Huawei has certainly had a tough time of it in recent years with different nations around the world putting a ban on its hardware due to spying and data collection suspicions. This has had a huge impact on securing the actual internal components that go into Huawei devices leading to shortages and making mass production an almost impossible feat. The company was able to stockpile chips and other internals but these are dwindling and at a rapid rate.
As you would expect, Huawei’s profits have been on a continued decline since these sanctions came into effect thus sparking intervention by the company’s CEO Ren Zhengfei to pivot to a new direction.
In an internal memo acquired by Reuters, Ren is looking to circumvent US sanctions by putting all their eggs in the software basket, moving the core of the business “outside of US control”, creating “greater independence and autonomy”. This reportedly means that employees will be focusing on software such as HarmonyOS, that’s used by a plethora of their devices, alongside MindSpore, the lesser-known cloud AI platform.
Additionally, to bolster these efforts, it appears that Ren is looking to shift Huawei attention to competing further worldwide; “Once we dominate Europe, the Asia Pacific and Africa, if US standards don’t match ours, and we can’t enter the US, then the US can’t enter our territory,”.
While all this is speculative and based on internal notes, there’s no question that Huawei would need to change tact to keep the business profitable. We anticipate that it will not be long until we receive some concrete evidence on Huawei’s future software plans especially considering the company has alluded to a HarmonyOS WeChat announcement on June 2nd.
Currently, it seems that while the Biden administration has taken a backseat on trying to bring down other Chinese giants such as TikTok and Huawei rival Xiaomi, none of the sanctions that were imposed in the Trump era aren’t looking likely to be reversed. This, therefore, suggests that the software pivot could be a make-or-break moment for Huawei.
Only time will tell for what the future holds for the Chinese tech behemoth but Ren appears to be putting the correct wheels in motion now in preparation.