The huge Chinese manufacturing corporation Huawei’s attempt to move into the North American market is controversial. The complexity and sophistication of the wireline equipment it sells, juxtaposed against the interconnectedness of the world’s telecommunications and IT structures, raise deep security concerns.
Smartphones raise fewer concerns and may offer the company an alternative path into the North American market. Two new items this week suggest Huawei may be taking this road. At the same time, the company has become one of the first certified to provide North American cable operators with equipment that could become bedrocks of their networks.
Bloomberg and other sites report that Huawei has introduced the Ascend P6 which, at .24-inch thickness, is the slimmest smartphone available, according to Huawei. The story suggests that the introduction is aimed squarely at Samsung and Apple. IntoMobile reports, however, that the phone is not yet ready for North American distribution because it lacks LTE connectivity.
Huawei may have more on its mind than a skinny smartphone. The Financial Times reports that it may be willing to buy Nokia. The story positions Huawei as openly saying it would consider such an acquisition but included the company’s assertion that no active talks are ongoing. Huawei, the story points out, already is a big mobile player:
Even without acquisitions, Huawei has become the third-largest manufacturer of smartphones by volume behind Samsung and Apple, and Mr Yu said that the company aimed to beat internal sales targets of 55-60m smartphones this year. The pace of growth is such that Mr Yu complained about a shortage of component supplies, which has slowed down manufacturing.
This makes mobile a natural jumping off point for penetration of the American market. The impact of a Nokia acquisition on these efforts is questionable, however. Nokia’s focus increasingly is on emerging markets. Nokia also is a user of Microsoft’s Windows Phone, which Huawei consumer business group chairman Richard Yu criticized in the FT article. The Ascend P6 uses Android. The bottom line is that a Nokia deal isn’t necessarily aimed at North America, but the smartphone vendor’s high-profile name certainly makes it an asset in that regard.
It is far from certain how this will play out, of course. Eweek’s Don Reisinger offers 10 reasons that Huawei will have trouble breaking into the North American market. The first three refer to security concerns and the last – concerns about how the Chinese government will react to the treatment the company is getting by U.S. lawmakers – indirectly harkens to those concerns.
Huawei’s efforts to gain a toehold in North America got a boost last week when CableLabs, a consortium that develops standards for the cable television industry, announced that the company was one of several whose systems and optical network units were qualified to implement version 1.0 of a specification that creates interoperability between equipment using the Data Over Cable Service Interface Specifications (DOCSIS) on Ethernet passive optical networks (EPON).