Huawei’s growth push will involve changing its board
Huawei’s focus is on profitability, exploring overseas business and moving its phones higher up the value chain, where it will clash with Apple and Samsung more often
Beijing — Huawei Technologies will shake up its board for the first time in six years, as the Chinese company prepares to push deeper into developed markets such as the US for growth.
China’s largest networking gear maker will in 2018 elect directors for the first time since 2012, rotating CEO Guo Ping said in an interview on Tuesday. That will reshape the board at a company controlled by former army engineer Ren Zhengfei, and infuse new blood into a telecoms giant that became the world’s third largest cellphone brand in 2016.
It is now eyeing new businesses such as the cloud, and markets from Europe to Japan. Huawei, which in 2016 declared it will someday surpass both Apple and Samsung Electronics in market share, has long been hampered in the US by questions over its links to the Chinese government — an issue that’s come before Congress. But Huawei could conceivably enter the market through partnerships with local providers, though Guo said the priority for now was to strengthen its existing positions: Apart from China, Huawei is a major force in markets from Africa to Eastern Europe.
"We are very open in choosing partners. We only provide services and will not use customers’ data, that’s what differs us from other players," Guo said in an interview with Bloomberg Television in Shanghai. "Some US companies have come to us for partnerships. They wanted a local player to help them provide services inside China. There are all kinds of possibilities."
Huawei is one of a handful of Chinese companies to have built a global business over the past decade, initially using low-cost networking gear to gain market share abroad. But a breakneck expansion from equipment maker to mobile brand has come at a cost. Its earnings grew at their slowest pace in five years in 2016, as it sank money into 5G research and a marketing blitz.
Its main business of telecoms gear is slowing as phone carriers rein in network roll-outs to prepare for the advent of faster 5G standards. Later in 2017, its Mate 10 will go head-to-head with the hotly anticipated 10th-anniversary edition of Apple’s iPhone.
The company is now in the midst of a re-think about the way it conducts business. The focus is on profitability, exploring overseas business and moving its smartphones higher up the value chain — where it will clash with Apple and Samsung more often. Executives have also spoken publicly about the need to re-tool a culture bogged down by bureaucracy and waste.
In 2018, representatives appointed by shareholder-employees will vote on a slate of new directors to be nominated by the current 17-member board. It is unclear whether 72-year-old Ren, who founded the company in 1987, will remain and Guo did not address that specifically.
"Ren has led Huawei over the past three decades and given Huawei a very clear direction," Guo said. "For the successors or followers, we will stick to this direction. We are expecting more breakthroughs in this area, I think that’s the request and hope for the new management team."