In 1999, Huawei organized research on wireless local phone technology, but at that time Huawei executives believed that this technology had no future and eventually withdrew the relevant research. However, in 2000, when Zhejiang Yuhang Telecommunications Bureau was the first in China to convert wireless local phone technology into PHS network, the development of the latter was out of control.
Huawei, which has always been known for its foresight, lost this development opportunity. Huawei's local competitor ZTE was able to share the market with UTStarcom. In 2001, PHS sales reached 2.396 billion yuan, and its profits accounted for 25.74% of the total profits that year. At this time, Huawei was already regretting it.
The other is that in the research and development of 3G, Huawei has placed its bets on WCDMA, the continuation product of GMS. China Unicom ultimately adopted a CDMA network to transition to 3G, causing Huawei to lose out in two rounds of China Unicom's CDMA bidding. ZTE won the bid twice and received at least an order worth more than a billion yuan.
Internal reasons
Compared with ZTE, Huawei's predicament in 2002 was obvious.
ZTE's sales in 2001 were 9.1 billion yuan, and from 2002 to the third quarter, sales were 6.1 billion yuan and 170 million yuan. According to this estimate, the performance will be the same as in 2001. An internal information from Huawei shows that as of July 2002, Huawei's sales were close to 10 billion yuan, and domestic sales dropped by more than 10% year-on-year.
"It is difficult to start a business, but it is difficult to maintain a success." This is a sentence in "Spring in the Northland". Ren Zhengfei admitted that Huawei's past successes had more to do with opportunities. He once said: "Huawei grew during the period when the global information industry was developing the fastest, especially when China was transforming from a backward network into a world-class advanced network. Huawei is like a leaf. , I was lucky enough to fall on the big boat of this trend, and I just stayed on the big boat and drifted with the tide until today."
Judging from the loss of the PHS and CDMA2000 markets, this judgment is quite reasonable, but apart from opportunities, Huawei The internal factors are also worth pondering.
As early as 1996, a management expert familiar with Huawei pointed out that Huawei only has cleverness, not "muscle." In other words, Huawei is weak both in terms of corporate strength and scientific management system.
In terms of personnel management, Huawei has recruited 1,000 to 2,000 people from universities across the country every year in the past six years. At its peak in 1999, it was said that there were six to seven thousand people. There has been a rumor circulating in the industry that Huawei recruits from a well-known university, "all engineering master's students are required, and all the top ten undergraduates are required."
In order to make full use of these human resources, Huawei has been hiring the School of Labor and Human Resources of Renmin University of China, which was the earliest in China to study Western labor and personnel systems, as a "consultant." Peng Jianfeng, a professor at the school, once served as Huawei's top human resources officer. But even when Huawei was at its peak, there were still many people switching jobs from Huawei. Former Huawei Vice President Li Yinan even set up a separate company to "tit for tat" with Huawei in many fields.
Therefore, some people have always suspected that Ren Zhengfei proposed the "Huawei Company Basic Law" in 1997 and continuously introduced a series of management systems, but he did not truly transform Huawei into an enterprise with scientific decision-making and transparent processes.
Is the "cotton coat" thick enough?
In order to avoid risks, Ren Zhengfei decided to let Huawei go overseas, hoping to relieve the pressure on the domestic market through overseas markets.
In June 2002, Huawei claimed that its TELLIN intelligent network system won the bid for Russia's Lower New Town Telecom and Azerbaijan's Baku Telecom intelligent network projects at the Moscow Communications Exhibition. At the same time, Huawei announced that its overseas sales increased significantly by 210% in the first half of 2002, and it is expected that the annual sales growth in overseas markets will be more than twice that of 2001. In the Japanese market that Huawei is most interested in, Huawei is preparing to cooperate with Japanese company Kanematsu to form a sales alliance to sell routers, network switches and other equipment in Japan.
Of course, Huawei’s influence is still in the Asian market, and it will take quite a long time to reach the United States.
No one knows to what extent overseas markets can save Huawei from its downward trend. At least in overseas markets, Huawei can no longer use the "human sea tactics" and "interpersonal relations tactics" that are common in its domestic market sales. As a result, its sales capabilities are greatly reduced. This is still an estimate of Huawei's 2002 sales. $3 billion is incomprehensible to US analysts.
Ren Zhengfei once said: "There will always be winter for Huawei. It is better to prepare cotton-padded clothes than not to prepare at all." It should be said that Huawei has been preparing "cotton-padded clothes" before the arrival of "winter", but "cotton-padded clothes" can Whether it can truly keep out the cold is hard to say.
Local benefits
“In the past, if you want to become an international manufacturer, you must occupy the US market, but now, if you want to become an international manufacturer, you must occupy the Chinese market "This is the common view in the industry now. In fact, today's China is not only the place with the fastest growing demand for network equipment in the world, but also becoming the world's largest network equipment supply base after North America. For domestic network manufacturers, the next few years will be the most intense years of competition and the best time to quickly establish their position.
Huawei obviously has a clear understanding of this: if domestic manufacturers want to surpass foreign manufacturers in the competition, they must work more on the three words "localization". However, this kind of differentiation must first be based on compliance with mainstream technical standards. Taking products as an example, we must first ensure the performance and stability of the equipment, and then on this basis, develop the special business needs of domestic users. Only in this way can we reflect our localized competitiveness. In this regard, Huawei has achieved quite good results.
Ding Guoping, director of the Science and Technology Communications Division of the Shanxi Provincial Public Security Department, told reporters that the main reason why Huawei's products were finally selected was that Huawei could do value-added development for some of their special business needs. In fact, if we look at technical strength alone, some foreign manufacturers can also do this. However, the products of these multinational companies are basically developed for the global market. Although they also attach great importance to the Chinese market, after all, this This market only accounts for a small part of their overall share. From a cost perspective, it is impossible to develop business adaptability to the special needs of domestic users. This is the advantage of Huawei and other domestic companies based in the local market. In fact, in foreign markets, Huawei sells standardized products.
According to Huawei, “As an advocate of manageable networks, Huawei has made end-to-end management technologies for network management, user management, and business management a key technology to comprehensively support network services and promote the comprehensive development of IP networks. Transform to a manageable model to meet business development needs. We can provide solutions to meet different business needs for operators, governments, education, industry and enterprise networks, and provide a full range of cost-effective routers, Ethernet switches, security and business systems. products, taking the leading position in the Quidway NetEngine 40/80 fifth-generation core router that meets the needs of backbone network business development. These achievements are achieved on a solid basis."
In the Network Technology Forum. A netizen I met online also mentioned, “Huawei pays great attention to improving some details to meet the needs of domestic users. For example, the configuration and debugging interface can be switched between Chinese and English, so that Chinese users no longer have to face a lot of There are no English professional words to start with. In addition, its software upgrade, remote configuration, backup center, PPP callback, router hot backup, etc. are all very useful features for users. ”