Huawei has invested heavily in fifth-generation technology. Now it is willing to sell access to its 5G patents, licences, code, technical blueprints and production know-how
designed to evoke ancient Greece—ringed by stone columns and six towering approximations of the Caryatids—it was fitting that Ren Zhengfei, chief executive of Huawei, should extend an olive branch to the West: a piece of his company. The palatial edifice on Huawei’s sprawling campus in Shenzhen houses an exhibition hall proudly displaying the Chinese telecommunications giant’s “fifth-generation” technology.
The gesture may also convince those suspicious of Huawei’s tech that the firm’s business intentions are hard-nosed. Mr Ren says money from the deal would allow Huawei to “make greater strides forward”. The value of the firm’s entire 5technology portfolio, if it were sold, could run to tens of billions of dollars. In the past decade the company has spent at least $2bn on research and development for the new generation of mobile connectivity.
Even if the Chinese state gave its blessing, who might be the buyer? Mr Ren says he has “no idea”. Analysts suspect that giants such as Ericsson and Nokia would balk at an offer out of pride, and would question the value of Huawei’s tech. The technology may not help a smaller firm compete on an equal footing with Huawei. The Chinese company is so well entrenched with big operators, say consultants, that it would not make financial sense for most of them to take on a new supplier.
Could Mr Ren’s proposal, then, be a sign of desperation? Not a bit of it, he says. He claims that Huawei has found alternative suppliers for its network-infrastructure business that are unaffected by its blacklisting by America. He denies that the company will make a loss in the coming year. Huawei’s share of the Chinese smartphone market, where it has never relied on Google’s apps, is growing fast. But two-fifths of its annual phone sales, or roughly $20bn, come from outside the country. Though the firm’s executives repeatedly declined to share any projections, firm-wide revenue growth in the eight months to August slowed to 20%, year on year, from 23% in the first half of 2019. If the Mate 30 and its successors flop, Huawei stands to lose billions of dollars in annual revenue.
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