Industry Voices—Schoolar says Huawei is now #1 and starting to talk more like a market leader

Huawei (Flickr)

Gaining a competitive edge at times means pushing the boundaries of what is acceptable. Sports have provided many examples of this: Notre Dame and the forward pass, San Francisco 49ers and the West Coast offense, Buffalo Bills and the hurry-up offense. These football tactics were originally considered borderline cheating or a cheap way of gaming the system. Today, they are considered standard football practices. Huawei has taken a similar path in the mobile infrastructure market.

I first encountered Huawei when the company was trying to make dubious claims around single RAN (or in the case of Huawei SingleRAN) using a very dubious methodology that would give it the base station vendor the top market share spot. Mind you this was around 2008, not today.

As my exposure to Huawei grew I found this initial experience was the norm, not the exception. Huawei marketing was often filled with superlatives and market claims that would even make a cigarette advertising executive blush. It appears Huawei has started to change.

Ovum estimates Huawei finally achieved the number one RAN vendor position in 2016. This also means the company is now moving from being on offense and gaining share, to defense and defending share. With this it also appears that Huawei is starting to take a more conservative approach with its outbound messaging.

At the recent Mobile World Congress when discussing CloudAir with the vendor, the company representative thought it was important to ask me if “Huawei was too far ahead of the market and competitors” in discussing the concept of dynamic spectrum sharing among different radio access technologies. The Huawei representative was concerned that CloudAir might be considered as a Huawei specific marketing gimmick. It isn’t, other vendors are doing the same.

Another example of Huawei’s new public persona came at the 5G World in London. During an analyst roundtable, a Huawei executive was asked why the company hasn’t followed its competitors in labeling its kit as 5G ready. The executive said that was just marketing hype. He said Huawei’s kit was just as 5G ready as its competitors but without an actual 5G standard to base station readiness you can’t be truly 5G ready.

The old knock that Huawei gained market share based purely on price has fallen away. It is now more common to hear Huawei won a deal based on technology and service support than on rock bottom prices. (Not saying prices are competitive.) This kind of sensible talk isn’t something we traditionally associated with the vendor, but we welcome more realistic speak from it as a good thing for the industry. With Huawei’s more mature market image and number one spot comes new challenges.

Huawei now must deal with some of the same issues that have faced Ericsson for several years. How do you maintain your embedded customer base and maximize your existing product portfolio while also embracing disruptive technologies? How do you maintain margins as growth slows, and what value add services do add on top of just plain kit? And, even bigger challenge how does the vendor react now that it is the primary target of all its competitors. I expect we are going to see a more defensive Huawei now. Huawei will no longer champion every new technology in a hope of gaining share. Instead the company will take a more targeted approach to its technology bets. And, when Huawei makes those bets it can be sure the operators will be following closely for indicators of where the market is going. Moving from challenger to defending champion will require an all new Huawei mindset.

Daryl Schoolar is Principal Analyst of Wireless Infrastructure for Ovum. Daryl's research includes not only what infrastructure vendors are developing in those areas, but how mobile operators are deploying and using those wireless networking solutions. Contact him at [email protected] and follow him at @DHSchoolar.