Вы находитесь на странице: 1из 21

A Guide To Investment In China

COMPANY PROFILE

— Huawei Technologies

June 2005

MarketAvenue
www.marketavenue.cn
COMPANY PROFILE

Table of Contents
A Guide To Investment In China

1 General Company Information


2 Corporate Structure
2.1 Organizational Structure
2.2 Financial Structure
2.3 Major Partnerships, JVs & Alliances
3 Market Analysis
3.1 Major Products
3.2 Target Market and Consumers
3.2.1 Major Competitors
3.2.1.1 Domestic Competitors
3.2.1.2 International Competitors
3.2.2 Sales and Market Share
3.2.2.1 Internaltional Sales by Region
3.2.2.2 Internaltional Sales by Product
3.2.2.3 China Market Share by Product
4 Human Resource and R&D
4.1 Human Resource
4.2 R&D
5 Executive Summary

List of Figures

Figure 2-1: Huawei Organizational Chart


Figure 2-2: Huawei Sales & Marketing Department Organizational Chart
Figure 2-3: Huawei’s Global Sales Regions
Figure 2-4: Huawei Alliances
Figure 3-1: Huawei Technologies Product Lines
Figure 3-2: Chinese Equipment Vendors’ Global Revenues, 2004 (USD M)

www.marketavenue.cn 1
COMPANY PROFILE

Figure 3-3: International Equipment Vendors’ Global Revenues, 2004 (USD B)


Figure 3-4: Huawei Sales Contracts, 1999-2008 (USD B)
Figure 3-5: Huawei’s Domestic Sales by Product, 1H 2005 (%)
Figure 3-6: Huawei International Sales by Region, 2004 (%)
Figure 3-7: Huawei International Sales by Product, 2004 (%)
Figure 3-8: Huawei China Access Market Share and Revenue, 2003 - 1H 2005
Figure 3-9: Huawei China Transmission Market Share and Revenue, 2003 - 1H
2005
Figure 3-10: Huawei China Switching Market Share and Revenue, 2003 - 1H
2005
Figure 3-11: Huawei China DSLAM Market Share and Revenue, 2003 - 1H 2005
Figure 3-12: Huawei China Data Communications Market Share and Revenue,
2003 - 1H 2005
Figure 3-13: Huawei China GSM Equipment Market Share and Revenue, 2003 -
1H 2005
Figure 4-1: Huawei Employees, 1996-2005
Figure 4-2: Huawei R&D Investment, 2001-2008 (USD M)
Figure 4-3: Huawei R&D Investment by Product Line, 2004 (%)

A Guide To Investment In China

2 www.marketavenue.cn
COMPANY PROFILE

1. General Company Information


A Guide To Investment In China

 Huawei Technologies is a provider of customized network solutions for telecom


carriers around the world. Huawei specializes in communications equipments
such as 3G, next generation networks (NGN), switching, DSL, optical networks,
and data communications. Huawei is China’s largest telecom vendor and one of
China’s single largest employers.
– Global Headquarters: Shenzhen, China
– Regional Headquarters: Brasilia, Brazil; Plano, Texas; Kuala Lumpur, Malaysia;
London, England; Johannesburg, South Africa; Cairo, Egypt; Moscow, Russia;
and Sydney, Australia
– 55 separate country offices
– Eight main R&D Centers: Shenzhen, Shanghai, Beijing, Nanjing, Stockholm,
Dallas, Bangalore, and Moscow

Huawei Headquarters
Huawei Technologies Co., Ltd.
Bantian, Longgang District
Shenzhen 518129
People’s Republic of China
Tel: +86-755-28780808
Corporate website: www.huawei.com

2. Corporate Structure
2.1 Organizational Structure
 The president of Huawei Technologies is Huawei’s founder Ren Zhengfei.
Together with Huawei’s chairwoman Sun Yafang, they have complete decision-
making powers of Huawei. Huawei’s Product Solutions Department is in charge of
manufacturing, R&D, and technical support and maintenance.

www.marketavenue.cn 3
COMPANY PROFILE

Figure 2-1: Huawei Organizational Chart

Ren Zhengfei
President

Sun Yafang
Chairwoman

Finance Human Adminstration Marketing Product Sales &


Dept. Resources & Operations Dept. Solutions Services

 Huawei’s Sales and Services Department employs around 7,500 employees


throughout China. The majority of sales are conducted directly through the
Sales & Services Department and the Marketing Department is therefore small
in size and in importance. Most of the sales are done on the provincial level by
provincial offices and sales teams. Staff is divided according to major clients
(China Mobile, China Netcom, China Telecom, and China Unicom). Sales support
staff, however, are organized by product type.

Figure 2-2: Huawei Sales & Services Department Organizational Chart


Marketing
Management
Committee

Domestic Market Cadre Engineering Market Research Overseas


Market Department Department Department Market

Product Channel Client Group Provincial Marketing Regional Product Marketing


Support Management Management Offices Coordination Ofiices Support

Mobile Telecom China China


Communications Product Agents Telecom Telecom

Optical Enterprise China China


Transport Networks Unicom Unicom

Access China China


Networks Netcom Netcom

Switching China China


Products Mobile Mobile

A Guide To Investment In China


Huawei’s Global Offices

 Huawei’s global market is divided into eight different zones that report directly
to the Marketing Management Committee:

4 www.marketavenue.cn
COMPANY PROFILE

Figure 2-3: Huawei’s Global Sales Regions


A Guide To Investment In China

– China (Headquartered in Shenzhen)


– Latin America (Headquartered in Brasilia, Brazil)
– North America (Futurewei subsidiary, headquartered in Plano, Texas)
– Asia Pacific (Headquartered in Kuala Lumpur, Malaysia)
– Europe (Headquartered in London, England)
– Southern Africa (Headquartered in Johannesburg, South Africa)
– Middle East and North Africa (Headquartered in Cairo, Egypt)
– Commonwealth of Independent States (Headquartered in Moscow, Russia and
includes the Central Asian Republics)
– East Pacific (Headquartered in Sydney, Australia and includes Australia, Hong
Kong, Macao, Taiwan, Japan, and Korea)
 A Huawei vice president heads each of Huawei’s eight regional headquarters.
The regional offices are organized by different product lines and have a technical
support department, and two departments in charge of client relations and
business development.

2.2 Financial Structure


 Huawei is very secretive about its financials and most information is kept
hidden from the public eye. Huawei’s stocks are unlisted and are owned by
both Huawei employees, presidents and Ren Zhengfei, however the ownership

www.marketavenue.cn 5
COMPANY PROFILE

breakdown is unclear and remains unknown to the public. Huawei employees


are given an option to purchase stocks when joining the company, and can buy
additional stock shares every year. These shares must be sold back to Huawei
upon retirement or when leaving the company and cannot be sold to outsiders.

2.3 Major Partnerships, JVs, and Alliances

1. 3Com-Huawei
 3Com and Huawei set up a joint venture in Hangzhou in November 2003.
Huawei owns 51% of the joint venture’s shares and 3Com the remaining 49%.
This joint venture operates in China and Japan under a united brand, while 3Com
and Huawei are branded separately in the rest of the world.
This joint venture enjoys Huawei’s strength in data communication products
and 3Com’s Japanese market resources and know-how. The 3Com-Huawei joint
venture earned revenues of USD 216 million in 2004, but had a net deficit of
USD 14.5 million.

2. TD Tech
 TD Tech was set up in February 2004 in Beijing, as a joint venture between
Huawei (49%) and Siemens (51%). TD Tech mainly conducts TD-SCDMA
research and employs approximately 600 staff. As of July 2005, TD Tech
announced that its TD-SCDMA system would be commercially ready by the third
quarter of 2005.
 Although the future of TD-SCDMA is somewhat unclear, TD Tech is one of the
best-positioned companies in this sector prior to China’s 3G launch. With the
combination of high quality R&D backed by Huawei and resources from Siemens,
MarketAvenue believes that TD Tech will play a key role in the TD-SCDMA
market.

A Guide To Investment In China


3. Other Alliances
Figure 2-4: Huawei Alliances

Partner Function

3G Handset Development together with


COSMOBIC Technology
NEC and Panasonic

Infineon Developing WCDMA handset platforms

6 www.marketavenue.cn
COMPANY PROFILE

Providing Huawei with FSON (Free


LightPoint
A Guide To Investment In China

Space Optical Network) products


Using each other’s market positions to
Marconi
leverage sales

SUNDAY Providing 3G services in Hong Kong

Developing 3G ASIC (Application-


Philips Semiconductor
Specific Integrated Circuit)

Texas Instruments R&D

Motorola R&D

Intel R&D

Microsoft R&D

SUN R&D

3 Market Analysis
3.1 Major Products
Figure 3-1: Huawei Technologies Product Lines

Wireles NGN Access Switching Optical Datacom Value Added Handsets Video
Network Networks Networks Networks Networks Service & OSS Communication

WCDMA Softswitches MSAN Softswitches NG-SDH Router SMS CDMA Handsets MCU
GPRS UMG IP DSLAM STP NG-SONET IP Switch MMS WCDMA Handsets Video Phones
GSM TMG ADSL Modems BITS DWDM VOIP CRBT Wireless Data Cards Video Conferencing
EDGE SG VDSL Modems MSTP WLAN LBS
CDMA2000 AMG WiFI VPN Billing
TD-SCDMA IAD BRAS CRM
SLTS
Call Centers

Wireless Network Products


HLR, CG, RNC, MSC/GMSC, SGSN, GGSN, Node B, GGSN, CGSN, CG, BSC

NGN Products
SoftX3000-Softswitch, UMG8900-Universal Media Gateway, SHLR-Smart HLR,
MRS6100-Media Resource Server, SG7000-Signaling Gateway, RM9000-Resource

www.marketavenue.cn 7
COMPANY PROFILE

Manager, UA5000-Intergrated Access Media Gateway, Eudemon 2000 Series-


Session Border Controller

Access Network Products


HONET UA5000 series, SmartAX MA5100 series ATM/IP compatible DSLAM,
SmartAX MA5300/5600 series IP DSLAM, SmartAX Mini DSLAM, SmartAX MT800
series, SmartAX MT900 series, SmartAX WA1003 series, SmartAX Outdoor B01D
Series, Quidway MA5200 series

Switching Network Products


C&C08EV, C&C08 STP, SYNLocK BITS

Optical Transmission Products


OptiX Series Products: OSN series and METRO series

Value Added Service Products


InfoX-SMS, infoX-MMS, infoX-WISG, infoX-Streaming, TELLIN-CRBT, TELLIN-
WIN, infoX-IMPS, infoX-LBS, infoX-Download, infoX-Gaming, infoX-AAA, infoX-
MDN, TELLIN-FIN, TELLIN ENIP

OSS Products
TopEng Billing System

Data Communication Products


Quidway NetEngine series, Quidway AR series, Quidway Series
BRAS, Access Server and Security Products

Video Communication Products


View Point series

3.2 Target Markets & Customers

A Guide To Investment In China


 Although China is still an important market for Huawei, the international
market is becoming more important. In 1H 2005, Huawei’s oversea sales have
exceeded the sales from domestic market for the first time.

 In China, Huawei’s main clients are the telecom operators and financial
institutions, as well as various other companies that maintain their own
networks. China Mobile, China Telecom, China Unicom, and China Netcom
are all major Huawei clients. Government institutions, oil companies such as
PetroChina, financial institutions such as China Commercial Bank, Industrial &
Commercial Bank of China, Bank of Communications, and the Ping An Insurance
Company are other main clients.

8 www.marketavenue.cn
COMPANY PROFILE

 In the international market, Huawei clients include British Telecom, ANTEL,
Royal KPM, OMANTEL, Tele2, Etisalat, and CoTeCal. However, Huawei mostly
A Guide To Investment In China

targets developing countries in Latin America, Africa, the Middle East, and the
former Soviet Union (CIS).

3.2.1 Major Competitors

3.2.1.1 Domestic Competitors

 In China, Huawei’s domestic competitors are UTStarcom, ZTE, FiberHome,


Datang, and Alcatel Shanghai Bell. ZTE and Alcatel Shanghai Bell are the most
important competitors in transmission, switching, and DSLAM.

Figure 3-2: Chinese Equipment Vendors’ Global Revenues, 2004 (USD M)

6000 5566

5000

4000

3000 2700 2651

2000

1000
187 145
0
Huawei UTStarcom ZTE FiberHome Harbour

3.2.1.2 International Competitors

 Leading international vendors, including Lucent, Alcatel, Nortel, Ericsson,


Motorola, Siemens, Nokia, and Cisco, are currently competing with Huawei in
both foreign markets as well as in China. Although Huawei’s global revenues are
lower than those of its key multinational rivals, Huawei is catching up quickly as
many competitors have seen little or no growth in recent years.

www.marketavenue.cn 9
COMPANY PROFILE

Figure 3-3: International Equipment Vendors’ Global Revenues, 2004


(USD B)

40
35.6
35
31.3
30

25

20 17.0
14.9
15
9.8 9.0
10
5.6
5

0
Nokia Motorola Ericsson Alcatel Nortel Lucent Huawei

 In the domestic market Huawei’s brand is as famous as the above international
vendors. Huawei holds a leading position, higher than that of Nokia, Siemens,
and Nortel, in China in several product lines such as optical transmission and
switching.

3.2.2 Sales and Market Share

 Huawei’s total sales have been increasing since 2002 and while domestic sales
are relatively stable, sales from international markets are expected continue to
grow steadily. Although MarketAvenue does not expect Huawei to make headway
in the North American market due to Huawei’s difficulty entering developed
markets, MarketAvenue believes that Huawei’s sales in Latin America, Africa and
other developing markets will continue to grow substantially.

Figure 3-4: Huawei Sales Contracts, 1999-2008 (USD B)


16

A Guide To Investment In China


14

12

10

0
1999 2000 2001 2002 2003 2004 2005E 2006F 2007F 2008F

Overseas Contracts Domestic Contracts

10 www.marketavenue.cn
COMPANY PROFILE

1999 2000 2001 2002 2003 2004 2005E 2006F 2007F 2008F
A Guide To Investment In China

Intl.
0.05 0.13 0.33 0.55 1.05 2.28 5.00 7.20 8.80 10.20
Contracts
Dom.
1.34 2.44 2.74 2.11 2.77 3.29 3.50 3.60 3.50 3.30
Contracts
Total
1.39 2.57 3.07 2.66 3.82 5.57 8.50 10.80 12.30 13.50
Contracts

 Huawei’s domestic revenues in the first half of 2005 are mostly from traditional
products like transmission and switching, accounting for more than two thirds of
its total revenue.

Figure 3-5: Huawei’s Domestic Sales by Product, 1H 2005 (%)

3.2.2.1 International Sales by Region

 In the international market, the bulk of Huawei’s sales are of wireless
equipment.

 In the first half of 2005, Huawei signed foreign contracts worth approximately
USD 2.47 billion, exceeding the total amount of foreign contracts in 2004, and
making up 61% of Huawei’s total contracts in 2005.

 Huawei’s international sales are mostly in developing countries. Almost half


of Huawei’s sales are from Africa and the Middle East and more than a third
are from Asia. Developed markets make up just 11% of revenues from foreign
markets.

www.marketavenue.cn 11
COMPANY PROFILE

Figure 3-6: Huawei International Sales by Region, 2004 (%)

3.2.2.2 International Sales by Product

Figure 3-7: Huawei International Sales by Product, 2004 (%)

A Guide To Investment In China

Unlike in the domestic market, mobile products (including GSM, CDMA,


WCDMA, and TD-SCDMA) contribute almost half of all Huawei’s foreign revenues;
switching products contribute less than a third. Transmission products face
tougher competition abroad than they do in the Chinese market and account for
less than ten percent of foreign revenues.

12 www.marketavenue.cn
COMPANY PROFILE

3.2.2.3 China Market Share by Product


Figure 3-8: Huawei China Access Market Share and Revenue, 2003 - 1H
A Guide To Investment In China

2005

Figure 3-9: Huawei China Transmission Market Share and Revenue, 2003
- 1H 2005

www.marketavenue.cn 13
COMPANY PROFILE

Figure 3-10: Huawei China Switching Market Share and Revenue, 2003 -
1H 2005


Figure 3-11: Huawei China DSLAM Market Share and Revenue, 2003 - 1H
2005

A Guide To Investment In China

14 www.marketavenue.cn
COMPANY PROFILE

Figure 3-12: Huawei China Data Communications Market Share and


A Guide To Investment In China

Revenue, 03 - 1H05

Figure 3-13: Huawei China GSM Equipment Market Share and Revenue,
2003 - 1H 2005

www.marketavenue.cn 15
COMPANY PROFILE

4. Human Resources and R&D

4.1 Human Resources

Figure 4-1: Huawei Employees, 1996-2005

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005F

 Between 1999 and 2001, almost 5,000 new employees joined Huawei each
year. At that period, Huawei hired many graduates from China’s top universities
such as Tsinghua and, Beijing University of Post and Communication. Most new
employees joined the R&D and sales departments. Huawei offered these new
graduates high salaries of approximately USD 750 to USD 1000 per month, a
very high salary in China in those years—particularly for recent college graduates
without work experience.

4.2 Research and Development

 Huawei has established and is continuously opening R&D centers both in A Guide To Investment In China
China as well as in international markets including the USA, Russia, India, and
Israel. Huawei is currently the largest investor in R&D in China, having invested
between nine percent and thirteen percent of its annual sales revenue into R&D
in recent years.

 Huawei’s research focuses on WCDMA, CDMA2000, NGN, intelligent optical


networks, SDH (10G/40G), DSL, backbone routers, as well as WLAN and WiMax.
Huawei has not made any significant investment in EDGE technology.

16 www.marketavenue.cn
COMPANY PROFILE

Figure 4-2: Huawei R&D Investment, 2001-2008 (USD M)


A Guide To Investment In China

1000 15.0%

830
800
9.7% 9.8%
8.6% 10.0%
600
481

400 371
5.0%

200

0 0.0%
2003 2004 2005E

R&D Investment R&D Ratio of Sales

Figure 4-3: Huawei R&D Investment by Product Line, 2004 (%)

www.marketavenue.cn 17
COMPANY PROFILE

5. Executive Summary
1. Huawei’s Low-cost Advantage

 Huawei’s main forte still remains its low cost advantage. With engineers,
R&D personnel, marketing staff, and sales people all costing a fraction of their
counterparts in developed countries; Huawei has been able to enter markets in
developing countries where price is of great importance. Although Huawei could
not have succeeded with a cost advantage alone, it is hard to believe it would
have succeeded internationally without it.

2. Managerial Practices...Still not a Multinational Company

 With the military background of its founder, Huawei still resembles a military
organization in some ways. Ren Zhengfei still runs Huawei in a very strict
and inflexible hierarchical structure. With branches opening up abroad and an
increasing number of foreign employees, this method of management is already
beginning to cause friction. A growing multinational company facing distinctly
different foreign markets and different customer needs to give more decision
power to their regional branches and local managers. Huawei is still run from the
top, and largely by one man.

 Huawei also faces serious questions about Ren Zhengfei’s successor. Ren
is well into his sixties now. However, the company does not have a board of
directors to select a new president. More over, while many of the vice presidents
are certainly capable in their current jobs, none is believed to have the ability
or backing to ensure a smooth succession. Thus the future of Huawei upon Ren’
s departure or death is unclear. Some industry experts believe that when Ren is
gone, the current companies may become more independent of one another and
possibly even split up completely.

3.3G Networks Abroad in Anticipation for 3G Licenses at Home

 As China’s telecom market awaits 3G license issuance, Huawei is currently A Guide To Investment In China
focused on winning 3G contracts abroad. The experience gained in these
networks is expected to improve its chances in winning major 3G contracts at
home; as is the fact that it has had success in foreign markets.

 Although foreign 3G markets are of great importance to Huawei MarketAvenue


expects Huawei’s main 3G market to be in China. MarketAvenue believes that
with its mature product lines, 3G deployment experience, and well-developed
relations with domestic operators, Huawei is well positioned for success in China’
s 3G market. Huawei is developing 3G products for all three major standards,

18 www.marketavenue.cn
COMPANY PROFILE

including TD-SCDMA. 3G products for the WCDMA and CDMA2000 standards


are already commercial and TD-SCDMA products developed by its TD Tech joint
A Guide To Investment In China

venture with Siemens performed well in recent MII tests.

4. Venturing Abroad

 Although much smaller than its competitors, Huawei won substantial market
shares in developing regions such as Africa, Asia Pacific, Latin America, and the
CIS. Huawei is now trying to enter the more lucrative and developed markets in
Europe and North America. Being selected for British Telecom’s 21CN project is
starting to make Huawei’s competitors nervous.

 Going abroad and entering the international market could not have been done
without the help of the Chinese government. In addition to ample financial
support from the government through low-interest loans the Chinese government
has also supplied financial aid to several developing countries in order to help
Huawei gain more contracts. This was especially the case in the African market.
We must not forget, however, that in developing countries where cost is a larger
issue than in Europe and North America, Huawei has found success through its
cost advantage over European and American vendors.

5. International Competition

Until recently, most international vendors did not regard Huawei as a threat.
Huawei’s target market of small developing countries helped it avoid too much
direct competition with multinational vendors. With Huawei trying to enter
the European markets, these international vendors are beginning to recognize
Huawei as a serious competitor.

Facing these international vendors in major markets will not be easy for
Huawei. Huawei’s cost advantage can only take it so far. Huawei will have
to compete with established brand names, companies with experienced
management, and extensive marketing and sales networks. Furthermore, in
some markets Huawei will be competing on these vendors’ home turf.

www.marketavenue.cn 19
ABOUT US

Beijing MarketAvenue Consulting Co., Ltd is proud to be the leading source


of Chinese business intelligence in the English language. Our multi-level and all-
round services include:

 ■industry news,
 ■company profiles,
 ■monthly analyses of important industries,
 ■comprehensive analytical reports on individual industries,
 ■customized reports tailored to meet clients’ needs

and other services that we will develop to meet the evolving needs of overseas
companies wishing to enter the Chinese market.

Product Introduction Our Advantages that give us our competitive edge:


  Utilizing abundant experience gained in
our many years of high-quality service in the ■Over six years’ experience in the consulting industry, a strong research and
consulting industry, MarketAvenue integrates the development ability, and an excellent track record for our strict quality control
databases of State Administration for Industry system;
and Commerce of China, Ministry of Commerce, ■Good relationships with government departments such as National Bureau of
industry associations and consulting companies to Statistics of China, Ministry of Commerce, Ministry of Information Industry and
create MACD (MarketAvenue Company Database) National Library of China;
which provides overseas clients with profiles of ■Comprehensive and extensive cooperation with over 40 industry associations
over 250,000 companies in China, including all and market research institutions;
the listed companies and covering every industry. ■Database of senior experts and industry analysts in the various industries;
To ensure that all the statistics in the database are ■A complete database of market research institutions, a database of the
efficient and reliable, MACD is updated once every corporations in individual industries, and a database of industry development;
year by adding information on about 40,000 new ■Integration and analysis of industrial information by professional and
companies and deleting entries for about 20,000 experienced industry analysts in MarketAvenue;
inoperative companies. ■Multinational cooperation which ensures the firmly Chinese background and
international perspective of our service.
 As the first step in understanding the competition
and finding partners for cooperation, MACD opens Staffed by professional consultants offering a comprehensive service,
the door to the huge market in China for you. MarketAvenue is committed to providing a solid foundation for your understanding
 For more infomation, please refer to: www. of China’s market.
marketavenue.cn/profile.asp.

MarketAvenue Consulting
Rm 1208, 12/F, Creative Bldg.
23 Weigongcun Ave.
Haidian District
Beijing 100085, China
Email: market@marketavenue.cn
www.marketavenue.cn

Вам также может понравиться