New iPhone boosting Huawei's reputation in Europe – Ren Zhengfei

Huawei is benefiting from the popularity of the latest iPhone model, whose success demonstrates the strength of the Chinese vendor’s 5G networks in Europe, insists the Huawei founder.

While Mr Ren is upbeat about the company’s position in Europe, little has changed in the US and new President Joe Biden has yet to pick up the phone.

The Huawei founder and CEO made a rare public appearance at the opening ceremony of the Intelligent Mining Innovation Lab in Shanxi, a joint effort between Huawei, the provincial government and two local enterprises. Answering questions from the press, he made it clear that his company will never part with its devices business, even considering the difficulties it is facing, but indicated that the definition of a device is much broader than a smartphone. Huawei has its eye on 5G-enabled solutions for a range of industry verticals and it expects these to offset any smartphone revenue slide.

“Our shipments of high-end phones have declined because of lack of chip supply. But we support the progress made by Apple’s iPhone 12…Many high-end device users in Europe use iPhones, and the way those phones operate on our networks in Europe actually is a sign we are also doing well,” Mr Ren said, name-checking major global cities in which Huawei has deployed 5G networks.

“Our networks in Europe top global network performance tests. The fact high-end users can use the iPhone 12 to its fullest effect on our 5G networks in Europe is a testament to the quality of our networks. This is helping balance opinions towards Huawei in Europe,” he said, according to a transcript of the event supplied by his media team.

However, for Huawei 5G is about much more than consumers using high-end phones. It has to be, really.

“Our previous generations of communications networks aimed to connect numerous homes and several billion people. But in the 5G era, connecting businesses is the main goal,” Mr Ren said.

As such, Huawei is focusing its efforts on its enterprise business across many industry verticals, such as, but not limited to, mining. The Intelligent Mining Innovation Lab – which is designed to help coal mines in Shanxi Province reduce staffing for high-risk positions, and increase efficiency and safety by exploring new uses of ICT technologies including wireless industrial control networks, industrial optical ring networks, and cloud computing – is likely to be one of many similar initiatives from Huawei.

The vendor believes the enterprise tech business will replace the revenues it is losing at its handsets business, which is not altogether surprising, but the time-frame Mr Ren has in mind is: “I think more or less within this year,” he said.

That’s soon, which demonstrates the amount of effort Huawei is pouring into this side of its business.

It is setting up joint innovation labs to learn more about the needs of a raft of industries, including airports, ports, coal mining, iron and steel production, and automotive and aircraft manufacturing.

“When it comes to 5G applications, most ICT companies didn’t think of mining as a field where they can make market breakthroughs, but we did. China has around 5,300 coal mines and 2,700 ore mines. If we can serve these 8,000+ mines well, we could expand our services to mines outside China,” Mr Ren said. “The basic platform we provide for coal mining is the same as the ones we provide for iron and steel plants, ports, and airports. The 5G applications for different industries are different, but most of the technologies are the same.”

Those mining numbers are big. And if they are multiplied across the various other industry verticals Huawei is looking at, across international markets, then there is little wonder the chief exec has such great faith in the enterprise side of the business.

“If we succeed in Shanxi, our experience can be replicated across the world,” Mr Ren said. “So yes, he added in response to a direct question, “we can still survive even without relying on phone sales.”

However, phone sales are still very much on Huawei’s agenda. Mr Ren dismissed any suggestion that a sell-off of Huawei’s devices unit could be on the cards – in the wake of its sale of the Honor smartphone sub-brand to various state-owned entities last year – but he made it clear that phones are only part of the picture.

“Don’t think devices are only mobile phones. Everything that connects people or things are devices. That includes things like laser radar, ultrasonic radar, and Doppler radar for self-driving vehicles, as well as household gas meters, water meters, TVs, and security systems. Mobile phones are only one part of the device category,” he said. “So Huawei may transfer our 5G technologies to others in the future, but will never sell our device business.”

That transfer of 5G technologies refers to Mr Ren’s offer in late 2019 to sell access to Huawei’s 5G patents, licences, code, technical blueprints and production know-how to one – or possibly more – US companies. “I meant what I said, but no US company has come forward,” he said. “If they want to talk, we’d be happy to talk.”

Mr Ren is hopeful of a thawing of tensions with the US under the new administration, but only to a certain extent. More open policies in terms of the supply of goods could benefit both China and the US, he said. However, the removal of Huawei from the Entity List – The US government’s lexicon of foreign companies it believes are a threat to national security – is not on his radar. “I won’t say it’s impossible, but it’s extremely unlikely. We basically aren’t considering it a possibility,” he said.

As yet, there has been no dialogue between Mr Ren and the new president. Mr Ren said he “would welcome” hearing from President Biden, “but he hasn’t called.”

Mr Ren is keen to talk to Biden about common development, he said. “Both the US and China need to develop their economies, as this is good for our society and financial balance. Everyone needs this. As humanity keeps making progress, no company can develop a globalized industry alone. It requires concerted efforts around the world.”

Mr Ren might be waiting for some time to take that call from President Biden, but he’s not in any hurry to cede the boss’s chair at Huawei any time soon. Sitting around drinking tea all day is not Mr Ren’s style. “I don’t know how I would entertain myself after retirement, and I’d rather continue working at Huawei,” he said. Perhaps he will wait for the next US administration.