The Park Place Economist

Volume 27 Issue 1 Article 18

2019

The Real Huawei Story and the 5G Era

Chevy Luo Illinois Wesleyan University, [email protected]

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Recommended Citation Luo, Chevy (2019) "The Real Huawei Story and the 5G Era," The Park Place Economist: Vol. 27 Available at: https://digitalcommons.iwu.edu/parkplace/vol27/iss1/18

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Abstract Huawei Technologies Co., Ltd, a Chinese telecommunication technology company and the second largest telecommunication equipment company in the world by revenue, is about to become the largest and the leader in the newest 5G telecommunications era (Sin 2017). For the past year of 2018, Huawei has been reported widely in the media for the detainment of its CFO Meng Wanzhou, who is being suspected of stealing technology from United States companies and illegally trading devices to Iran. However, Huawei's true story of development remains unheard among the controversies and conspiracy theories around Meng's detainment. This article will not expand on those controversies but will use this opportunity to unveil Huawei's incredible path of growth, from being a marginal player to becoming one of today's frontier companies in the telecommunications industry, as well as how Huawei will impact the industry's future with its 5G technology.

This article is available in The Park Place Economist: https://digitalcommons.iwu.edu/parkplace/vol27/iss1/18 Luo

The Real Huawei Story and the 5G Era

Chevy Luo

Huawei Technologies Co., Ltd, a Chinese tele and trading the domestic market share for technol communication technology company and the sec ogy, China allowed international telecommunication Ǧ Ǧ ond largest telecommunication equipment company Ǧ infrastructures. Companies like Alcatel, Ericsson, ϐ‹”•–‘ϐ‹ŽŽ‹–Š‡‰ƒ’•‘ˆ–Š‡ƒ”‡–†—‡–‘‹–•™‡ƒ est and the leader in the newest 5G telecommunica ‹–Š‡™‘”Ž†„›”‡˜‡—‡ǡ‹•ƒ„‘—––‘„‡ ‘‡–Š‡Žƒ”‰Ǧ Ǧ ‘‹ƒǡ ‘–‘”‘Žƒǡ ƒ† ‘”–‡Ž ‡–‡”‡† Š‹ƒǯ• ƒ”Ǧ competition of advanced technologies, unlike other –‹‘•‡”ƒȋ‹ʹͲͳ͹ȌǤ ‘”–Š‡’ƒ•–›‡ƒ”‘ˆʹͲͳͺǡ —ƒǦ ‡–ƒ• –‡”ƒ–‹‘ƒŽ ‘‹–‡–—”‡•ȋ ȌǤ ƒ ‹‰‡™ ™‡‹Šƒ•„‡‡”‡’‘”–‡†™‹†‡Ž›‹–Š‡‡†‹ƒˆ‘”–Š‡ suspected of stealing technology from United States on importing foreign technology, Huawei decided †‡–ƒ‹‡–‘ˆ‹–• ‡‰ƒœŠ‘—ǡ™Š‘‹•„‡‹‰ Š‹‡•‡–‡Ž‡ ‘—‹ ƒ–‹‘ϐ‹”•™Š‘ Š‘•‡–‘”‡Ž› companies and illegally trading devices to Iran. How to develop a more complicated switch system on its ever, Huawei’s true story of development remains Ǧ unheard among the controversies and conspiracy come one of Huawei’s core strategies (Ahrens 2013). ‘™Ǥ ‡ ‡ǡ†‡˜‡Ž‘’‹‰‹–•‘™–‡ Š‘Ž‘‰›Šƒ•„‡Ǧ theories around Meng’s detainment. This article will

ͳͻͻ͵ǡ —ƒ™‡‹Žƒ— Š‡†‹–•ϐ‹”•–•‡ŽˆǦ†‡•‹‰‡† tract directly from the PLA. In the early 90s, due to ‘–‡š’ƒ†‘–Š‘•‡ ‘–”‘˜‡”•‹‡•„—–™‹ŽŽ—•‡–Š‹• ƬͲͺ”‘‰”ƒǦ‘–”‘ŽŽ‡†™‹– Šƒ†‰‘–ƒ ‘Ǧ the gaps in technology, the domestic market of China ‘’’‘”–—‹–› –‘ —˜‡‹Ž —ƒ™‡‹ǯ• ‹ ”‡†‹„Ž‡ ’ƒ–Š ‘ˆ one of today’s frontier companies in the telecommu ‰”‘™–Šǡˆ”‘„‡‹‰ƒƒ”‰‹ƒŽ’Žƒ›‡”–‘„‡ ‘‹‰ nications industry, as well as how Huawei will im government was a typical Chinese way of securing Ǧ ™ƒ•‘•–Ž›†‘‹ƒ–‡†„› •Ǥ‘–”ƒ –‹‰™‹–Š–Š‡ pact the industry’s future with its 5G technology. a foothold in the domestic market for the Chinese Ǧ

I. WINNING THE CHINESE MARKET ϐ‹”•ǤŠ‡ϐ‹”•– ‘–”ƒ –‘ˆˆ‡”‡†„›–Š‡‡ƒ„Ž‡† (1987-1996) —ƒ™‡‹ –‘ ‘–‹—‡ ‹–• Ƭ •’‡†‹‰ ‘ ‡–™‘” Ren Zhengfei, the founder and the current CEO Other than developing its own technology, Huawei –”ƒ•‹••‹‘ ƒ† ‘„‹Ž‡ ‘—‹ ƒ–‹‘ •›•–‡•Ǥ also targeted its sales on Chinese rural areas where most IJV ignored. Ren Zhengfei quoted Mao Zedong ‘ˆ —ƒ™‡‹ǡ”‡–‹”‡†ˆ”‘–Š‡Š‹‡•‡‡‘’Ž‡ǯ•‹„‡”ƒǦ Corporation in 1983. At the end of 1987, Ren started –‹‘”›ȋȌƒ†Œ‘‹‡†Š‡œŠ‡‘—–Š‡ƒ‹Ž –‘†‡• ”‹„‡Š‹••‡ŽŽ‹‰•–”ƒ–‡‰›ƒ•Dz•—””‘—†‹‰–Š‡ mestic market share of switch system had increased —ƒ™‡‹‡ Š‘Ž‘‰‹‡•‘Ǥǡ–†‹Š‡œŠ‡ƒ†„‡Ǧ ‹–› ™‹–Š –Š‡ ‘—–”›•‹†‡dzǤ › ͳͻͻ͸ǡ —ƒ™‡‹ǯ• †‘Ǧ technology (Ahrens 2013). In the 1990s, under Re to 20%, standing right next to the IJV Shanghai Bell. ‰ƒŠ‹•ϐ‹”•–’”‘Œ‡ –ǣ–Š‡–‡Ž‡ ‘—‹ ƒ–‹‘•™‹– Š Ǧ ˆ‘”Ǧƒ†Ǧ’‡‹‰Ǧ—’ǡ ™Š‹ Š ™ƒ• †‡•‹‰‡† –‘ —Ǧ  ›‡ƒ” „‡ˆ‘”‡ ƒ Š‹‡˜‹‰ –Š‹• ƒ ‘’Ž‹•Š‡– ‹ policies, including encouraging foreign investments in Shanghai. This move indicated Huawei’s success Ž‡ƒ•Š Š‹ƒǯ• †‡˜‡Ž‘’‡– ’‘–‡–‹ƒŽ „› ƒ •‡”‹‡• ‘ˆ ͳͻͻͷǡ —ƒ™‡‹Šƒ†‡•–ƒ„Ž‹•Š‡†ƒ‘–Š‡”Ƭ ‡–‡”

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market. Also, Huawei’s success in the domestic mar ƒ† ‘ϐ‹†‡ ‡‹–Š‡ ƒ’‹–ƒŽ‹œƒ–‹‘‘ˆ–Š‡†‘‡•–‹  ‘”‡†‡˜‡Ž‘’‹‰ ‘—–”‹‡•Ž‹‡Šƒ‹Žƒ†ǡ”ƒœ‹Žǡƒ† ket provided an example of a growth model for other Ǧ ‘—–Šˆ”‹ ƒǤ ”‘ʹͲͲ͵–‘ʹͲͲͷǡ —ƒ™‡‹Šƒ†•‡˜‡”Ǧ ƒŽ†‡ƒŽ•‹ Ž—†‹‰‘‡–Šƒ–™ƒ•™‘”–Š̈́ʹͲ‹ŽŽ‹‘‹ Š‹‡•‡ϐ‹”•ȋŠ”‡•ʹͲͳ͵ȌǤ –Š‹‘’‹ƒǡƒ†ƒ̈́ʹͲͲ‹ŽŽ‹‘ ‘†‡Ǧ†‹˜‹•‹‘—Ž–‹’Ž‡ II. EXPANDING TO INTERNATIONAL ƒ ‡••’”‘Œ‡ –‹‹‰‡”‹ƒȋ—‘ʹͲͲ͸ȌǤ MARKETS: COMPETITIVE PRICING AND marketing efforts in developed countries. As a new ʹͲͲͳ ™ƒ• ƒŽ•‘ ƒ •‹‰‹ϐ‹ ƒ– ›‡ƒ” ˆ‘” —ƒ™‡‹ǯ• CUSTOMER-ORIENTED ATTITUDE (1996-2006) Ǧ „‹‡ ‹ –Š‡ †‡˜‡Ž‘’‡† ƒ”‡–ǡ •–”ƒ–‡‰‹ ƒŽŽ›ǡ —ƒ™‡‹ market, Huawei started to put its eyes on interna ˆ–‡”„‡ ‘‹‰ƒƒŒ‘”’Žƒ›‡”‹–Š‡†‘‡•–‹  †‹†‘–•‹’Ž›–”ƒ•’Žƒ––Š‡Ž‘™Ǧ’”‹ ‹‰‘†‡Ž‹–‘ tional markets. However, expanding to international ented and especially paid attention to quality stan Ǧ †‡˜‡Ž‘’‡† ‘—–”‹‡•Ǥ – ™ƒ• „‡‹‰ ˜‡”› Ž‘ ƒŽŽ› ‘”‹Ǧ Ǧ ƒ”‡–•™ƒ• ‘•‹†‡”‡†‡ƒ”Ž›‹’‘••‹„Ž‡ˆ‘”Š‹Ǧ †ƒ”†•Ǥ ʹͲͲͳǡ —ƒ™‡‹ƒ†‡–Š‡ϐ‹”•–•ƒŽ‡•–‘ ‡”Ǧ station that complied with multiple communication ‡•‡ ϐ‹”• ‹ –Š‡ Žƒ–‡ ͻͲ• „‡ ƒ—•‡ ‘ˆ –Š‡ ‡‰ƒ–‹˜‡ ƒ›ƒ†–Š‡‡–Š‡”Žƒ†•„›‹–”‘†— ‹‰ƒ™‹”‡Ž‡•• standards. Huawei designed this station after no ‹’”‡••‹‘ ‘ ’‘‘”Ǧ“—ƒŽ‹–› Š‹‡•‡ ’”‘†— –• ƒ† –Š‡ ‘’‡–‹–‹‘ ˆ”‘ Ž‘ ƒŽ ϐ‹”• ƒ„”‘ƒ†Ǥ ‡ ‘‰Ǧ Ǧ ‹œ‹‰ –Š‘•‡†‹ˆϐ‹ —Ž–‹‡•ǡ‡ Š‡‰ˆ‡‹ ™ƒ”‡† –Šƒ– –‹ ‹‰–Š‡†‡ƒ†ˆ‘”‘”‡ ‘’ƒ –„ƒ•‡•–ƒ–‹‘• Š‹• ‘’ƒ›—•–„‡Dz‘ŽˆǦŽ‹‡dz‹‘”†‡”–‘ƒ˜‘‹† –Šƒ–ƒ”‡‡ƒ•‹‡”ƒ†‰”‡‡‡”–‘„‡‹•–ƒŽŽ‡†‹—”‘’‡ petitors (Ahrens 2013). Ren Zhengfei provided ex „‡‹‰Dz‡ƒ–‡dz„›–Š‡ƒ†˜ƒ ‡†ƒ†ƒ„‹–‹‘—• ‘Ǧ ȋ”‡‡” Ƭ ƒ‘ȌǤ Š‹• ‡šƒ’Ž‡ ”‡ϐŽ‡ –• —ƒ™‡‹ǯ• Ǧ —•–‘‡”Ǧϐ‹”•– ƒ––‹–—†‡Ǥ ‘”‡‘˜‡”ǡ ‹– ƒŽ•‘ ”‡ϐŽ‡ –• in targeting customers’ demands and executing its –”‡‡Ž› ‘’‡–‹–‹˜‡’”‹ ‡•–Šƒ– ‘—Ž†„‡ ‘•‹†‡”‡† –Š‡ ‡ˆϐ‹ ‹‡– ƒ† ϐŽ‡š‹„Ž‡ ƒƒ‰‡‡– ‘ˆ —ƒ™‡‹ ƒ‰‰”‡••‹˜‡ǡ ™Š‹Ž‡ ƒŽ•‘ ˆ‘”–‹ˆ›‹‰ ƒ Dz —•–‘‡”Ǧϐ‹”•–dz for cheaper prices, accordingly, Huawei offered very overtaken the most dominant IJV Shanghai Bell and ƒ––‹–—†‡‹Š‹• ‘’ƒ›Ǥ ‘”–Š‘•‡™Š‘™‡”‡Ž‘‘‹‰ ’Žƒ•Ǥ‘‡•–‹ ƒŽŽ›ǡ„›ʹͲͲʹǡ —ƒ™‡‹Šƒ†‘ˆϐ‹ ‹ƒŽŽ› low prices with nearly 30% off from its original sale nications. By the end of 2005, Huawei had had even ƒŽ•‘’ƒ••‡†‹• ‘„›ͳʹΨ‹‹–‡”‡–†ƒ–ƒ ‘—Ǧ rapport for the long run. This has helped Huawei ’”‹ ‡ƒ†‰‘‘†ƒˆ–‡”Ǧ•ƒŽ‡ —•–‘‡”•‡”˜‹ ‡•–‘„—‹Ž† ‘”‡‹ ‘‡ˆ”‘ƒ„”‘ƒ†–Šƒƒ›†‘‡•–‹ ’Žƒ›Ǧ credited to low prices and good customer service ”‡†— ‡–Š‡—„‡”‘ˆ ‘’‡–‹–‘”•‹‹–‡”ƒ–‹‘ƒŽ ‡”•ǤŠ‘•‡ƒ Š‹‡˜‡‡–•ǡŠ‘™‡˜‡”ǡ ‘—Ž†‘•–Ž›„‡ ƒ”‡–•ȋ ƒ”Š‘‘ƒ†ʹͲͲ͸ȌǤ Š‡ ϐ‹”•– ϐ‹˜‡ ›‡ƒ”• ‘ˆ —ƒ™‡‹ǯ• ‹–‡”ƒ–‹‘ƒŽ ȋ ƒ”Š‘‘ƒ†ʹͲͲ͸ȌǤ III. FROM “MADE IN CHINA” TO “INNOVATED ’—•Š™‡”‡”‘—‰Š™‹–Š‘Ž›̈́ͳʹǡͲͲͲ•ƒŽ‡•„—–™‹–Š services, Huawei was eventually rewarded. By 2001, IN CHINA” (2006-2016) ’‡”•‹•–‡ ‡‹‰‹˜‹‰Ž‘™’”‹ ‡•ƒ†‰‘‘†ƒˆ–‡”Ǧ•ƒŽ‡ Huawei’s sales of its switch system in Russia had in Ren Zhengfei knew that simply offering low pric

Ǧ Ǧ ”‡ƒ•‡†–‘̈́ͳͲͲ‹ŽŽ‹‘ȋ ƒ”Š‘‘ƒ†ʹͲͲ͸ȌǤ –Š‡ ‡•ƒ†’”‘†— –•™‘—Ž†‘–„‡•—•–ƒ‹ƒ„Ž‡ǡ‡•’‡ ‹ƒŽŽ› While providing its products to meet customers’ •ƒ‡›‡ƒ”ǡŠ‹ƒ‡–‡”‡†–Š‡‘”Ž†”ƒ†‡”‰ƒ‹œƒǦ ‹ƒ ‘’‡–‹–‹˜‡„—•‹‡••Ž‹‡–‡Ž‡ ‘—‹ ƒ–‹‘•Ǥ –‹‘ȋȌǡ‡ƒ„Ž‹‰–Š‡ ‘—–”›–‘Œ‘‹–Š‡‰Ž‘„ƒŽ up with new technological trends. According to the Žƒ„‘” ƒ† •—’’Ž‹‡• ‡–™‘”•Ǥ Ž‘‰ ™‹–Š –Š‡ ‰Ž‘Ǧ †‡ƒ†•ǡ —ƒ™‡‹ Šƒ• „‡‡ ‘•‹•–‡–Ž› ƒ– Š‹‰ „ƒŽ‹œƒ–‹‘‘ˆŠ‹ƒǯ•‡ ‘‘›ǡ —ƒ™‡‹ƒŽ•‘‡–‡”‡†

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Figure 2: Sales Growth of Huawei (rightmost) and other top international players in ‘’ƒ›ǯ•†‘ —‡–•ǡˆ”‘ʹͲͲ͵–‘ʹͲͲ͸ǡ —ƒ™‡‹ 2007-2011 ‡–‡”‡†–Š‡„—•‹‡••‘ˆ‘„‹Ž‡‡“—‹’‡–™‹–Šƒ•‡Ǧ ”‹‡•‘ˆ–‡ Š‘Ž‘‰‹ ƒŽ„”‡ƒ–Š”‘—‰Š•ǣ2003, July: partment —ƒ™‡‹‡•–ƒ„Ž‹•Š‡†‹–•Šƒ†•‡–†‡Ǧ 2004, February:

 —ƒ™‡‹‡šŠ‹„‹–‡†Š‹ƒǯ•ϐ‹”•– ‹†‡„ƒ†‘†‡‹˜‹•‹‘—Ž–‹’Ž‡ ‡••‘„‹Ž‡ 2005, June: ’Š‘‡ƒ––Š‡͵ ‘ˆ‡”‡ ‡‹ƒ‡•ǡ ”ƒ ‡ —ƒ™‡‹ǯ•ϐ‹”•–͵ ‘„‹Ž‡’Š‘‡ǡ–Š‡ the Charlton Media Group ͸ʹ͸ǡ™ƒ•ƒ™ƒ”†‡†–Š‡Ǯ‡•–͵ ƒ”–’Š‘‡ǯ„› 2006, June: Huawei launched the world’s fastest hurt Huawei’s sales growth, the company still main Ž–Š‘—‰Š–Š‡ϐ‹ƒ ‹ƒŽ ”‹•‹•ˆ”‘ʹͲͲ͹–‘ʹͲͳͲ Access USB Modem, the E220, in Singapore. ƒ†‘•– ‘’ƒ – ‹‰ŠǦ’‡‡†‘™Ž‹ƒ ‡– Ǧ –ƒ‹‡† –Š‡ ‰”‘™–Š ‹ Ƭ •’‡†‹‰ ƒ† †‡Ž‹˜‡”‡† Š‡•‡ „”‡ƒ–Š”‘—‰Š• ™‡”‡ Œ—•– –Š‡ „‡‰‹‹‰Ǥ • ‘–Š‡”–‡ Š‘Ž‘‰‹ ƒŽ„”‡ƒ–Š”‘—‰Š•ǣ2007: nology in its own house at its core after receiving ‡–‹‘‡† ‡ƒ”Ž‹‡”ǡ —ƒ™‡‹ ’—–• „—‹Ž†‹‰ –Š‡ –‡ ŠǦ —ƒ™‡‹ƒ Š‹‡˜‡†‰Ž‘„ƒŽ”‡ ‘‰‹–‹‘ˆ‘” ‹–•‘„‹Ž‡‹Ǧ ‹†‡•‹‰ǡ”‡ ‡‹˜‹‰–Š‡‡†‘– outperformed Shanghai Bell in the 90s. Huawei Design Award for the E172 „‡‡ϐ‹–• ˆ”‘ „—‹Ž†‹‰ ‹–• ‘™ •™‹– Š •›•–‡ ƒ† ‡•‹‰™ƒ”†ˆ‘”–Š‡ʹ͹Ͳǡƒ†–Š‡ ”‘†— – stayed with this strategy even during the economic 2008, November: Huawei E180 was named the

Figure”‡ ‡••‹‘ǡ™Š‹ Š ƒ„‡•‡‡ˆ”‘–Š‡ Šƒ”–„‡Ž‘™ǣ 1: R&D Spending of Huawei (rightmost) Dz‡•–‘„‹Ž‡”‘ƒ†„ƒ†”‘†— –dzƒ––Š‡•‹ƒ 2009, February: and other top international players in ‘„‹Ž‡™ƒ”†• droid smartphone and announced its cooper 2006-2011 —ƒ™‡‹†‡„—–‡†‹–•ϐ‹”•–Ǧ Ǧ gress in Spain ƒ–‹‘™‹–ŠǦ‘„‹Ž‡ƒ––Š‡‘„‹Ž‡‘”Ž†‘Ǧ 2010, August: Total shipments of Huawei’s mo

Ǧ units „‹Ž‡„”‘ƒ†„ƒ†’”‘†— –•”‡ƒ Š‡†ͳͲͲ‹ŽŽ‹‘ 2010, September:

 —ƒ™‡‹Žƒ— Š‡†‹–•ϐ‹”•– Dz dz•ƒ”–’Š‘‡™‹–Š ‘‘‰Ž‡ǯ•†”‘‹†ʹǤʹ 2011, August: ƒ––Š‡  ‘ˆ‡”‡ ‡‹ ‡”ƒ›Ǥ cial crisis from 2007 to 2010, Huawei’s sales growth ††‹–‹‘ƒŽŽ›ǡ†‡•’‹–‡‘ˆ•—ˆˆ‡”‹‰ˆ”‘–Š‡ϐ‹ƒǦ —ƒ™‡‹†‡„—–‡†‹–• Ž‘—†•‡”Ǧ remained positive and moved closer to those of the ˜‹ ‡ǡƒ†‹–”‘†— ‡†–Š‡™‘”Ž†ǯ•ϐ‹”•– Ž‘—†Ǧ‡Ǧ ƒ„Ž‡†•ƒ”–’Š‘‡ǡ —ƒ™‡‹‹•‹‘ȋ —ƒ™‡‹ȌǤAlong with the technological leaps, Huawei also innovated its own style of management which is ‰‹ƒ– ‹–‡”ƒ–‹‘ƒŽ ’Žƒ›‡”•Ǥ Š‹• ƒ „‡ •‡‡ ˆ”‘ –Š‡ˆ‘ŽŽ‘™‹‰ Šƒ”–ǣ The Park Place Economist, Volume XXVII

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er technology companies, Huawei does not issue ‹–‡”ƒŽŽ› ƒŽŽ‡† DzŠ‡ •‹Ž˜‡” Šƒ† —ˆˆdzǤŽ‹‡ ‘–ŠǦ ‡™•‹ʹͲͳ͸™ƒ•–Šƒ– —ƒ™‡‹Šƒ†‘˜‡”–ƒ‡’’Ž‡ common stocks. Instead, the shareholders of Hua  Ǥ™‹–Š–Š‡•‡ ‘†Žƒ”‰‡•–Ƭ•’‡†‹‰‡š––‘ Ǧ wei are Ren Zhengfei and his employees. Based on total of 74,307 patents and 48,758 of them were au Ǧ –‡Žȋ–ƒ–‹•–ƒʹͲͳ͸ȌǤ††‹–‹‘ƒŽŽ›ǡ —ƒ™‡‹”‡’‘”–‡†ƒ internal documents from Huawei, Ren Zhengfei Ǧ owns 1.4% of the total shares and the 82,471 em third next to Samsung Electronics Co Ltd and IBM –Š‘”‹œ‡†‘—–•‹†‡‘ˆŠ‹ƒǤŠ‹••–ƒ–‹•–‹ ƒŽ•‘”ƒ‡† Corp in 2017 (Huawei Technology Inc. 2017). Those Ǧ accomplishments indicated Huawei’s transforma ’Ž‘›‡‡•‘™–Š‡‘–Š‡”ͻͺǤ͸Ψȋ —ƒ™‡‹‡ Š‘Ž‘‰› rectly from company’s growth and thus were moti  Ǥ ʹͲͳͶȌǤ ƒ•‹ ƒŽŽ›ǡ‡’Ž‘›‡‡• ƒ „‡ ”‡™ƒ”† †‹Ǧ Ǧ Ǧ –‹‘ˆ”‘Dzƒ†‡‹Š‹ƒdz–‘Dz‹‘˜ƒ–‡†‹Š‹ƒdzǤ ˜ƒ–‡†ƒ–™‘”Ǥ‘”‡‘˜‡”ǡ ‡–”ƒŽ‹œ‹‰ƒŽŽ–Š‡•Šƒ”‡• Š‹Ž‡–Š‡™‘”Ž†™ƒ•ϐ‹ƒŽŽ›’ƒ›‹‰ƒ––‡–‹‘–‘–Š‹• ‹–‡”ƒŽŽ›ƒŽŽ‘™• —ƒ™‡‹–‘„‡ ‘•‹•–‡–‹‹–•Ž‘‰Ǧ ‘’ƒ›ǡ —ƒ™‡‹Šƒ†„‡‡”‡ƒ†›ˆ‘”ƒ‡™ Šƒ’–‡”Ǥ shareholders, which is commonly seen in companies IV. EMBRACING THE FUTURE: 5G NETWORK –‡”’Žƒ‹‰™‹–Š‘—––Š‡†‹•–—”„ƒ ‡ˆ”‘‘—–•‹†‡ issuing common stocks. Here, Huawei again sets an (2017- Present) other example for a model for management. While Ǧ ‘™ǡ–ƒ‹‰ƒŽ‘‘„ƒ ƒ––Š‡Žƒ•–†‡ ƒ†‡ǡ–Š‡ ‘•– ‘’ƒ‹‡•ˆƒ˜‘”†‡ ‡–”ƒŽ‹œ‹‰–Š‡‹”ƒƒ‰‡Ǧ ‘„‹Ž‡ †‡˜‹ ‡• ‹†—•–”› Šƒ• „‡‡ Šƒ‰‡† ‰”‡ƒ–Ž› companies like Apple, Samsung and Huawei. Some ”‹ƒŽ •–”— –—”‡ ˆ‘” „‡––‡” ˆ— –‹‘‹‰ ƒ† ϐ‹ƒ ‹‰ǡ †—‡–‘–Š‡†‡ Ž‹‡‘ˆ‰‹ƒ–•Ž‹‡‘‹ƒƒ†–Š‡”‹•‡‘ˆ sources and human power to accomplish its goals. may argue that every successful company is marked —ƒ™‡‹ǡ‘–Š‡ ‘–”ƒ”›ǡ‹•ƒ„Ž‡–‘‘„‹Ž‹œ‡ƒŽŽ”‡Ǧ its positive sales growth and research and develop –Š‡”™‹•‡ǡ‹–™‘—Ž†‘–Šƒ˜‡„‡‡ƒ„Ž‡–‘ƒ‹–ƒ‹ ™‹–Šƒ•‹‰ƒ–—”‡‘„‹Ž‡†‡˜‹ ‡Ǥ ǡ”ƒ–Š‡”ǡƒ”‰—‡–Šƒ– the newest generation of data communication and Ǧ –Š‘•‡ ‘„‹Ž‡ †‡˜‹ ‡• ƒ”‡ –Š‡ ϐ‹ƒŽ‹œ‡† ’”‘†— –• ‘ˆ technology designs. The newer one emerges as a Figure‡–•’‡†‹‰†—”‹‰ϐ‹ƒ ‹ƒŽ ”‹•‹•‹ʹͲͳͲǤ 3: Huawei’s R&D Spending (2012-2016)

„‹‰‰‡”’‹ –—”‡–Šƒ–Š‡Žƒ•–ǣ’”‘†— –•ƒ”‡–Š‡ ƒ””‹Ǧ ‡”‘ˆ ‘ ‡’–•„—––‡ Š‘Ž‘‰›Šƒ•ƒŽ”‡ƒ†›–ƒ‡‘ˆˆǤ ‹ ‡–Š‡‘„‹Ž‡†‡˜‹ ‡‹†—•–”›‹•‡š’‡”‹‡ ‹‰ƒ ous leader as of now, the one who offers the solution —’”‡ ‡†‡–‡†‘—–Ž‘‘™Š‡”‡–Š‡”‡‹•‘‘‡‘„˜‹Ǧ for the next generation’s telecommunication needs

is the upcoming 5G era. As IEEE Spectrum ™‹ŽŽ„‡–Š‡Ž‡ƒ†‡”ǤŠ‡‘•–’‘’—Žƒ”–‘’‹ ”‹‰Š–‘™ compared to our 4G, 5G telecommunications has †‡• ”‹„‡•ǡ

ˆ ™‡ •ƒ› –Šƒ– –Š‡ ϐ‹ƒ ‹ƒŽ ”‹•‹• ‹ ʹͲͳͲ ™ƒ• A. Millimeter Wave. Millimeter waves use high industry, then Huawei was one of the unicorns that „‡‡ˆ‘”‡ ƒ•–‡†–‘Šƒ˜‡–Š‡•‡ƒ––”‹„—–‡••‘ˆƒ”ǣ ƒ ‡Ž‹‹ƒ–‹‘ •Š—ˆϐŽ‡ ˆ‘” –Š‡ –‡Ž‡ ‘—‹ ƒ–‹‘• er frequencies than the radio waves commonly used Ǧ

•–ƒ›‡†ƒŽ‹˜‡ƒ†„‡ ƒ‡—•–‘’’ƒ„Ž‡Ǥ••Š‘™„› spending had reached a historical peak with equiva ˆ‘”‘„‹Ž‡’Š‘‡•ǤŠ‡› ƒ‹ ”‡ƒ•‡™‹”‡Ž‡••‡–Ǧ –Š‡ϐ‹‰—”‡͵ƒ„‘˜‡ǡ„›–Š‡‡†‘ˆʹͲͳ͸ǡ —ƒ™‡‹ǯ•Ƭ B. Small Cells ™‘”•ǯ•‡”˜‹ ‡•’‡‡†ƒ†•–ƒ„‹Ž‹œ‡–Š‡•‡”˜‹ ‡Ǥ Ǧ ǤƒŽŽ ‡ŽŽ•ƒ”‡’‘”–ƒ„Ž‡‹‹ƒ–—”‡ Ž‡–Ž›ͳͳǡ͹͹ͷǤ͹ͻ‹ŽŽ‹‘†‘ŽŽƒ”•Ǥ‘–Š‡”•‹‰‹ϐ‹ ƒ– The Park Place Economist, Volume XXVII

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to the limited length of the article, only a few salient or so throughout cities. Thousands of these stations „ƒ•‡•–ƒ–‹‘•–Šƒ– ƒ„‡’Žƒ ‡†‡˜‡”›ʹͷͲ‡–‡”• can prevent signaling from failing. ƒ––”‹„—–‡•‘ˆ —ƒ™‡‹ǯ•ƒƒ‰‡‡–ƒ”‡‹–”‘†— ‡† C. Massive MIMO. ƒ†ƒƒŽ›œ‡†Ǥ‡˜‡”–Š‡Ž‡••ǡ–Š‘•‡ƒ––”‹„—–‡•†‡‡’Ž› as the most important assets and putting technolog  •–ƒ†•ˆ‘”—Ž–‹’Ž‡Ǧ‹Ǧ ”‡ϐŽ‡ – —ƒ™‡‹ǯ• ’Š‹Ž‘•‘’Š› ‘ˆ –”‡ƒ–‹‰ ‡’Ž‘›‡‡• and receive signals from many more users at once, ’—– —Ž–‹’Ž‡ ‘—–’—–Ǥ ͷ  „ƒ•‡ •–ƒ–‹‘• ‘—Ž† •‡† Ǧ Other than the uniqueness of its culture, Huawei ‹ ƒŽ†‡˜‡Ž‘’‡–ƒ––‘’’”‹‘”‹–›‘˜‡”ϐ‹ƒ ‹‰Ǥ tor of 22 or greater. ‹ ”‡ƒ•‹‰–Š‡ ƒ’ƒ ‹–›‘ˆ‘„‹Ž‡‡–™‘”•„›ƒˆƒ Ǧ D. Beam Forming. It reduces communication in •Šƒ”‡•ƒ•‹‹Žƒ”ƒ––”‹„—–‡•‡‡‹‘–Š‡”–‡Ž‡ ‘—Ǧ Ǧ ‹ ƒ–‹‘•‰‹ƒ–•Ž‹‡ƒ•—‰ƒ†’’Ž‡ǣ–Š‡›ƒŽŽ’—– ation and the technology, there are several ways for –‡”ˆ‡”‡ ‡ˆ‘”‡ƒ”„›—•‡”•Ǥ‡’‡†‹‰‘–Š‡•‹–—Ǧ ƒ‡’Šƒ•‹•‘„—‹Ž†‹‰–‡ Š‘Ž‘‰‹‡•‹–Š‡‹”‘™ 5G networks to implement it. Š‘—•‡•ǤŠ‹•‹†‡ƒ‹•˜‡”›‡ƒ•›–‘—†‡”•–ƒ†„—– ƒ E. Full Duplex. dure the loss of certain portions of sales and get al „‡Šƒ”†–‘”‡ƒŽ‹œ‡ǡƒ•‹–‡ƒ•ƒ ‘’ƒ›—•–‡Ǧ ‹–Šͷ ǡ‹– ‘—Ž††‘—„Ž‡–Š‡•’‡‡† Ǧ ‘ˆ ‘—‹ ƒ–‹‘ƒ†–Š‡‡ˆϐ‹ ‹‡ ›Ǥ ‘•–œ‡”‘”‡–—”•ˆ‘”–Š‡•Š‘”–”—Ǥ Š‘•‡ϐ‹˜‡‡Ž‡‡–•‹•‘ˆƒ”Šƒ˜‡ƒ†‡—’–Š‡ͷ  •–ƒ†ƒ”†•Ǥ‡ ‘‰‹œ‹‰–Š‹•ǡ•‘‡ ‘’ƒ‹‡•‹–Š‡ race. So, where is Huawei’s position now? How far –‡Ž‡ ‘—‹ ƒ–‹‘• ‹†—•–”› Šƒ˜‡ ‹‹–‹ƒŽ‹œ‡† –Š‡ can it go? The two charts in the Appendix show that prepared Huawei for the next 5G era, with its techni ͵ͳ›‡ƒ”•‘ˆ‹ ”‡†‹„Ž‡‰”‘™–Šƒ††‡˜‡Ž‘’‡–Šƒ˜‡ Ǧ ƒŽ ‘–”‹„—–‹‘•–‘–Š‡ͷ –‡ Š‘Ž‘‰›ƒ†–Š‡• ƒŽ‡ ‘ˆ‹–•‹ˆ”ƒ•–”— –—”‡•Ǥ‡ƒ”‡›‡–ƒ„Ž‡–‘’”‡†‹ ––Š‡ future. ˆ—–—”‡„—–‹•‘ˆƒ”ǡ —ƒ™‡‹‹•”‡ƒ†›–‘‡„”ƒ ‡–Š‡

V. CONCLUSION This article has not covered all of Huawei’s sto ries. Their accomplishments speak louder than Ǧ

™‘”†•Ǥ͵ͳƒ„‘˜‡›‡ƒ”•‘ˆ —ƒ™‡‹ǯ•‰”‘™–ŠŽ‡†•ƒ Ž‡•–‘Š‹ƒ–‘‘„•‡”˜‡ƒ„‹‰‰‡”’‹ –—”‡‘ˆ‡ ‘‘Ǧ ‹ †‡˜‡Ž‘’‡–‘ˆ–Š‡‡š–‰‡‡”ƒ–‹‘ǣˆ”‘‰”‘™–Š to innovating. ™‹–Š“—ƒ–‹–›–‘‰”‘™–Š™‹–Š“—ƒŽ‹–›Ǣˆ”‘ˆ‘ŽŽ‘™‹‰ Based on Huawei’s transformation, we can see a unique culture of the company as a technology ven

Ǧ †‘” ‹ ™Š‹ Š Ž‘‰Ǧ–‡” ’Žƒ‹‰ǡ †‡†‹ ƒ–‹‘ǡ ƒ† †‘™Ǧ–‘Ǧ‡ƒ”–Š†‡ ‹•‹‘ƒ‹‰ƒ”‡ —Ž–‹˜ƒ–‡†Ǥ—‡

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APPENDIX Figure 14:

Figure 25:

Sources: Statista

The Park Place Economist, Volume XXVII

77 Luo

REFERENCES “ϱ'^ƚĂŶĚĂƌĚŽŶƚƌŝďƵƟŽŶƐďLJŽŵƉĂŶLJtŽƌůĚǁŝĚĞϮϬϭϴ ĐŽŵͬƐƚĂƟƐƟĐƐͬϱϰϬϳϱϬͬŝƚͲŶĞƚǁŽƌŬͲŵĂƌŬĞƚͲƐŚĂƌĞͲďLJͲǀĞŶͲ ͮ^ƚĂƟƐƟĐ͘͟^ƚĂƟƐƚĂ͘ĐĐĞƐƐĞĚDĂƌĐŚϮϬ͕ϮϬϭϵ͘ŚƩƉ͗ͬͬ ĚŽƌͬ͘ ǁǁǁ͘ƐƚĂƟƐƚĂ͘ĐŽŵͬƐƚĂƟƐƟĐƐͬϵϲϮϰϰϳͬϱŐͲƐƚĂŶĚĂƌĚͲĐŽŶƚƌŝͲ ^ŝŶ͕ĞŶ͘͞,Žǁ,ƵĂǁĞŝ/Ɛ>ĞĂĚŝŶŐϱŐĞǀĞůŽƉŵĞŶƚ͘͟&ŽƌďĞƐ͘ ďƵƟŽŶƐͲǁŽƌůĚǁŝĚĞͲďLJͲĐŽŵƉĂŶLJͬ͘ ƉƌŝůϮϴ͕ϮϬϭϳ͘ĐĐĞƐƐĞĚDĂƌĐŚϭϵ͕ϮϬϭϵ͘ŚƩƉƐ͗ͬͬ ͞ďŽƵƚhƐ͘͟ĐĐĞƐƐĞĚDĂƌĐŚϲ͕ϮϬϭϵ͘ŚƩƉƐ͗ͬͬǁǁǁͲĮůĞ͘ŚƵĂͲ ǁǁǁ͘ĨŽƌďĞƐ͘ĐŽŵͬƐŝƚĞƐͬďĞŶƐŝŶͬϮϬϭϳͬϬϰͬϮϴͬǁŚĂƚͲŝƐͲ ǁĞŝ͘ĐŽŵͬͲͬŵĞĚŝĂͬĐŽƌƉŽƌĂƚĞͬƉĚĨͬĂŶŶƵĂůͲƌĞƉŽƌƚͬĂŶŶƵͲ ϱŐͲĂŶĚͲǁŚŽƐͲůĞĂĚŝŶŐͲƚŚĞͲǁĂLJͲŝŶͲĚĞǀĞůŽƉŵĞŶƚͬηϲϭϱĂͲ ĂůͺƌĞƉŽƌƚϮϬϭϳͺĞŶ͘ƉĚĨ͘ ĐĞĂϱϮϲϵϭ͘ ͞ďŽƵƚhƐ͘͟ďŽƵƚ,ƵĂǁĞŝͮKƵƌ,ŝƐƚŽƌLJ͕,ĞƌŝƚĂŐĞΘtŚŽ ͞dŽƉdĞĐŚ,ĂƌĚǁĂƌĞͬĞƋƵŝƉŵĞŶƚZΘ/ŶǀĞƐƚŽƌƐ'ůŽďĂůůLJ tĞƌĞͮͮ,ht/'ůŽďĂů͘&ĞďƌƵĂƌLJϮϴ͕ϮϬϭϵ͘ĐͲ ϮϬϭϲͮ^ƚĂƟƐƟĐ͘͟^ƚĂƟƐƚĂ͘ĐĐĞƐƐĞĚDĂƌĐŚϮϬ͕ϮϬϭϵ͘ ĐĞƐƐĞĚDĂƌĐŚϲ͕ϮϬϭϵ͘ŚƩƉƐ͗ͬͬĐŽŶƐƵŵĞƌ͘ŚƵĂǁĞŝ͘ĐŽŵͬ ŚƩƉ͗ͬͬǁǁǁ͘ƐƚĂƟƐƚĂ͘ĐŽŵͬƐƚĂƟƐƟĐƐͬϳϯϴϲϯϮͬǁŽƌůĚͲ ĞŶͬĂďŽƵƚͲƵƐͬ͘ ǁŝĚĞͲƌĞƐĞĂƌĐŚͲĂŶĚͲĚĞǀĞůŽƉŵĞŶƚͲƚĞĐŚŶŽůŽŐLJͲŚĂƌĚͲ ŚƌĞŶƐ͕EĂƚŚĂŶŝĞů͘͞ŚŝŶĂ͛ƐŽŵƉĞƟƟǀĞŶĞƐƐ͗DLJƚŚ͕ZĞĂůŝƚLJ͕ ǁĂƌĞͲĂŶĚͲĞƋƵŝƉŵĞŶƚͲŝŶǀĞƐƚŽƌƐͬ͘ ĂŶĚ>ĞƐƐŽŶƐĨŽƌhŶŝƚĞĚ^ƚĂƚĞƐĂŶĚ:ĂƉĂŶ͘͟ZĞƉŽƌƚŽĨ ƚŚĞ^/^,ŝůůƐWƌŽŐƌĂŵŝŶ'ŽǀĞƌŶĂŶĐĞ͕&ĞďƌƵĂƌLJϮϬϭϯ͘ &ĞďƌƵĂƌLJϮϬϭϯ͘ĐĐĞƐƐĞĚDĂƌĐŚϱ͕ϮϬϭϵ͘ŚƩƉƐ͗ͬͬǁǁǁ͘ ĐƐŝƐͲƉƌŽĚ͘Ɛϯ͘ĂŵĂnjŽŶĂǁƐ͘ĐŽŵͬƐϯĨƐͲƉƵďůŝĐͬůĞŐĂĐLJͺĮůĞƐͬ ĮůĞƐͬƉƵďůŝĐĂƟŽŶͬϭϯϬϮϭϱͺĐŽŵƉĞƟƟǀĞŶĞƐƐͺ,ƵĂǁĞŝͺĐĂƐͲ ĞƐƚƵĚLJͺtĞď͘ƉĚĨ͘ ůĂƌŬĞ͕<ƌŝƐƚĞŶ͕ĂŶĚŵLJEŽƌĚƌƵŵ͘͞ǀĞƌLJƚŚŝŶŐzŽƵEĞĞĚ ƚŽ<ŶŽǁďŽƵƚϱ'͘͟/^ƉĞĐƚƌƵŵ͗dĞĐŚŶŽůŽŐLJ͕ŶŐŝͲ ŶĞĞƌŝŶŐ͕ĂŶĚ^ĐŝĞŶĐĞEĞǁƐ͕/^ƉĞĐƚƌƵŵ͕:ĂŶƵĂƌLJϮϳ͕ ϮϬϭϳ͘ĐĐĞƐƐĞĚDĂƌĐŚϲ͕ϮϬϭϵ͘ǁǁǁ͘ƐƉĞĐƚƌƵŵ͘ŝĞĞĞ͘ ŽƌŐͬǀŝĚĞŽͬƚĞůĞĐŽŵͬǁŝƌĞůĞƐƐͬĞǀĞƌLJƚŚŝŶŐͲLJŽƵͲŶĞĞĚͲƚŽͲ ŬŶŽǁͲĂďŽƵƚͲϱŐ͘ ƌĞŵĞƌ͕ĂǀŝĚĞ͕ĂŶĚdĂŽdŝĂŶ͘͞,ƵĂǁĞŝ͛ƐƵůƚƵƌĞ/ƐƚŚĞ<ĞLJ ƚŽ/ƚƐ^ƵĐĐĞƐƐ͘͟:ƵŶĞϭϭ͕ϮϬϭϱ͘ĐĐĞƐƐĞĚDĂƌĐŚϱ͕ϮϬϭϵ͘ Śďƌ͘ŽƌŐͬϮϬϭϱͬϬϲͬŚƵĂǁĞŝƐͲĐƵůƚƵƌĞͲŝƐͲƚŚĞͲŬĞLJͲƚŽͲŝƚƐͲƐƵĐͲ ĐĞƐƐ͘ &ĂƌŚŽŽŵĂŶĚ͕ůŝ͕ĂŶĚWŚŽĞďĞ,Ž͘͞,ƵĂǁĞŝ͗ŝƐĐŽ͛ƐŚŝŶĞƐĞ ŚĂůůĞŶŐĞƌ͘͟^ĞƉƚĞŵďĞƌϮϬϬϲ͘ ͞'ůŽďĂůDŽďŝůĞdĞůĞĐŽŵ/ŶĨƌĂƐƚƌƵĐƚƵƌĞ^ŚĂƌĞϮϬϭϳͮ^ƚĂƟƐͲ ƟĐ͘͟^ƚĂƟƐƚĂ͘ĐĐĞƐƐĞĚDĂƌĐŚϮϬ͕ϮϬϭϵ͘ŚƩƉ͗ͬͬǁǁǁ͘ ƐƚĂƟƐƚĂ͘ĐŽŵͬƐƚĂƟƐƟĐƐͬϱϮϲϬϯϳͬŐůŽďĂůͲƚĞůĞĐŽŵͲĞƋƵŝƉͲ ŵĞŶƚͲŵĂƌŬĞƚͲƐŚĂƌĞͬ͘ ͞'ůŽďĂů^ŵĂƌƚƉŚŽŶĞDĂƌŬĞƚ^ŚĂƌĞϮϬϭϴ͘͟^ƚĂƟƐƚĂ͘ĐĐĞƐƐĞĚ DĂƌĐŚϮϬ͕ϮϬϭϵ͘ŚƩƉ͗ͬͬǁǁǁ͘ƐƚĂƟƐƚĂ͘ĐŽŵͬƐƚĂƟƐͲ ƟĐƐͬϮϳϭϰϵϲͬŐůŽďĂůͲŵĂƌŬĞƚͲƐŚĂƌĞͲŚĞůĚͲďLJͲƐŵĂƌƚƉŚŽŶĞͲ ǀĞŶĚŽƌƐͲƐŝŶĐĞͲϰƚŚͲƋƵĂƌƚĞƌͲϮϬϬϵͬ͘ ͞,ƵĂǁĞŝ͗ZΘĐƟǀŝƚLJ^ƉĞŶĚŝŶŐϮϬϭϮͲϮϬϭϲͮ^ƚĂƟƐƟĐ͘͟ ^ƚĂƟƐƚĂ͘ĐĐĞƐƐĞĚDĂƌĐŚϱ͕ϮϬϭϵ͘ŚƩƉ͗ͬͬǁǁǁ͘ƐƚĂƟƐƚĂ͘ ĐŽŵͬƐƚĂƟƐƟĐƐͬϱϲϲϮϲϲͬŚƵĂǁĞŝͲƌĞƐĞĂƌĐŚͲĂŶĚͲĚĞǀĞůŽƉͲ ŵĞŶƚͲƐƉĞŶĚŝŶŐͬ͘ <ƵŽ͕<ĂŝƐĞƌ͘͞ůĐĂƚĞůͬ,ƵĂǁĞŝͬdͲŚŝŶĂWƵƌƐƵĞƐĨƌŝĐĂ ĞĂůƐ͘͟EŽŬŝĂ^ŝĞŵĞŶƐEĞƚǁŽƌŬƐ͘ĞĐĞŵďĞƌϭϭ͕ϮϬϬϲ͘ ĐĐĞƐƐĞĚDĂƌĐŚϭϵ͕ϮϬϭϵ͘ŚƩƉƐ͗ͬͬǁǁǁ͘ƐŝĞŵĞŶƐ͘ďĞͬ ĐŵĐͬŶĞǁƐůĞƩĞƌƐͬŝŶĚĞdž͘ĂƐƉdž͍ŝĚсϭϯͲϲϮϭ͘ ͞DĂƌŬĞƚ^ŚĂƌĞŽĨ/ƚEĞƚǁŽƌŬsĞŶĚŽƌƐĨƌŽŵϮϬϭϱƚŽϮϬϭϴ͘͟ ^ƚĂƟƐƚĂ͘ĐĐĞƐƐĞĚDĂƌĐŚϰ͕ϮϬϭϵ͘ŚƩƉƐ͗ͬͬǁǁǁ͘ƐƚĂƟƐƚĂ͘

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