Exclusive Huawei Founder Urges Switch To Software To Counter US Sanctions

Huawei founder Ren Zhengfei attends a panel discussion at the company’s headquarters in Shenzhen, Guangdong province, China on June 17, 2019. REUTERS / Aly Song

Chinese tech giant Huawei Technologies (HWT.UL) founder Ren Zhengfei called on company staff to “dare to lead the world” in software as the company seeks growth beyond hardware operations. US sanctions have paralyzed.

The internal memo seen by Reuters is the clearest evidence to date of the company’s management as it responds to the immense pressure sanctions have placed on the cellphone business that was at its heart.

Ren said in the note that the company is focusing on software because future development in the field is fundamentally “beyond the control of the United States and we will have more independence and autonomy.”

As it will be difficult for Huawei to produce advanced hardware in the short term, it should focus on building software ecosystems, such as its HarmonyOS operating system, its Mindspore cloud artificial intelligence system, and others. computer products, indicates the note.

Former US President Donald Trump put Huawei on an export blacklist in 2019 and banned it from accessing critical US-sourced technologies, hampering its ability to design its own chips and sell itself. sourcing from outside suppliers.

The administration of US President Joe Biden has given no indication that it will lift Trump’s sanctions.

The blacklist also banned Google (GOOGL.O) from providing technical support for new models of Huawei phones and from accessing Google Mobile Services, the set of development services on which most Android apps are based.

Huawei’s 2020 annual report did not indicate how much of its 891.4 billion yuan ($ 138.7 billion) in revenue came from its software.


Ren’s note also said that the software’s push would depend on finding the right business model and that the company should take an open source approach, calling on staff to “absorb nutrients” through open source communities.

He said the company’s Welink business communications platform relied on traditional software licenses, which were unsuitable for cloud computing and inferior to a rival product from tech giant Alibaba (9988.HK).

Given the difficulty of working in the United States, Ren’s note says the company should strengthen its position in its country and expand its territory with a view to possibly excluding the United States.

“Once we dominate Europe, Asia-Pacific, and Africa, if America’s standards don’t match ours, and we can’t enter the United States, then the United States cannot. enter our territory, ”he said.

Ren’s memo confirms leadership implied by the company’s previous announcements that hinted at a drop in handset hardware.

In April, Rotary Chairman Eric Xu said the company will invest more than $ 1 billion this year in its smart driving business.

It is also expanding its smart car partnership with state-owned Chongqing Changan Automobile Co Ltd to include the design and development of semiconductors for automatic use, sources told Reuters earlier this month.

Besides the pressure of sanctions, Huawei is known for its grueling work culture, and the memo recommended that software teams hire psychology professionals to help young hires who might find the company emotionally difficult.

“Now some young people have a high IQ, but their EQ can be low, and their mentality is not mature, and it is easy for them to get sick,” Ren said.

($ 1 = 6.4270 yuan Chinese renminbi)

Our standards: Thomson Reuters Trust Principles.

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