In climbing the peak of world-class enterprise on the road, Huawei also get rid of a big rival. According to market research firm Dell’Oro has recently released data show that in the global telecom equipment market, Huawei has surpassed the Nokia Siemens, and into the second-largest telecom equipment supplier. As of the end of the third quarter of this year, Huawei’s share of 11% from the same period last year rose to 20%, jumping to second; and Ericsson continue to dominate the first-place position, a share of 32%.
At present, Huawei’s objective is aimed to send competitors strength of Ericsson. In the telecom equipment vendors, Ericsson, not only in revenue and market share for many years maintained a boss position, but it is also the most profitable. However, Huawei’s development momentum of view, Ericsson, Huawei, from the scale may be just around the corner beyond. Huawei’s growth in recent years has been higher than Ericsson, Huawei’s sales revenue to continue to make close to Ericsson: Huawei’s 2004 sales of 3.827 billion U.S. dollars, Ericsson of SEK 132 billion (according to calculation by the end of 2008 the exchange rate of about 17.16 billion U.S. dollars ), to 2008, Huawei’s sales revenue of 18.33 billion U.S. dollars, Ericsson revenues of 208.9 billion Swedish kronor (about 27.16 billion U.S. dollars). If both sides at the current rate of growth, Huawei will be able to take two years and then the income scale than Ericsson.
Of course, Ericsson will not wait to catch up with Huawei, Ericsson and Huawei’s “tug of war” will become more intense. Ericsson has recently completed a 1.13 billion acquisition of Canada’s Nortel Networks has been an insolvent company’s assets, CDMA and LTE transactions, and further strengthen its market leading position. Huawei put the next-generation LTE mobile networks as a strategic focus, to Ericsson to launch an offensive. Huawei beat Ericsson has recently won the building in Norway, the fourth generation mobile network contract to Ericsson and Nokia Siemens to replace the old building of networks. The deal is so far the largest European market, LTE transactions.
Although the distance closer, but transcends it was not easy. The layout from a business point of view, a broader line of business of Huawei, which is conducive to seize more market opportunities, big scale of business. Such as Huawei and ZTE are three 3G standard, “takes all” vendors, in the snatch the Chinese 3G market, Huawei, Ericsson, more than a single WCDMA standard, Alcatel-Lucent is emphasis on CDMA, earlier withdrew from CDMA market, Nokia Siemens Networks, advantages – This is in a catch-up phase of Huawei is also very practical choice. But it also shows the gap between Huawei and Ericsson – not enough focus on business, specializing in business less prominent. Such as Ericsson in the higher-margin business and multimedia telecommunications services occupy the dominant position, which is Huawei’s need to make up the short board.
Moreover, compared to the 133-year history of the century-old Ericsson, Huawei in the management, brand and cultural heritage of comprehensive strength, and there is not a small gap. For example, from the staff and the per capita efficiency of view, only a 22-year history of the development of Huawei, number of employees nearly 9 million people, has more than 7.8 million people, Ericsson, Huawei, in 2008 the per capita productivity of 21 million / person less than the Ericsson’s 35 million / person. If Huawei Dengfeng mainly depend on products previously cost-effective and rapid implementation of the capacity invincible, then now, with Huawei Technologies and Ericsson to face more and more like the “peak” enterprise contest, from management, brand, and cultural dimensions, ” soft power “role was even more pronounced.
However, insiders view of Huawei, Ericsson, “sight”, Ericsson, Huawei is not difficult to achieve beyond the goal. Huawei’s ongoing financial restructuring, and so the internal management of change, precisely in order to “soft power” of the world-class companies such as Ericsson, par. If we say that beyond the short-term objectives Ericsson, Huawei, then catch up with Cisco’s long-term goal is to Huawei. Huawei within the end of 2007 “issued by the staff warned the book”, the proposed “annual income of 40 billion U.S. dollars” development goals – the equivalent of 40 billion U.S. dollars network communications giant Cisco’s current income scale.
At one time, Cisco from Huawei “very close” – Huawei to become a threat to Cisco, which is in January 2003 Cisco sued Huawei’s intellectual property rights infringement cases occurred in the context. At that time, Huawei was once called the “Chambers of the nightmare”; but now long out of Cisco’s Huawei to give the “nightmare”, jumped out of the profits to the traditional telecommunications equipment, successfully transition to high-margin territory. Cisco has across new areas of IT and telecommunications convergence, from a network equipment company is committed to turn out to consumers, service-oriented company. Cisco’s competitors are now no longer Huawei, but Microsoft, Google, Hewlett-Packard or IBM, and other new rivals. Huawei and Cisco’s business “intersection” fewer and fewer can be said that competition from Cisco and Huawei is not a level of – both from a business point of view or from the strength, such as Cisco’s 2008 fiscal year net profit of 8.1 billion U.S. dollars, net profit margin of more than 20%, while Huawei’s net profit was 11 billion U.S. dollars, net profit margin of only 6.1%.
General trend of convergence in the ICT, Cisco, Alcatel and other telecom equipment giants are already turned to look at industry, enterprise networking market; At the same time, Hewlett-Packard, Microsoft and other IT companies are to penetrate the telecommunications industry, and now it is based on HP’s acquisition of 3COM background. Two years ago, Huawei, Bain Capital tried to join forces with the U.S. 2.2 billion joint acquisition of 3Com Corporation, but in the end, because of U.S. concerns about national security and abortion. If the acquisition time, Huawei 3COM, Cisco may be able to narrow the distance, but unfortunately, the last 3COM received by IT giant Hewlett-Packard pocket. Huawei’s business focus is now also focused on the telecommunications line, enterprise networks business is very small. ICT integration in the path of development, the growing gap between Huawei and Cisco’s large, Huawei will be to recover Cisco, Lu still far too long.
Cisco, Ericsson, Huawei