Huawei hale and hearty despite global downturn

As the global economic slowdown eats into the profits of many companies, an annual sales target of $30 billion for 2009 might be no more than a daydream.

However, Chinese telecom solutions provider Huawei Technologies Co, Ltd envisages its contracted global sales will increase 28.8 per cent from last year's $23.3 billion.

For Huawei, this is not necessarily a mission impossible, as a good opportunity to boost its market share is just ahead. China recently issued three 3G licenses to its main mobile carriers, ushering in a new age in telecommunications. More than 170 billion yuan will be invested in the construction of the 3G network. And Huawei, as the leading network equipment supplier in China, is set to cash in on this.

The company's large number of patents may also draw its ambitious goal closer to reality. Huawei has the fifth-largest number of 3G patents in the world, and ranks third in patents for LTE (Long Term Evolution), considered to be the successor to UMTS 3G technology. Advanced technology is undoubtedly playing a major role in Huawei's development.

In 2008, thanks to its consistent efforts in research and innovation, the company achieved $23.3 billion in contracted sales, up 46 percent, despite the global economic slowdown.

"It seems that the financial crisis hasn't had a big impact on Huawei. Instead, it is more of an opportunity, " Xu Zhijun, senior vice-president of Huawei, was quoted as saying.

Of its $23.3 billion contracted sales, 75 percent came from overseas. Even in areas badly hit by the financial crisis such as Europe and North America, Huawei has increased its sales by 42 percent and 58 percent respectively, marking its arrival on the scene as a truly international telecommunications company.

The reason for this success lies in research and development, without which it would have found it hard to make any inroads into developed markets. In 2008, Huawei spent as much as 12 billion yuan on product research. At least 10 percent of its total sales revenue was used to develop new technologies. The company also established an intellectual property department.

In a newsletter published by WIPO this February, Huawei filed the most PCT applications in 2008, surpassing companies like Panasonic Corporation and Koninklijke Philips Electronics NV. It ranked only the 13th in PCT applications in 2006, but last year, with 1,737 applications, it jumped to first place.

WIPO said: "For the first time, a Chinese company topped the list of PCT applicants in 2008."

Huawei has also been the first in patent applications in China for many years. By the end of 2008, it had filed as many applications as 25,000 both at home and abroad.

In another development, Huawei aims to start selling phone models using Google's Android software platform while introducing more models next year.

Edward Chen, head of Huawei's devices unit, told reporters that the firm was also considering introducing phones using software from Symbian, the leading software platform, and from Linux foundation LiMo.

The market for software platforms on cell phones is led by Nokia's Symbian operating system, but it has lost ground over the past year to Apple and BlackBerry maker Research in Motion.

Computer operating system Linux has had little success in cell phones thus far, but its role is increasing with the LiMo platform, and Google is using Linux for its Android platform.