What makes him powerful: Little is known about Ren Zhengfei, the former military officer who founded Huawei in 1988. Despite his low profile, he has managed to transform Huawei from a little-known Chinese telecom company into one of the largest infrastructure vendors in the world. While Ericsson (NASDAQ:ERIC) currently holds the No. 1 spot with 40 percent of the global wireless infrastructure market, according to research firm Dell Oro Group, Huawei consistently battles with Nokia Siemens Networks for the No. 2 slot.
In 2010 Huawei estimated that it grew its revenues 28 percent to $28 billion. Although about two-thirds of those revenues come from non-Chinese customers, Huawei has failed to make inroads in the U.S. market, due largely to concerns about security.
The company unsuccessfully tried to win part of Sprint Nextel's (NYSE:S) Network Vision project contract in 2010. Sprint reportedly decided to block Huawei from getting its multi-billion-dollar project because of mounting national security concerns from lawmakers and pressure from the Commerce Department. There were fears that Huawei's chips, routers and other equipment could be bugged to give China's government access to sensitive information.
Nevertheless, the company was successful in securing a contract with Clearwire (NASDAQ:CLWR) for its WiMAX network. And it also inked a deal with Cox Communications for its CDMA network. However, earlier this year Cox said it was decommissioning its 3G network infrastructure and instead would use Sprint Nextel's CDMA network for its wireless service.
Huawei also has made inroads in the U.S. handset market and has said it will sell LTE phones next year, and is considering other smartphone operating systems beyond Android. Specifically, the company said it aims to become the nation's fifth largest handset vendor within the next three years. The company is currently among the top 10 handset makers in the United States.
Regardless of its set-backs on the infrastructure side, Huawei has been working hard in the past year to ease security concerns, including establishing a national security committee, using an accredited independent test lab to check Huawei's proprietary software and ensuring trusted delivery of all products by using U.S. citizens to deliver product in the U.S.
In addition, the firm continues to invest in the U.S. market by opening a new R&D center in California.
However, these efforts haven't been met with very much success. Earlier this month The U.S. Commerce Department declared that Huawei would not be allowed to build LTE networks for the U.S. public safety community because of concerns over national security. Huawei has asked the U.S. government to specifically detail its concerns.
Clearly Zhengfei will have to overcome U.S. government security concerns if he wants Huawei to rival Ericsson in the U.S. market. Nevertheless, the company has made tremendous strides over the past few years and is certainly a huge contender in the global wireless market. --Sue