Huawei to ship over 2 million “5G” base stations by 2020; Android vs HarmonyOS?
Huawei’s 5G network equipment business:
Ren Zhengfei, Huawei’s founder and CEO, says that his company will produce more than 2 million base stations over the next 18 months, regardless of whether the US decides to remove it from the Entity List. Zhengfei said that while the US’ decision to add Huawei to the entity list was profoundly unjust, it would have little impact on the company’s productivity – particularly with regards to its 5G network equipment.
How many more will they ship after IMT 2020 RIT/SRIT has been standardized by ITU-R in late 2020?
“First of all, please note that adding us to the Entity List was not fair. Huawei has not done anything wrong but was still placed on this list. This list didn’t have that much impact on us. Most of our more advanced equipment does not contain U.S. components, despite the fact that we used their components in the past. These newest versions of our equipment even function 30% more efficiently than before,” he said.
“In August and September, we will undergo a run-in period before we can mass produce these new versions. So, we can only produce around 5,000 base stations each month during that period. Following that, we will be able to produce 600,000 5G base stations this year and at least 1.5 million next year. That means we don’t need to rely on U.S. companies for our survival in this area,” Ren explained.
Ren Zhengfei, Huawei’s founder and CEO says the conflict with the U.S. has exceeded what he had previously thought.
While the impact on Huawei’s network infrastructure business is expected to be minimal, being added to the Entity List does create problems for Huawei’s handset business, particularly as the company looks to reel in its rival Samsung and claim top spot in the market. If Huawei were to be permanently added to the Entity List, it would lose access to Google’s Android operating system, which the company uses as standard on all its smartphone handsets.
“I could never have expected this controversy to be so intense though,” Ren said in a recent interview with Sky. “We knew that if there were two teams climbing up the same mountain from opposing sides, we would eventually meet on the peak and we may clash. We just didn’t expect this clash to be so intense and lead to this kind of conflict between the state apparatus of a country and a company.”
Ren has reportedly sent out another memo detailing the fallout of the conflict, which does finally seem to be hitting home. Job cuts are on the horizon, with replicative staff facing the axe and a simplified management structure promised. Contracts and payments will face higher scrutiny also, to keep an eye on free cash flow, while R&D seems to have been impacted also.
Android vs HarmonyOS on Huawei smartphones:
Huawei’s preference has always been to continue to use the Android operating system on its handsets, however, the US’ latest political campaign has forced the company to bring forward the release of its own OS, HarmonyOS.
“Google is a great company. We have a sound relationship with Google. We have signed many agreements with Google over the years. We still want to use Google’s system in our devices and develop within its ecosystem. Because of this, we hope that the U.S. government will approve the sale of Google’s system to us. There are billions of Android system users and billions of Windows system users around the world. Banning one or two companies from using these systems won’t help ensure the security of the U.S. as a country, so they should keep their doors open.”
“If the U.S. doesn’t want to sell the Android system to us, we will have no choice but to develop our own ecosystem. This isn’t something that can be achieved overnight. We estimate that it will take us two or three years to build this ecosystem. In light of all this, we don’t believe we will be able to become the number one player in the device sector any time soon,” Ren added.
Huawei is already the undisputed leader in optical network and cellular network equipment. They are destined to be #1 in 5G network gear sales, independent of the U.S. sanctions and bans. Huawei is also #2 in global smartphone sales (Samsung is #1). And they’ve introduced a host of new innovative products like the Honor Vision smart screen.
While Americans shamefully excuse the isolation of Huawei as a wise action rooted in “national security” and an aversion to thievery, they don’t realize that Huawei has 80,000 R&D employees (mostly in China) and it spent $15 billion on R&D in 2018 alone. Of course, the Chinese government may have directly or indirectly funded much of that R&D but it is what’s contributed hugely to Huawei’s success.
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Huawei claims AI leadership with launch of Ascend 910 chip and MindSpore
Networking giant Huawei reckons the new Ascend 910 is the world’s most powerful AI processor.
The chip was launched alongside ‘an all-scenario AI computing framework’ called MindSpore at an event positioned as the realisation of the AI strategy announced in October of last year. “Everything is moving forward according to plan, from R&D to product launch,” said Huawei Rotating Chairman Eric Xu. “We promised a full-stack, all-scenario AI portfolio. And today we delivered, with the release of Ascend 910 and MindSpore. This also marks a new stage in Huawei’s AI strategy.”
Huawei chucked around a few datapoints involving things like Teraflops, to support its claim that the Ascend 910 kicks AI ass. It also consumes around 10% less power than Huawei had previously expected it to. “Ascend 910 performs much better than we expected,” said Xu. “Without a doubt, it has more computing power than any other AI processor in the world.”
MindSpore is not the omniscient, Skynet-like AI platform implied by the slightly creepy name, but an AI development platform. Among its priorities are flexibility, security and privacy protection and it’s designed to be used to develop AI stuff across both devices and the cloud.
For obvious reasons anything Huawei announces these days features liberal references to the importance of security and privacy. “MindSpore will go open source in the first quarter of 2020,” said Xu. “We want to drive broader AI adoption and help developers do what they do best.”
At the same event Xu reportedly addressed the impact of all the US aggro on its bottom line. Referring specifically to the consumer business unit Xu said he’s optimistic it won’t be as badly affected as previously feared, but that the impact of US sanctions could still be as much as $10 billion in revenue.
Huawei is investing roughly $1.5 billion annually in its full-stack AI strategy, according to current rotating chairman Eric Xu.
Xu said AI is already being deployed in Huawei products, such as wireless network automation and preventive maintenance, as well as in various key technologies in smartphones.
Huawei Is a Paralyzing Dilemma for the West–Western democracies are struggling to balance the geopolitical challenge of China with their need for 5G technology. A common approach is essential.
Huawei, based in Shenzhen, is not owned by the state — being Chinese, it’s somewhere between collectively and privately owned. It was founded by Ren Zhengfei, who once worked as a researcher for the People’s Liberation Army. But he and his firm insist that Huawei never has built, nor ever would build, so-called “backdoors” into its equipment that would let it spy on, or sabotage, its customers’ networks.
There are arguments for giving Huawei the benefit of the doubt. First, it tends to be cheaper than its rivals, which include the European companies Ericsson and Nokia Oyj. Second, it seems to be quicker. Earlier this year, Deutsche Telekom AG, a German cellphone operator, claimed that rolling out 5G without Huawei would delay its network by at least two years and add billions in cost.
Then there’s the risk that excluding Huawei could antagonize China on trade and investment. In Germany, the bureaucracies opposed to Huawei are the spy agencies and the interior ministry, both tasked with security, whereas the economics ministry and the chancellery, both concerned with the overall Sino-German relationship, are more accommodating.
Finally, there are the principles of fairness and economic openness. There’s no evidence that Huawei has spied on its customers. And part of what makes the West “western,” or at least liberal, is that it doesn’t close its markets to others without good reasons.
Huawei’s critics, of course, have plenty of reasons for its exclusion. First, it’s implausible that any Chinese company can avoid becoming an arm of the state and the Communist Party. China’s National Intelligence Law of 2017 requires all the country’s companies to “assist” in national intelligence, and to keep that assistance secret. An earlier law defines national security as including economics and culture.
Second, 5G isn’t any old phone network. Unlike 4G, it’s the infrastructure for machines and devices to talk to one another on the so-called Internet of Things. If it works well, it will make entire cities “smart” and enable autonomous cars to drive themselves through them, all the while exchanging reams of data. Think of the human body: If 4G is the ears, 5G is the entire nervous system. Would you want China to have control over it?
The fear is not overblown. Whoever provides the software and hardware for 5G will also have a head-start in eventually transferring that prowess into 6G and 7G. And once a technology is baked in, a simple software update could turn a harmless feature into a mole. A banal analogy would be your smartphone, when its maker schedules an update that adds emoticons but suddenly seems to drain the battery much faster — and all of this coincidentally just before the launch of a new model.
So caution is advisable. Even at the risk of slowing down the roll-out, regulators would be wise to assure diversity among suppliers. They should also ring-fence the most sensitive parts of the infrastructure. Procurement rules can’t discriminate against individual companies, but they should establish criteria of trustworthiness. Suppliers that can’t fully meet them would be allowed to play only in the network’s periphery.
Just as important, the western allies must coordinate their approach. It makes little sense for, say, Denmark to exclude Huawei while Germany next door includes it. Autonomous cars, trucks and boats, geo-tagged goods in containers, patients with heart monitors: All of these and other connected nodes on the network will be moving across the border, constantly communicating with different “clouds” of server computers in the background. The data have to be safe on both sides of the border.
The West and its allies must therefore come to a common position on Huawei — and ideally on both China and data security generally. 5G and its successors have an almost utopian potential to solve many human problems. They also have a dystopian potential to turn our freedoms into a surveillance hell. The democracies need to confront this reality.
By Brian Fung (edited by Alan J Weissberger for technical correctness and specificity)
As U.S. officials have pressured allies not to use networking gear from Chinese technology giant Huawei over spying concerns, President Trump has urged American companies to “step up” and compete to provide the next generation of high-speed, low-lag wireless service known as 5G.
There’s just one problem: Barely any U.S. companies manufacture the technology’s most critical components.
The absence of a major U.S. alternative to foreign suppliers of 5G networking equipment underscores the growing dominance of Huawei, which has evolved into the world’s biggest supplier of telecom equipment, sparking fears within the Trump administration that a 5G network powered by Huawei’s wireless parts could endanger national security. And it throws into sharp relief the years-long retreat by U.S. firms from that market.
Carriers such as Sprint and Verizon have moved swiftly to launch (pre-standard) 5G services for consumers. But the wireless networking gear the industry relies on still comes from foreign suppliers: four companies, Sweden’s Ericsson, Finland’s Nokia and China’s Huawei and ZTE, account for two-thirds of the global market for telecom equipment, according to analyst estimates.
Some U.S. technology giants such as Cisco sell switches and routers that reside in the innermost parts of a carrier’s network. But despite its size, Cisco doesn’t compete in the market for “radio access,” or the wireless infrastructure that allows cell sites to connect with smartphones and other mobile devices.
“There is no U.S.-based wireless access equipment provider today that builds those solutions,” said Sandra Rivera, a senior vice president at Intel who helps guide the chipmaker’s 5G strategy.
It’s this part of the Internet ecosystem that is increasingly important as more devices and appliances gain wireless connectivity and smart capabilities. 5G is expected to shape technological innovation for years to come, providing mobile data connections for virtual-reality headsets, driverless cars and more. Proponents say 5G eventually will support download speeds of 1,000 megabits per second, roughly 100 times faster than today’s 4G-LTE standard.
The rising global demand for 5G equipment highlights how the United States, a technology leader in other respects, is largely absent from the wireless networking industry. It reflects the decline of a once vibrant ecosystem of American companies that formerly went toe-to-toe with the likes of Nokia and Ericsson. And it puts a focus on Chinese firms such as Huawei, whose rise to prominence has come at the expense of Western networking titans and sparked a global campaign by U.S. officials eager to persuade allies not to allow Chinese equipment into their networks.
At the dawn of the wireless age 30 years ago, U.S. companies jostled for primacy in wireless networking. Companies such as Motorola and Lucent — an offshoot of the old AT&T monopoly — were sources of innovation, exploring new ways of delivering voice and data wirelessly. It was Lucent, for example, that helped introduce Code Division Multiple Access, or CDMA, a mobile technology that promised to improve the capacity of wireless carriers.
But their fortunes declined around the turn of the century as they failed to keep pace with a changing market. No U.S. company stepped in to fill the gap as those companies faded — partly because of the growing strength of foreign alternatives and partly because of the immense scale required to survive in that line of business, according to industry experts.
“Lucent basically collapsed because they didn’t have a big enough wireless arm to keep them afloat when the Internet backbone [business] collapsed” in the dot-com bust, said Roger Entner, a telecom analyst at Recon Analytics. “Motorola, over time, simply became less competitive because the other vendors had more economies of scale.”
Motorola and Lucent’s wireless infrastructure businesses were soon gobbled up by Finland’s Nokia and France’s Alcatel, respectively. One reason the European companies proved so successful, Entner said, was because the European industry agreed from the start to develop a common standard for wireless communication, known as GSM, that all European telecoms would share. By contrast, the industry in North America took a looser approach, with some carriers backing network technologies that weren’t mutually compatible.
Take CDMA. First developed for mobile use in the 1990s, the standard was technologically superior, allowing carriers such as Verizon to pump more traffic through their cell sites over the same amount of time compared with alternative standards. But the technology created headaches for consumers who found they couldn’t keep their phones when they switched from Verizon to a network like T-Mobile’s, which ran on GSM.
While the American approach allowed for more technological experimentation and innovation, a fragmented market based on competing standards made it more challenging for U.S. wireless equipment sellers to amass a large customer base.
Today, Nokia and Ericsson are the top providers of telecommunications networking gear in North America and are No. 2 and No. 3, respectively, in the world. The two companies each recorded revenue of about $25 billion last year.
But both have been surpassed by Huawei, which in the span of three decades has become the world’s largest provider of telecom equipment.
“I do think the Western companies did underestimate how credible Huawei was,” said Paul de Sa, a telecom industry analyst and co-founder of the advisory firm Quadra Partners. “There were executives who basically laughed [at the idea] that Huawei or ZTE could compete.”
Founded in the late 1980s by Ren Zhengfei, a former engineer for the Chinese military, Huawei began as a technology supplier for Chinese customers. But by the early 2000s, Huawei had begun selling globally, and now does a robust business not only in network equipment but also in consumer smartphones and enterprise services. Last month, the privately held company reported that it had finished 2018 with revenue of $107 billion, up 20 percent despite the U.S. campaign. Profits rose 25 percent, the company said, to $8.8 billion.
To give another perspective on Huawei’s enormous influence, the company’s chief rivals, Nokia and Ericsson, account for 17 percent and 13 percent of the global market for telecom equipment, respectively, according to figures compiled by the research firm Dell’Oro Group.
Huawei’s market share, at 29 percent, is nearly as large as both of them combined.
Despite an early reputation for cheap knockoff hardware, Huawei today is recognized for low prices, reliable equipment and engaging customer service, analysts say. As Huawei has invested in its own research and development, even Western telecom companies acknowledge that Huawei’s products are as good as — if not better than — competing equipment from Nokia or Ericsson.
“About 25 percent of our members have Huawei or ZTE” in their networks, Carri Bennet, an attorney for the Washington-based Rural Wireless Association, told lawmakers at a recent House Judiciary subcommittee hearing.
Gordon Smith, the chief executive of Sagent, a network intelligence and analytics company formerly known as Clover Telecom, estimated that Huawei gear typically costs “tens of percents” less than the competition’s.
With the support of China’s state-owned development bank, Huawei also has been able to undercut competitors with attractive financing for its products. In February alone, Huawei announced partnerships with wireless carriers in eight countries, including Iceland, Switzerland, Saudi Arabia and Turkey.
It doesn’t hurt that Huawei serves a massive domestic market in China, which grants it tremendous advantages of scale that many tech companies, including American ones, are hungry to access themselves. China is so critical to Apple, for example, that the iPhone maker blamed the country’s economic slowdown for a downward revision in Apple’s recent quarterly sales estimates — the company’s first such warning in 15 years.
Huawei’s success, however, has been clouded by allegations of intellectual property theft. The U.S. government accused two Huawei units this year of trying to copy a robotic arm used by T-Mobile to test smartphones. (Huawei has pleaded not guilty.) In the past, Huawei has also been accused of stealing technology from Cisco; the two firms became locked in a legal dispute in 2003 and settled months later, after Huawei conceded that Cisco-made code had ended up in a Huawei product. The code was later removed.
Then there is Nortel Networks’ discovery in 2004 that hackers — traced to IP addresses in Shanghai — had stolen nearly 1,500 sensitive files from the Canadian telecom giant’s computer systems. The company’s subsequent investigation failed to prove China’s direct involvement, much less Huawei’s. But after analyzing the stolen files — which bore cryptic names such as “Photonic Crystals and Large Scale Integration,” “Eco_Strategy.ppt” and “HDX R2 Standard Reconfigurations Test Plan – Draft 0.2″ — and a months-long probe, Nortel’s security adviser at the time, Brian Shields, became convinced Huawei benefited indirectly from the breach. The file names, a list of which Shields provided to The Washington Post, have not been previously reported.
“Nobody would be interested in these kinds of documents other than a competitor,” Shields said. “In my opinion, looking at what the hackers went after, it is likely these documents made it to Huawei.” That seemingly ancient history is newly relevant, as U.S. officials argue that incorporating Huawei gear into U.S. carriers’ 5G networks poses a significant spying risk.
At an industry conference in Barcelona in February (WMC 2019), U.S. officials urged allies in bilateral meetings not to use Huawei equipment over concerns that it could enable eavesdropping by authoritarian regimes. U.S. partners largely acknowledge the risk but have asked for more concrete evidence to back up the case.
“The Europeans really keep pushing for this concept of, ‘Where’s the smoking gun?’ ” said a person familiar with the discussions, who spoke on the condition of anonymity to speak more freely about the closed-door meetings. “They say, ‘Hey, we don’t want security threats either … but you can’t just come in here and tell us that there is a unity of interest between Beijing and Huawei and have that be the end of your presentation.’ ”
Some analysts say that in a previous era, America’s allies might have been more sympathetic to the Trump administration’s message. But Trump’s conduct, they say — berating NATO allies, canceling a visit to a World War I memorial because of rain, calling Europe a “foe” on trade — has not helped.
“In a world where the U.S. had more soft power,” Entner said, “I’m pretty sure the Europeans would be a lot more receptive.”
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