Huawei focused on U.S. handset biz with networks in deep freeze

LAS VEGAS--Huawei may have decided that for the time being it's not worth it to keep pressing on the U.S. infrastructure market, but the company is focused on expanding its device business in the U.S. market, especially for higher-end LTE devices, according to a Huawei executive.

In an interview with FierceWireless here at the 2014 Consumer Electronics Show, William Plummer, Huawei's vice president of external affairs, made clear that Huawei remains interested in the U.S. market. He said the company's goal right now is to build on the momentum it has gained in the lower-end smartphone market with carriers such as AT&T Mobility (NYSE:T),  T-Mobile US (NYSE:TMUS), T-Mobile's prepaid unit MetroPCS and Cricket provider Leap Wireless (NASDAQ:LEAP).

"In this market particularly, given the channel environment and the concentration of the carrier channel, when you're a newcomer you have to earn your place, you have to prove yourself," he said. Huawei has proven to be a reliable partner over the last several years, he said, and has shown that it is flexible enough to meet different carrier demands.

Earlier this week, Huawei unveiled its latest flagship smartphone, the Ascend Mate 2. Richard Yu, CEO of Huawei's Consumer Business Group, promised that the phone would be released in the U.S. market, and he named AT&T and T-Mobile specifically as carriers that would be able to support the device. However, he didn't provide specifics on a launch date or a price for the Ascend Mate 2.

The phone supports LTE Cat 4, which means theoretical peak speeds of 150 Mbps, has a quad-core processor from Qualcomm (NASDAQ:QCOM) and a 4,050 mAh battery, which Huawei said will support two days of heavy use. Plummer said the goal with the Mate 2 is to deliver on the promise of "more" for consumers, especially in terms of the mobile broadband experience.

Plummer said that to build Huawei's device brand in the U.S., the company is going to work with traditional carrier partners and the unlocked retail channel. "The overarching goal in terms of either approach is we need to populate 4G LTE devices into the marketplace," he said. "Regardless of channel, that's going to be good for carriers and consumers."

Huawei has been effectively banned from the network business in the United States because of espionage concerns. A report from the House Permanent Select Committee on Intelligence recommended in October 2012 that the United States block acquisitions and mergers involving Huawei and ZTE, and it also recommended that the U.S. government and U.S. companies avoid using equipment from the two Chinese companies. Both companies have vigorously denied that they pose a security threat.

"First off, from an infrastructure perspective the company stands ready to meet the needs of any carrier, anywhere," Plummer said. "The priority for infrastructure is going to be on markets that welcome competition."

Plummer warned that the global technology industry could split along geographic or political lines in the wake of a recent report that the National Security Agency has targeted specific technology products. On Dec. 30, Der Spiegel reported that the NSA has targeted Huawei products, as well as those of Cisco Systems, Dell, Juniper Networks and Hewlett-Packard, with malicious software and hardware that create backdoors in products. Huawei has long pushed for cross-vendor standards to protect networks and data.

"What's been perhaps missing is a catalyst," Plummer said. "We were a lonely voice. Other peers that didn't have a headquarters in one specific geography weren't facing the same kind of prejudicial and discriminatory policies. Now, the deficit of trust is universal."

Plummer said vendors now have "common cause" to work together. Huawei, along with companies such as Cisco Dell, Ericsson (NASDAQ:ERIC), HP, IBM, Oracle and ZTE, is member of the Open Group, a vendor and technology-neutral industry consortium aimed at creating standards. "We need to do something to raise the bar not only to secure networks and data but to secure confidence," he said.

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