": I want to ask a question about chips. I noticed that in an interview with Japanese media on the 18th, "Huawei does not need US chips, and Huawei is fine." A letter from Huawei to employees was screened. The letter stated that the company was confident and prepared. Where does Huawei ’s confidence come from and what preparations does it make?
Ren Zhengfei: First, we always need American chips. American companies are now fulfilling their responsibilities to go to Washington to apply for approval. If the approval is passed, we still have to buy it or sell it (not only to buy but also to make it more advanced). Therefore, we will not exclude the United States, grow narrowly, and grow together. If there is a real shortage, we have no
difficulty. Because we can manufacture all high-end chips.
In peacetime, we always have a "1 + 1" policy. Half of us buy chips from American companies, and half use our own chips. Although the cost of my own chip is much lower, I still buy American chips at a high price because we cannot be isolated from the world and should be integrated into the world. The friendship between us and American companies has been formed for decades and cannot be destroyed by a single piece of paper.
We still have to buy American devices on a large scale in the future, as long as it can get Washington's approval. The time is very rush now, it will be estimated that the batch will not be approved at one and a half, buffering is possible. If they can get approval, we will still maintain normal trade with American companies and jointly build a human information society instead of building an information society alone.
The Japanese media is a bit extreme when sorting out manuscripts. We can make the same chips as the United States, which does not mean that we will not buy them.
3. Xinhua News Agency: You said that Huawei does not want to be a lone ranger and needs cooperation. Now it is mentioned that you can do both. Can I understand that the protectionism in the United States today will actually interrupt the global supply chain and make the entire market
confused? Second, the United States has questioned Huawei's corporate governance, financial issues and other issues over the past period of time. What aspects of Huawei's voice do you think are opposed to Huawei? Why target Huawei?
Ren Zhengfei: I really don't know what politicians think. I don't think we should be beaten because we are ahead of the United States, because 5G is not an atomic bomb, but it is for the benefit of human society.
The capacity of 5G is 20 times that of 4G and 10,000 times that of 2G. The power consumption of each bit has been reduced by 10 times compared to 4G. The volume has been reduced to 1/3, which has decreased by 70%. 5G base stations are only a little bit larger, 20 kg, as big as a suitcase for filing documents, no tower is needed, and can be freely mounted on poles and hung on the wall; we also have corrosion-resistant materials that will not Corrosion, 5G can be installed in the sewer.
This convenience is most suitable for Europe, which has very old urban areas and cannot install large iron towers like China. Of course, China's large iron towers are not wasteful, and 5G base stations can be hung on them. But no new towers are needed. Each station does not need a crane, etc., and the project cost can be reduced by 10,000 euros in Europe. Not only iron towers, the former base stations required cranes, and road closures were needed to drive them in. 5G base stations are now accessible by hand, so it is very simple.
Second, the energy of 5G bandwidth is very large, it can provide a lot of high-definition content, and it is very simple to spread 8K TV. The propaganda says that the cost has been reduced by 10 times, in fact it can be reduced by 100 times, so that ordinary people can also watch high-definition television, and the culture will increase rapidly. The development of a country depends on culture, philosophy, and education. This is the basis for developing the country. Therefore, 5G changes a society, it also has a very short delay, which can be used for many things in industry.
8 Does Mr. Dong care about the engine being knocked out? We are the edges of the wings may have holes, but at the core we are completely self-centered and really lead the world. The higher the end, the more "spare tires".
Reporter: Do you think the international market order is disrupted?
Ren Zhengfei: No. Europe will not follow it, and most American companies communicate with us very closely.
4. "Global Times": I just talked about the impact on Huawei. After seeing the letter from Hisilicon, I was very enthusiastic in terms of public opinion. Practitioners in the chip industry look at domestic chips in a more objective manner, including the gap between domestic core components and US and foreign companies. Where do you think Huawei's independent products and R & D have gone? Including what is mentioned in the letter, to ensure a continuous and uninterrupted supply next? Is there a tipping point and where is it located?
Ren Zhengfei: Why not take a "cold shower"? I think the most important thing for us is to be calm and calm. The blood is boiling, the slogans are flying all over the sky, and it is useless to fight in the end. It is true to win in the end.
We must first affirm that the depth and breadth of the United States in science and technology are worthy of our study. We still have a lot to lack, especially the products of some small companies in the United States are super cutting-edge. We just focused on our own industry and achieved the current lead, rather than aiming at the national level of the United States.
As far as our company is compared with individual companies, we don't think there is much difference, but as far as our country is compared with the United States, the gap is still large. This has a lot to do with our economic bubble over the years. P2P, Internet, finance, real estate, cottage products, etc. bubbles have made people's academic thoughts bubble. It takes decades to form a basic theory. If everyone does not take the theory seriously and screams, we will not be more powerful in decades. Therefore, we still have to do solid learning.
39. 36 氪: Which department is responsible for the operating system? Will it be open source and attract some developers to come in?
Ren Zhengfei: I don't know which department is responsible. Let's try it. The technical difficulty of making an operating system is not great. The difficulty is ecology. How to build an ecology? This is a big thing, take your time.
40. "Interface": I went to the equity room yesterday. I was also shocked. The rights of Huawei and employees are highly bound. You only hold 1.4% and have only one veto right. Many founders now share the same rights or share more power. Your influence in Huawei is huge. What is the essence of the kernel?
Ren Zhengfei: At the beginning of the year, we completed the voting and election of a new shareholding employee representative meeting. It took more than a year to prepare, and then a one- vote one-vote vote was made. After more than a year of brewing, why does society not know? I don't know why employees consciously keep it to such an extent. The elected representative of the stock- holding employee can no longer represent the stock. He is the representative, one person, one vote for the company's resolution. The board of directors votes on resolutions, and the executive board of directors operates daily operations under the authority of the board of directors.
41. "Pear Video": Mr. Ren has never used a veto power. Do you really want to use it at some moment, or is there any situation in the future where you can use a veto power?
Ren Zhengfei: Originally, there was a deadline for my veto, and it was not necessary to be ready to expire, but when we passed the new charter, we encountered the Brexit incident. If we vote
democratically like Brexit, we may let one The fate of the company is buried, so I retain a veto, and I will temporarily manage it. After some of our teams withdrew and the core elite team formed a small collective, I gave up my personal power and gave up the power to the core elite team of 7 people.
When major problems occurred, they were rejected. Business matters Generally do not need to use.
9 Huawei (2019, November 26). Ren Zhengfei’s Interview with CNN. Retrieved, May 12, 2020, from:
https://www.huawei.com/en/facts/voices-of-huawei/ren-zhengfeis-interview-with-cnn Ren Zhengfei's Interview with CNN
02 Kristie Lu Stout: Huawei has been under intense pressure from the US. And yet, your business is growing. You're selling more smartphones in China, and you're signing up new customers, new international carriers. Is this proof that Huawei will not be defeated by the US measures against it?
Ren: Well, since day one, we have always been a strong supporter of globalization in our operations, so that we can serve the global community by collaborating across the global value chain. A long time ago, however, we realized that there would be all kinds of uncertainties and conflicts between the US and Huawei. We needed to be prepared, so that we wouldn't collapse and could be self-reliant when the US chose not to sell to us. Today, I can say that it won't be a problem for us to survive short term, but I'm concerned whether we will still be a global leader in three to five years. We will delve deep into this topic, and it has become part of our agenda.
03 Kristie Lu Stout: For example, can you maintain leadership in smartphones? Smartphone sales for Huawei are growing, but only in China. The Google app ban is really hurting your international sales. So would you be happy if Huawei became an only-in-China smartphone vendor?
Ren: I don't think things will end up like that. If Huawei is clearly banned by the US from using Google's GMS ecosystem, we will have to put our own ecosystem into use. We believe that we will be able to build up our own global ecosystem within the next two to three years.
Kristie Lu Stout: So you are confident that you would be able to have a global smartphone presence without Google, and without other companies that at the moment are still waiting for licenses to work with Huawei?
Ren: We firmly embrace global supply chains. We welcome US companies to increase their supplies to Huawei, and will use their supplies wherever possible. This will ensure shared success between Huawei and US companies. If US companies are not allowed to supply their products to us, we have our alternatives. If those alternatives become mature and stable, I don't think it's very likely that we will go back to US companies.
So it is now a critical moment for all of us. We hope the US government will take the best interests of US companies into consideration. Huawei's position has always been clear: We firmly embrace globalization. We don't want to close ourselves off by pursuing independent innovation and self- sufficiency. Nevertheless, we need to make preparations in case US companies don't supply components to us. We need to survive.
Kristie Lu Stout: Does Huawei have a Plan B if Google is not going to get a license to work with you?
Ren: Yes, we have a very big Plan B.
Kristie Lu Stout: Have you heard definitively that Google did not get a license to work with you?
Has Google been denied?
Ren: We haven't heard anything about that yet.
Kristie Lu Stout: Right now, Huawei is the No. 2 smartphone vendor in the world. Can Huawei become No. 1 without Google?
Ren: I do not think we will have trouble achieving this, but it will take time.
Kristie Lu Stout: Take time? How can you crack into the overseas market without Google?
Ren: By taking time, I meant the overseas market, because we will start returning to the overseas market next year or the year after that. We are more than determined and capable of doing so.
05 Kristie Lu Stout: Let's talk about 5G. The US has been pressuring its allies, most recently, Canada, the UK, and Germany, not to work with Huawei on 5G. Do you think those countries are open to working with you?
Kristie Lu Stout: The US Federal Communications Commission ruled against Huawei, from accessing the federal government's subsidy money, basically saying that they don't trust Huawei.
As a result, rural carriers in America won't be able to tap into government funding to get
Huawei to build out networks in rural areas. You plan to contest this. Why is it important to you and how do you plan to contest it?
10 Ren: Huawei is a company, not a political entity. We aim to provide high-quality information services to humanity. With this ideal in mind, we work even in the toughest environments, such as high
mountains, rainforests, and many remote areas in Africa.
We are also quite willing to serve American customers. Years ago, we wanted to provide services to large carriers in the US. When this was impossible, we provided services to small carriers instead, to realize our value that way. In making this decision, the US government has failed in its duty to serve the American people. I think they will have to communicate with their people to address this. We are only a vendor and we don't get involved in solving conflicts. The US government has violated the spirit of the country's Constitution by ruling against Huawei instead of acting in the interests of the American people.
Kristie Lu Stout: The US government is allowing politics and the trade war to get ahead of bridging the digital divide. Is that your view?
Ren: I personally believe that politics and the economy can be and should be separated. The largest beneficiary of globalization is the US, because the US is the most powerful country in terms of science and technology. It needs to sell its best products to the rest of the world. If US products are not sold to the whole world, the gap will be filled by alternatives made in other countries, and the US will lose the markets it once had. The US should be confident enough to believe that no country in the world can surpass it yet, at least not any time soon. That said, the time frame could be anything from a few dozen to a hundred years.
The US has very robust innovation mechanisms and innovation drivers as well as a leading legal system, which have attracted many talented people to the US. Currently, no other country can compete with the US. Many of the world's most talented people seek to settle in the US, which makes it
difficult for us to attract top-tier talent. What we get are probably tier-2 or tier-3 talent, but we are a close-knit team. Maybe together, a few of us, or dozens of us can be equivalent to one top-tier mind.
That's why we have a lot more employees than many US companies, but don't necessarily achieve far more than them.
In this sense, the US will continue to lead the world technologically, and globalization is good for the US. But the US government is gradually backing away from globalization and giving up its market share in certain countries, creating opportunities for some smaller companies in those countries to emerge and thrive. And one day these countries may also overtake the US.
07 Kristie Lu Stout: At the core of the US-China tech war is a lack of trust. The US government does not trust Huawei. It thinks Huawei's technology provides a backdoor to the Chinese government and it still thinks that. What can be done to remove the suspicion and to rebuild the trust?
Ren: First, the assertion made by the US government is false. Huawei has never been involved in any such incidents over the past few decades. I don't think we can convince the US, but we can convince its allies. They have used Huawei's equipment for more than 10 or 20 years, so they have a thorough understanding of Huawei. Carriers in these countries will also persuade their governments to
greenlight Huawei and open their domestic markets to us.
08 Kristie Lu Stout: The trust in Huawei and the issue of trust in the Chinese government. If the Chinese government asked Huawei to hand over data, you would have to hand over the data, right?
Ren: First, the Chinese government has never made such requests.
Second, Mr. Yang Jiechi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and Director of the Office of the Foreign Affairs Commission of the CPC Central Committee, made a statement at the Munich Security Conference that China has no law requiring companies to install backdoors. And at the press conference following the Second Session of the 13th National People's Congress in March, Chinese Premier Li Keqiang also said that Chinese companies are not allowed to install backdoors or steal information. These are the official interpretations of Chinese law from the Chinese government.
Third, Huawei has no access to data. We only provide bare equipment to carriers. Data is only generated when carriers run the equipment. Carriers operate in sovereign states, and they have to comply with the laws of these sovereign states.
Huawei has no access to the data and we don't need the data. So from this point of view, what the US has been saying just doesn't hold up.
11 Kristie Lu Stout: So Huawei has given up on the US market entirely?
Ren: Well, we can't say that we've completely given up on the US market. We are still fighting for the rights outlined in the US Constitution. However, the US is currently rejecting our services in the country. For example, US carriers like AT&T and Verizon don't buy our products. So we have no way to serve the American people, even though we have the intention to do so. The US is a country that advocates freedom, so I think it should be open and inclusive towards different players from around the world. But the US is currently turning its back on these principles. How can the US continue to lead the world in the future?
12 Huawei (2019, November 18). Ren Zhengfei's Interview with the Los Angeles Times. Retrieved, May 12, 2020, from: https://www.huawei.com/en/facts/voices-of-huawei/ren-zhengfeis-interview-with- the-los-angeles-times
01 Norman Pearlstine, Executive Editor, Los Angeles Times: It is energizing to be able to speak with you again. I can't think of anything more important right now than what I hope we can talk about. And if you don't mind, I'd like to just say that I have thought about our previous meeting a number of times, and my thoughts have also been with your family and your business. I've also thought a lot about what has changed since then. I'm told, Huawei has already hosted 3,000 media visitors from both China and abroad this year. And I thought if you were willing, perhaps you could just tell us about how you're feeling and about how life has changed. Do you feel that this has been a good use of your time and could you talk about what it has meant for both you and your company?
Ren: The year started off with dark clouds of public opinion forming over us. US sanctions have dragged Huawei into a crisis, where we are fighting for survival. The majority of the public held a negative opinion of us. Even those who wished us well didn't believe that Huawei would survive. The West had very little understanding of Huawei in years past, and we had not refuted the
misrepresentations made by some biased politicians, so some people actually had even more misunderstandings about us than before.
In the past, we always believed that we should win customers' trust, create true value for them, and let them know they need Huawei. Then the misunderstandings held by the media and public would gradually disappear. That's why we would never spend any time fighting against politicians. It was OK if some media outlets didn't understand us.
Over the past few months, especially after the US added Huawei to the Entity List, we have been the center of a major dispute. Therefore, we felt it necessary to tell the world who we really are. I think these clarifications are meaningful. For some people and some areas, Huawei's image has somehow improved. We have gotten to welcome so many journalists from around the world recently, and they have given us many opportunities to explain ourselves. We should be grateful for that. Their visits here will help them see what a company we truly are and deepen communications and understanding from both sides. To us, these visits won't address any problems, but they're an opportunity to build mutual understanding and increase transparency.
02 Norman Pearlstine: How has it affected the company itself in terms of both morale and feelings about working at Huawei? And even more importantly, how has it affected Huawei in terms of how it has changed business practices or business focus, perhaps in different areas than before?
Ren: The US adding us to the Entity List did us a favor because it created a crisis for our employees.
There is a fable called The Boy Who Cried Wolf where a shepherd boy cries wolf to trick the other villagers. When a wolf did come, the villagers thought his cry was another false alarm. Complacency was bred in the process. The same is true for Huawei. With what's going on now, our people feel a fire under them because they realize they'll go down with Huawei if they don't work hard. This great effort by all our employees has driven up our business results. That's a big change we are seeing right now.
Norman Pearlstine: We have the same saying in the United States where we talk about when someone is always predicting a big threat or something, we say, "They are crying wolf." So I think that is something that is well understood.
03 Norman Pearlstine: I have been reading a number of the interviews that you've given
recently, and I was thinking back to our meeting in March when you said that you were worried that Huawei people may have gotten too rich or become too self-satisfied or materialistic, and that you thought if, in fact, things got harder, it would make people go back to sort of the way they were in the early days of Huawei. I've subsequently heard you say, "Yes, business has gone quite well compared to what people were worried about," but I've also heard you say that 2020 is a year when your destiny will be determined and when there is your greatest risk. And I wonder if you could talk a little bit about how you've done better this year, but that you are still so worried about next year. And what is it about next year that has you so concerned?
13 Ren: There's nothing to worry about when it comes to how we will perform in 2020. In fact, we believe we will keep growing. We will be subject to US sanctions throughout the year, but still be showing the world that Huawei can survive and thrive regardless of the pressure from the US.
We welcome media representatives to come and check up on us again next year to see if we are still surviving. According to our forecasts, we will continue to grow in 2020, but the growth rate will not be significant. Our growth for this October slowed to 17%, and we expect the growth to be around 10% in 2020. That's the slowest growth rate we could expect. The actual growth might be higher.
In my opinion, we will start to scale our growth in 2021, but others on our senior management team do not think our scaled growth will resume until 2022. As you can see, their views differ from mine. But their forecasts are probably more prudent, so I recently signed a document that used their estimates.
we deemed unnecessary.
05 Norman Pearlstine: Does Huawei remain a global multinational company? You now are in, I think, 177 or 180 countries and regions. Or does this action by the US make Huawei more focused on domestic opportunities?
Ren: Trump's attack on us has made the company famous worldwide. As a result, many more people around the world are now actively buying products from us. We will always be a globalized company and will always be able to compete around the world. We will never give up on globalization.
We firmly embrace globalization in terms of the supply chain. If US companies are willing to sell their components to us, we will do our best to use them in our systems. If we don't use them, it will not help the world form a globalized resource allocation system. We will not be so narrow-minded as to pursue self-reliance and independent innovation, and we will not retreat to the domestic market like cowards.
07 Norman Pearlstine: Some of the industry analysts in the United States who write for much narrower publications specializing in business intelligence, have suggested that the most difficult areas for Huawei to respond to the restrictions are around specialized chips that are difficult to manufacture, and around building a world-class group of app developers who are willing to take on a new operating system beyond the Android system that in some parts has been denied to Huawei.
Is that a fair analysis? Are those the two things that you most need to overcome? Or are there other product implications that are also a challenge for you?
Ren: I think the analysis is rather fair and accurate. These are the challenges we need to address. No problem cannot be solved. Tens of thousands of years ago, our ancestors were still living in the wilderness. They could not even walk upright back then and might have had tails. Humans today, however, have no tails and dress in suits. Nature and history tell us that nothing remains immutable.
The world will surely move towards collaboration so we can share success. Without collaboration, people will be forced to find alternatives, which ultimately will harm those who refuse collaboration.
08 Norman Pearlstine: Have you had a chance to look at or listen to any of the Democratic candidates who are trying to run against President Trump? And do you have concerns that, in some respects, President Trump has made the whole country seem more nationalist and more anti-Chinese? When I listen to Elizabeth Warren, Bernie Sanders, or even Joe Biden, so much of the conversation is about kind of nationalist ideas and kind of rejection of the globalization that has been a factor in global growth for the last 70 years.
Ren: The US has made remarkable progress since the 1980s. This progress can be attributed to globalization. China has also benefited greatly from globalization. However, many of the benefits brought to China by globalization might be bubbles. China needs to spend a lot of time and energy easing these bubbles, in order to develop at a steadier pace.
For the past 40 years, the US economy has shifted from the real economy to financial innovation. The value created by this financial innovation has greatly outweighed the value created by the real
economy. However, the world is facing a supply surplus and a demand deficiency. How can the US financial sector create value in this case? The US and China need to collaborate to complement each other's shortcomings. A US-China decoupling will harm both the US and China's interests.
13 David Pierson, Southeast Asia Correspondent, Los Angeles Times: Mr. Ren, how much would you say Huawei being placed on the Entity List has accelerated the timeline to fully develop your own semiconductors and software ecosystem for your mobile platform?
Ren: It has facilitated our independent development of these things, but we are not sure to what extent.
14 David Pierson: Can you talk about your strategy with the chips? I mean, it's been said you've been hoarding chips in order to deliver handsets. Can you talk about your current supply for chips and how you plan to continue delivering growth regarding handsets?
Ren: Can people work on chipsets also work on software? I've never heard of this. We have never halted our chip development, nor have we changed our path. We are always moving forward in measured steps. Phone operating systems and ecosystems are all about software. However, when we improve our software capabilities, we don't say that we will reduce our capacity for hardware.
David Pierson: My question was more about whether you were actually hoarding chips from your suppliers before the Entity List. With the difficulty of being put on the List, were you able to secure enough supply of semiconductors to last you some time?
Ren: Huawei has generated huge sales revenue this year. So hoarding chips to ensure our supply would require tens of billions of dollars. Does Huawei have that much money to hoard chips? I don't think so. Also, suppliers won't sell that many chips to us. Therefore, we don't hoard chips to fuel our development. That's not our approach.
The problem we face today is that our supplies are insufficient to meet market demands. That's why our customers are rushing to buy our products. Apart from that, the supply of chips to us is also insufficient. Particularly, TSMC doesn't have sufficient production capacity to meet huge demands.
Therefore, it is impossible for us to hoard chips. Even if we could hoard chips, what happens when the chips we hoard become outdated? Hoarding goods is still a traditional way of thinking.
14 Norman Pearlstine: Do you see Harmony becoming a global alternative to Android or to Apple?
Ren: The HarmonyOS was originally designed for the Internet of Things. What matters most for IoT are high bandwidth and low latency. Both autonomous driving and automated production require low latency. At this point in time, we are still not sure whether we will be able to turn the HarmonyOS into a mobile operating system or make it open source, when we cannot source from our partners.
15 Cutress, I. (2020, March 26). Richard Yu Press Interview: Huawei’s CEO on COVID-19 and Huawei Apps. Retrieved, May 11, 2020, from: https://www.anandtech.com/show/15666/huawei-ceo-richard- yu-global-press-qa-on-covid19-and-huawei-services
Richard Yu Press Interview: Huawei's CEO on COVID-19 and Huawei Apps
Today Huawei launched its latest generation of photography focused smartphone: the P40 series. This series consists of the P40, the P40 Pro, and the P40 Pro+, starting at €799 for the cheapest going up to
€1399 for the high-end model, which features a 40W wireless charge mode, a 6.58-inch OLED 90 Hz display, 10x optical zoom, up to 100x zoom, Wi-Fi 6, and a range of new photography features to get the best shot.
After the launch, Huawei’s Consumer Business Group (CBG) CEO Richard Yu invited the press to a group question and answer session. There were two main topics that dominated the session - how the prevalence of COVID-19 is affecting Huawei’s strategy, but also how the continuation of the US ban on Huawei interacting with US companies is affecting users and in particular the available apps on Huawei’s own App Gallery that can’t use Google’s services.
CEO of Huawei CBG, Richard Yu
Mike Lowe, Pocket Lint: How will COVID-19 affect production and manufacturing? Will it cause delays with production of devices like the P40, and will it effect any products going forwards, particularly as they come to the EU markets?
Richard Yu: We already started manufacturing the P40 in Q4 2019. So despite China having COVID, we see it as under control now, and the manufacturing and supply chains have recovered. Our supply for the P40 has been eased, so it is ready now, because we started last year, and have been
manufacturing for four months.Even in February, during Chinese New Year and due to COVID, manufacturing was down, but it has recovered. We feel that we can meet the market needs with demand for the P40 series.
In the EU, or other countries, the COVID situation is not like China is today. China (from our point of view) has recovered, but outside China, there are many physical stores that are closed. But our
products are ready to ship when the stores are ready. Even during the COVID situation, we were still manufacturing - we had some supply chain issues, but everything has recovered and we can guarantee supply.
Huawei P40 Pro+ in Ice White
Leo Kelion, BBC: How will demand change during the COVID-19 crisis? Launching a family of flagship smartphones during a time when people are losing jobs, or have not enough money, people are considering purchasing other devices for study and such. To what extent do you think this is going to hit demand?
A: The smartphone is more and more important for everyone. People spend so much time with their phones, more time than on a PC, or a laptop, or a tablet. Now because more and more people are working from home, we do see there is a strong demand on PC/tablet, and also the mobile broadband, the home routers, mobile wifi and such - all of these are seeing strong demand. The smartphone also has strong demand, because people are using more smartphones. Our flagship phones, with 5G, are the best performing in the world, with the best camera technology, and with many new innovations and have smooth operation. I think these features are stimulating the market.
Because of COVID, our PC/tablet demand has increased a lot, and yes people need more PCs or tablets for kids, for family, or for work. But we also see the smartphone is getting more important, with people spending time at home. We still feel the demands on us to launch new flagship devices, with 5G and improved camera features. Our devices also work together as one seamless solution - such as PC and smartphone. We feel we still have a strong demand.
Also, we have launched our products and our price is very competitive, starting from 799 Euro. The P40 Pro is only 999 with a super high specification. I hope that the P40 series will sell very well.
16 Guillaume Grallet, Le Point: Do you think that as the world is fighting against COVID-19 that data from geolocation services can help in fighting the disease or in getting better treatment?
A: With a smartphone with AI and all the sensors, we can help to be honest to help identify. We have software and we should help all the consumers with privacy and protection. We have an app ready in China now that can detect heartbeat and things through AI, and that’s innovative technology, like with breathing rate and stress. The AI can learn people, and it is quite accurate. This functionality is available to new apps for phones with AI. Our P40 Pro+ can even detect temperature using a unique algorithm - actually our Global Sales team said they didn’t need it, but our China Sales team wanted it! It can check body temperature with the rear cameras, and it’s very accurate. It’s new technology.
With all these technologies it can help, but we need to get permission from consumers, and we care about privacy. We have the technology, and we’ve done comparisons with professional machines, and it’s very accurate. The technology on the phones, along with AI, can work very well, that’s why technology can do many things - with time we can see launching some more important services.
Christopher Denbach, Deutsche Press-Agentur: What is the state of development of Huawei’s Mobile Services (HMS)? What is the state of the ecosystem?
A: Huawei Mobile Services started May of last year, and it has been expanding. Progress is very good.
The more and more popular top apps are now in Huawei’s App Gallery and integrated with the
Huawei Mobile Service Core. It gets better and better with time, and the P40 series are the first phones that are full of HMS apps.
We still want to continue our cooperation with Google, but we do not have a choice. We have built HMS to do this, and the company is ready to give the consumers more choice. We make a lot of profit for US companies, but they ban us, which gives less choice to consumers. It is difficult to
understand. For the last 3 years we have had a good contribution to the Android ecosystem, with technology and ideas and everything, but also we enable big profits to US companies. Google uses ideas that are first from Huawei. But unfortunately the US ban influences us a lot.
But we are recovering well, and HMS Core and HMS Services will be very successful in the future. It is getting better every month, every week, every day. We do still want to cooperate with Google. But we need the US government licence and permission.
Basil Kronfli, Let’s Talk About Tech: It’s clear that Huawei is doing a lot with making HMS a more appealing offer, as it is available for all smartphones to download, but it has a long way to go to be seamless for the average user. The Mate 30 came to market and there was lots of
guidance to sales staff to explain how the device worked. How will that messaging change for the P40 series, when common users might not understand that common apps like Uber do not work right now?
A: I understand your concern. We provide full retail services and help in packaging, to help when the customer unboxes. We want to provide a full service to help the user clone their old phone to a new phone, but also how to download apps if they need them. In the beginning with HMS and the App Gallery, perhaps some apps are not ready, but they could download them from elsewhere. With time, most of the popular apps will integrate HMS Core, and be in the App Gallery. That will improve very quickly. In the beginning, perhaps it was not so perfect, but with time it will get better. I still have confidence it will quickly improve. But our service, and through our retail service partners, we can help the consumer to tell them how to use all of these popular apps and how to use the phones and use the full capabilities.
David Phelan, The Independent: What are Huawei’s ambitions for P40 Pro, and how does it fit into the strategy? Also, is there any news for the Huawei App Maps app built with TomTom?
A: With the P40 Pro, we want to cover more volume on high end users. The Pro+ is even more towards the higher end. We think the P40 Pro will be the highest volume, then the P40, then the Pro+.
We have confidence that this is the most powerful 5G smartphone, with the best Wi-Fi 6 performance, and the best performing product. The design is also compact. All this new technology camera and 5G, I hope this generation can sell a lot of volume, as that’s my target. In China the volume every
generation increases a lot, our retail shipments do.
17 With TomTom, our partnership progresses very well. TomTom is to provide location services and a Maps service with HMS Core to all the apps that need location services. We want to give consumers stand alone apps for navigation from Tomtom and it’s going very well and positive. That’s good news.
Google’s map is very good, and users can still use it for navigation through the browser, but without an account you don’t have preferences, but the navigation still works.
Ben Sin, Forbes: Can you tell us about Huawei’s 1+8+N strategy?
A: We started this more than 2 years ago in China, and it is very successful. This strategy is our full scenario Smart AI Life strategy. We make all the devices to work together seamlessly and bring the best experience to user at home, travelling, sports, or any scenario.
1 means the smartphone, 8 means the eight most common devices, and N is everything IoT and Smart Home, with ‘plus’ being the connection. Huawei will design 1 (smartphone) and 8 (most common devices) and the plus is the connection, and the N is the wider ecosystem. N is for partners, like Bosch, Siemens, like Panasonic - home electronic product vendors. We work with a wide range of products with Home AI Life. That’s our strategy, to build this ecosystem with hardware, with software, with a connection, with voice, from a control panel - it should all be seamless. This is how devices and collaboration works for a seamless experience.
It’s a 5 year strategy, with Smart Home AI, HiLink, with Celia our new AI voice assistant, all built around HMS Core and the App Gallery. It is an ecosystem. We offer more value to local app developers, with more revenue sharing and more support, and we want to offer the best local integration for experiences. It really is a project for the next 5-10 years.
Damien Wilde, 9to5 Google: With the App Gallery, what has been the feedback from moving from GMS to HMS core?
A: From the appearance for the app developer, to switch to HMS core, it’s very convenient, very quick. In one or two days, you can do the full integration. It’s very easy. In the beginning, app
developers do not understand Huawei, but when they know, they say it is very convenient. We provide a development environment and tools to help the app developer to make it quick and easy for HMS core. We have a toolkit for this, and an IDE.
Mishaal Rahman, XDA: What kind of customer service does the App Gallery provide developers? We’ve heard from developers that Google’s App System makes it difficult to actually contact a person, so what about Huawei?
A: We want to learn what others are doing, and we want to do them better! We are improving in this area. We are building the hotline and services to support this. We are newcomers, and in many areas we are building our capabilities - we are progressing our capabilities above and beyond. We are also investing more.
Daniel Zlatec, PhoneArena: I’ve been using the P40 Pro for 2 days, and I’m amazed about the camera. When all the folks from Nokia and Lumia went to work for Huawei, did they help with this camera development?
A: We have a great mobile photography talent and team - not just from one company, but we get professional experts from lots of companies to come and join us in Huawei. DSLR from Japan, from Leica, we have the best collection of top talent in Huawei. This is why we are leading in mobile phone innovation. We have strong R&D in Finland, also Sweden, in many countries worldwide - also in Japan, in France. We have a very powerful team developing our ISP, our sensors, modules - it’s spread all over.
Katie Collins, CNET: How does it feel to be launching a phone during COVID-19? Is it surreal to have an event like this?
A: From the China schedule, we have a strict control on COVID.In the beginning, many Chinese had a worry that this COVID will make us lose control of our product timeline. But the Chinese Government got it under control very quickly. So the situation is good, people go back to work, back to shopping mall, and other public areas - it’s very good. Other countries can learn this. We moved the launch to
18 online, we think it is still OK because China is OK. To avoid any risk, we moved the launch to online, and offline more and more stores are opening in order to buy the device over time. We launched the product on schedule, and are shipping on schedule - we have a strong commitment to our customers, even during COVID. I live in China, and I want to tell you China is very safe. I think every
government can learn from each other, and this can be under control very quickly. I’m still very positive on this!
Paul Sandle, Reuters: How are we going to mitigate the GMS issue for P40 and other devices?
A: We want to talk with the leading app developers to quickly integrate HMS Core and put the apps on the Huawei App Gallery as soon as possible. I hope the media can tell the app developers this! It is very quick to do with HMS. This is our top priority. In our global team, our business development team, their priority is to work with developers. There are lots of apps! So it will require some time. But it is getting quicker. The media should be able to tell that to the developers.
We also want to support Google, so we hope that we are issued a licence. This is our long term goal - we have grown to the #2 in the world, even without the US. We think we can contribute a lot of revenue and profit to our partners in the US. We want to continue this partnership for the next 10 years. But we are still working on our own HMS integration. We will improve very quickly. In some countries we have made a lot of very good progress.
Alex Todd, Tech Advisor: How does COVID affect the marketing of the phones? What’s the strategy?
A: With COVID, most people are told to stay inside and do not go out. So the most effective is online or TV. For online the marketing is more effective than outside on the street. So we will invest more in our marketing, our branding, ecommerce, and also with some of the TV channels like that. We continue to invest in marketing branding.
Andy Boxall, Digital Trends: Celia - the new Huawei assistant. What is the direction of Celia, regarding all Huawei devices. Google integrates its assistant into everything, but Samsung’s Bixby has a back seat to the ecosystem. How will Celia be pitched in this space?
A: Because of the US ban, we used to have Google and Alexa, but now we use Celia. Every country has its own optimized version of Google and Alexa, and we want to launch everywhere and give the consumer more choice. We hope that the consumer can ask for any assistant and we want to give the consumer more convenience. We want to make Celia more convenient so we will continue in this area.
But we want to use more than just Celia.
Because of the US ban, we want to get the licence to use the others to give the consumers more choice.
We want to make the Celia more competitive with other assistants, in some areas at least. That’s my target, my ambition. We will continue to invest. With time, we will launch further. Rome was not built in a day! We need more time, but our ambition is high and we can catch up and do better.
19 Wu, W. (2020, April 26). Huawei boss Ren Zhengfei says company has no plans to cut ties with US suppliers. Retrieved, May 11, 2020, from:
https://www.scmp.com/print/news/china/diplomacy/article/3081613/huawei-boss-ren-zhengfei-says- company-has-no-plans-cut-ties-us
Huawei boss Ren Zhengfei says company has no plans to cut ties with US suppliers
Chinese tech firm bought US$18.7 billion worth of parts from ‘our good friend’ the US last year, CEO and founder says China has to be realistic about its ability to move up the industrial supply chain and
‘can’t have too many illusions’, he says.
Chinese telecoms giant Huawei Technologies, which has been at the centre of the technology war between China and the United States, will continue to use American components in its smartphones despite having other options, its founder said.
In an interview with Dragon magazine, published by the Gansu Academy of Social Sciences, Ren Zhengfei, who is also chief executive of the world’s largest telecoms equipment supplier, said also that China should take a sober view of the challenges it faces in trying to change global industrial chains.
“We procured US$18.7 billion worth of parts from the US last year, a big increase from US$11 billion in the past. We are not thinking of replacing US components,” he said. “The US will always be our good friend.” Ren’s comments came despite the company being put on the US commerce department’s entity list, which means American firms can only sell to Huawei if they have been granted permission to do so by the government.
Richard Yu Chengdong, chief executive of the firm’s consumer business group, said on April 9 that Huawei had the option not to use US components in its smartphones but wanted to maintain good relationships with its American suppliers. After being placed on the entity list in May last year, Huawei raced to develop or procure components that did not use American technology. Three months later it launched HarmonyOS, a new operating system designed to run on all its devices, including smartphones, though it said at the time it preferred to continue using Google’s Android system. “It would be OK if we didn’t use US components, but what happens if consumers don’t buy our products,” Ren said. “The operating systems of Android and Apple have enjoyed massive sales in the world as consumers have become accustomed to them.” HarmonyOS was not developed to be a competitor to US alternatives but rather as a solution to being put on the entity list, Ren said. “Huawei is a latecomer, so it would be very difficult to surpass the operating systems of Android and Apple. It might take a long period of time, but no more than 300 years,” he joked. Huawei had “very friendly” relationships with Google and Apple, and their development of 5G smartphones was helpful, Ren said.
With the disruption caused by the Covid-19 pandemic to global supply chains, as well as talk about the US and China decoupling economically as a result of their near two-year-long trade war, Ren said it would be impossible for any country to become totally self-sufficient. The cost alone would be prohibitive, he said, adding that China should optimise its business environment to maintain the attractiveness of its market while improving its industrial competitiveness. “It would be a mistake for countries to move industrial chains back home, as the world economy is set up to develop through globalisation.
Competitiveness evolves as part of globalisation,” he said. “The massive middle- and low-end
manufacturing sectors in China have been transferred to countries like Thailand and Vietnam, while the US’s hi-tech industry surpasses China’s. “Chinese manufacturing is in the middle layer of the global industrial chain, and it is set to face difficulty [moving up], so we can’t have too many illusions,” he said.
The global health crisis had had a major impact on the production, sale and delivery of Huawei products, Ren said. In an interview last month, he said Huawei would increase its research and development budget for 2020 by 33 per cent from last year to more than US$20 billion. The company launched its new P40 range of smartphones last month.
