September 23—Guo Ping, the rotating chairman of Chinese conglomerate Huawei, revealed his firm has “sufficient” telecom gear inventory to continue supplying its customers. The executive’s comments follow the U.S. government’s restriction of its access to essential smartphone manufacturing technology.
Why Huawei is Directing Focus to its Telecom Gear Business
The Shenzhen-based conglomerate is working to grow its telecom business to make up for the contraction on its wireless segment.
Because of its innovative chipset and effective marketing strategies, Huawei had become one of the world’s top handset manufacturers in the last decade. However, the firm’s once-thriving mobile device business became uncertain after the U.S. Department of Commerce issued new regulations restricting its access to American technology.
The company admitted last month it is running through its handset processor stock and cannot replenish its inventory.
On the other hand, the firm’s telecom business is in much better shape. In addition to having networking gear on hand, Intel received authorization to sell it certain electronic components. Since the corporation’s telecom business represents a way forward, it is aggressively pursuing new opportunities in underserved markets like Eastern and Central Europe.
Last month, the South China Morning Post revealed Huawei has significantly increased its investments and recruitment efforts in Russia. Previously, the firm worked with local brands to launch new 5G networks and cloud services in the country. The company also opened a new 5G lab in Serbia as part of a new partnership with the region’s local government.
Ana Brnabic, Serbia’s Prime Minister, said Huawei would help the nation develop its artificial intelligence, digital learning, and smart infrastructure resources in the future.
While those successes are meaningful, the firm still needs other revenue streams to make up for the loss of its smartphone sales. Last year, the corporation made $19.1 billion in revenue, half of which came from its consumer products division. The company is reportedly addressing that problem by expanding its electronics portfolio.
Huawei Wants to Make Desktop PCs
According to DigiTimes, Huawei is preparing to expand its offerings with a lineup of desktop monitors and personal computers. The company has sold a range of laptops since 2016, but has never sold a branded desktop PC or peripherals before.
The firm contracted Chinese manufacturer BOE Technology to produce two to three desktop computer display models. The conglomerate tasked Hong Kong’s TPV Technology with fabricating its line of curved gaming monitors. Huawei reportedly has high expectations for its video game equipment as its initial orders exceed 1 million units.
The corporation is also developing a new desktop personal computer called the Qingyun W510. The firm’s PC will run a Chinese version of Linux called Unity and comes equipped with a self-designed 7nm central processing unit (CPU). Huawei is subcontracting the machine’s production through a Wuhan-based Foxconn subsidiary named Hongfujin Precision Industry.
DigiTimes did not offer a release timeline for Huawei’s new consumer products.
At this point, it is unclear how Huawei will fare after the seemingly inevitable termination of its smartphone business. But the company’s quick pivot to growing its telecom and consumer products segments reflects a deep-seated tenacity. With a bit of luck, that characteristic could see it emerge from its current challenges in a strong position.