How Huawei is reorganizing its business in the face of US sanctions

Fiscal 2021 has been a nightmare for Huawei. The Chinese giant of telecom equipment and smartphones saw its turnover drop by nearly 30%, to 634 billion yuan (87 billion euros). This collapse is the consequence of violent American sanctions against it. Since 2019, Huawei can no longer source technologies ” made in USA “. This caused, in particular, a gigantic drop in its smartphone sales. However, these sanctions, decided under Donald Trump, seem engraved in stone … Since his arrival at the White House, Joe Biden has decided to keep a hard line vis-à-vis Huawei and China.

In other words, Huawei has no choice: it must imperatively reinvent itself, and invest in activities where it can do without components and technologies from the country of Uncle Sam. The task is not easy. But the group, which has around 190,000 employees worldwide, wants to capitalize on its enormous R&D resources, which represent nearly half of its workforce, to revive itself. At a conference in Shenzhen on Tuesday, Ken Hu, Huawei’s rotating CEO, detailed his strategy.

Loss of leadership in certain technologies

His goal ? Make Huawei a benchmark player to help companies in all industries succeed in their “digital transformation” to boost their sales, reduce costs, while reducing their carbon footprint. Connectivity, terminals, cloud… Huawei wishes, here, to offer the full range of tools necessary for manufacturers. The challenge for the Shenzhen group is to remain at the forefront in all these areas, but without American technologies. Ken Hu does not hide it: without them, the group did not succeed “to maintain its leadership in certain technologies”. To keep innovating, Huawei is mobilizing its researchers in areas deemed promising where they can work unhindered, especially in software and computer system architecture.

Huawei assures that its work is bearing fruit. On the connectivity front, the group aims increase network bandwidth, coverage and experience”, launches Ken Hu. To do this, the leader wishes to bring, ” everywhere “, from “10 Gb/s connections” thanks to its 5.5G, – an improvement of 5G -, and its version for fixed uses. These technologies will provide experiences “more immersive”argues Ken Hu, and will be more suited to “industrial control scenarios”.

“Transforming data centers into supercomputers”

All the data collected by mobile networks is intended to be routed to cloud infrastructures, to be processed by various algorithms and artificial intelligence software. This is why Huawei is investing heavily in this area. The objective is, according to Ken Hu, to transform data centers into individual supercomputers to exponentially increase performance and power consumption”.

In terms of terminals and smartphones, Huawei is forced to review its entire strategy. “Due to a lack of chips [lié aux sanctions américaines, NDLR]this activity has declined sharply over the past two years”, notes Hen Hu. His idea: to develop more“user experiences” on “all aspects of daily life”, rather than continuing, as Huawei has done in the past, to multiply the releases of increasingly powerful smartphones. These prospects seem, to tell the truth, a little fuzzy. Huawei illustrates its point with the launch, at the end of last year, of a connected watch capable of monitoring several health parameters to better manage and take charge of certain diseases.

A new organization

In the end, Huawei has reviewed its organization to better sell its solutions to manufacturers. Each sector now has its own dedicated teams, to better adapt to customer needs. This is an imperative, emphasizes Ken Hu, because not all companies have the same level of maturity in terms of digital appropriation. “The new information and communication technologies and finance sectors were the first to embark on the adventure, and their transformation is therefore profound, right down to their basic production systems”says the manager. Converselyhe continues, everything remains to be done in “real estate, construction and agriculture”. Will this new strategy allow Huawei to recover? Answer in the next few months.