Chinese Suggest England is Spying on Huawei

The evidence is so weak I normally wouldn’t report something like this. But this is exactly the kind of thing spy agencies do. MI5 is not going to officially confirm anything.

The official China Daily quotes Kishore Mahbubani, a former Singaporean diplomat who was President of the United Nations Security Council:

According to a business executive from the UK said his country had planted its intelligence officer in Huawei and “scrubbed everything”, and confirmed “Huawei was not a threat to us”.

China Daily
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Bloomberg: Huawei Infiltrated, Used By Chinese Spies

Most of the claims against Huawei are fabricated, as you’d expect when spies are involved on both sides. But a Bloomberg article by Jordan Robertson and Jamie Tarabay has enough intriguing details to suggest at least a plausible claim.

A decade ago, a software update from Huawei contained malicious code that worked much like a digital wiretap, reprogramming the infected equipment to record all the communications passing through it before sending the data to China.

It only worked for a few days and then self-destructed. That’s consistent with a spy agency testing an exploit.

The careful reporting, based on 7 sources within allied security agencies, concluded

China’s spy services were behind the breach, having infiltrated the ranks of Huawei technicians who helped maintain the equipment and pushed the update to the telecom’s systems. … American intelligence agencies that year confirmed a similar attack from China using Huawei equipment located in the U.S.,

Bloomberg

From which I infer that Huawei’s corporate management did not approve the action. The Bloomberg headline, Chinese Spies Accused of Using Huawei in Secret Australia Telecom Hack, suggests the same conclusion.

Huawei’s leadership has repeatedly said they have not and will not cooperate with Chinese spying. Ren and others have almost certainly lived up to that; the $100 billion Five Eyes security apparatus would have found evidence.

Cisco was similarly involved in espionage, apparently inadvertently.

Routers built for export by Cisco (and probably other companies) are routinely intercepted without Cisco’s knowledge by the National Security Agency and equipped with hidden surveillance tools.

https://www.infoworld.com/article/2608141/snowden–the-nsa-planted-backdoors-in-cisco-products.html based on Snowdon leaks

John Suffolk, Huawei’s global cybersecurity officer, told the reporters, “no tangible evidence has ever been produced of any intentional wrongdoing of any kind.”

Bloomberg noted that

The NSA had already penetrated Huawei’s corporate networks in China, looking for evidence of any links between the company and China’s military, according to documents leaked by former NSA contractor Edward Snowden and published in news articles in 2014. Under a program called Shotgiant, the U.S. monitored e-mail accounts belonging to Huawei employees including Ren, the company’s founder. NSA also looked for ways to exploit Huawei products in Chinese-built networks in countries considered high-priority intelligence targets, including Afghanistan, Cuba, Iran, Kenya and Pakistan, according to the documents and articles. 

https://www.spiegel.de/international/world/nsa-spied-on-chinese-government-and-networking-firm-huawei-a-960199.html

We live in a world with spies, few if any as ubiquitous as the United States

Senator Cotton: extraordinary expansion of Huawei Cloud

Huawei’s Cloud is growing faster than Amazon, Microsoft, or Google, Iain Morris writes. He cites U.S. Senator Tom Cotton on growth in

“Egypt, Indonesia, Malaysia, Mexico, Saudi Arabia, Turkey, and the United Arab Emirates.   In addition, Huawei’s cloud services revenues reportedly rose by almost 170 percent in 2020.  This accelerating revenue stream threatens to undermine U.S. efforts to curtail Huawei’s power, influence, and financial strength.

I think Cotton is a little high on Huawei Cloud growth, but the company doesn’t release Cloud sales. I can confirm much of the growth, but it’s good to have confirmation from the NSA, presumably Senator’s Cotton’s source.

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+116% Huawei China Cloud ?$7B 2021

Canalys estimates Huawei had 20% of the Q1 $6B China Cloud market. That’s behind Alibaba but ahead of Tencent and Baidu. If growth continues, Huawei’s China Cloud revenues will be $1.5-2.5 billion yearend and likely over $10 billion in 2022.

Huawei is also expanding rapidly in South Africa, Singapore, Mexico, Brazil, and across the global South. A $5 billion/quarter run rate is plausible by the end of 2022. Canalys sees Huawei as particularly strong in government and automotive markets, both growing rapidly.

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HarmonyOS launch looking good

First 45 minutes of press conference live tweet

Distributed OS uses Service Widgets across all devices including those with very little memory #huawei #harmonyOS live tweet Follow @huaweireport for independent reporting This is remarkable

Huaweireport @huaweireport3m

OpenHarmony 1.1.0 LTS version is officially released openatom.org/#/content/99b6… #huawei #harmonyOS live tweet Follow @huaweireport for independent reporting

Huaweireport @huaweireport6m

Extensive security and authentic features #huawei #harmonyOS live tweet Follow @huaweireport for independent reporting

Huaweireport @huaweireport7m

Harmony has features for maintaining App state and reduce performance hits from multiple apps #huawei #harmonyOS live tweet Follow @huaweireport for independent reporting

Huaweireport @huaweireport10m

Claims better performance than Android UI, which degrades over time #huawei #harmonyOS live tweet Follow @huaweireport for independent reporting

Huaweireport @huaweireport14m

Atomic services can have widgets and icons across devices #huawei #harmonyOS live tweet Follow @huaweireport for independent reporting

Huaweireport @huaweireport14m

Google, Amazon, and Apple megabillion dollar battle for controlling our homes now will compete with Huawei OS. Harmony has original features but also needs many more features #huawei #harmonyOS live tweet Follow @huaweireport for independent reporting

Huaweireport @huaweireport17m

#huawei #harmonyOS live tweet Follow @huaweireport for independent reporting

Huaweireport @huaweireport20m

Distributed application framework. One app to control them all, from anywhere #huawei #harmonyOS live tweet @huaweireport

Huaweireport @huaweireport22m

Partners gadgets connected via control for “superdevices” #huawei #harmonyOS live tweet @huaweireport

Huaweireport @huaweireport24m

Instructions from recipe to smart ovens, shopping apps, refrigerator organizer, nutrition app. Lots to come in health #huawei #harmonyOS live tweet @huaweireport

Huaweireport @huaweireport27m

No apps needed to connect (appropriate) smart device. 90% don’t use devices with app. #huawei #harmonyOS live tweet @huaweireport

Huaweireport @huaweireport29m

MeeTime call on phone and TV. Or on PC. #huawei #harmonyOS live tweet @huaweireport

DavesNews @DavesNews33m

Bryan and all: For two years Huawei has been saying that Harmony is based on the open source version of Android. So the resemblance is not news. #huawei #harmonyOS live tweet @huaweireportBryan Ma @bryanbma

Can’t help but wonder at the resemblance to iOS 🤔#LiveSmartWithHuawei

Huaweireport @huaweireport36m

Can easily play music from phone on speakers. #huawei #harmonyOS live tweet @huaweireport

Huaweireport @huaweireport38m

Harmony OS Control Panel runs everything. Demo’d on phone. I’m sure soon on Amazon-like home units #huawei #harmonyOS live tweet @huaweireport

Huaweireport @huaweireport39m

Autoconfigue very powerful home network, sharing stylus, printer, keyboard & more if you use Huawei devices #huawei #harmonyOS

Huaweireport @huaweireport42m

Distributed architecture can work on 128K #huawei #harmonyOS

Huaweireport @huaweireport42m

One as all. All as one #huawei #harmonyOS

Huaweireport @huaweireport45m

Live tweeting #Huawei #HarmonyOS Leaving no one behind in the digital world. Remarkable animation to begin

Huawei can second source 400 Gbps optical in China

Hengtong

Hengtong, a fiber and power equipment manufacturer in Suzhou, announced volume production of a 400 Gbps silicon photonic transceiver. (Below.) The company sales in 2020 are US$4 billion, including fiber, power cables, and a marine division it bought from Huawei a year ago.

The 400G QSFP-DD DR4 is a high-performance, state-of-the-art module delivered as a very small quad (4-channel) small form-factor pluggable unit. It is comparable to the best of Cisco and Arista.

China is no longer dependent on the U.S. for any components. It does need Taiwan or Korea to produce the most advanced chips, required for mobile phones. Taiwan in turn is dependent on ASML in the Netherlands for EUV equipment, not the U.S.

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Q1 Phone sales down >30%

“2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” said Eric Xu, Huawei’s Rotating Chairman. Huawei generated CNY152.2 billion in revenue, a 16.5% decrease year-on-year. The Network Business continued to grow. It wasn’t officially announced, but consumer products other than phones probably increased sales. The fitness tracker, earbuds, and watches are winning strong reviews.

Phones have been about half of Huawei sales. I infer the 16.5% overall sales fall resulted from a 30-40% fall in phone sales. Other lines of business will soon replace phones, including cars and cloud.

Huawei will survive and has a clear plan to thrive after a hard year or two. It has $40 billion in the bank and if needed essentially unlimited support from the government. It would be smart for the US to end the war but unlikely. Powerful Democratic Senators Schumer and Warner have joined with Republicans. Bideon is unlikely to take this on until after the November 2022 elections.

Ren has called on the spirit of Shangganling and Huawei’s people are responding.

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Harmony OS video running on Mate X2 (2 minutes)

It looks a lot like Android because it’s based on the Open Source Android code. But it took thousands of engineers and billions of dollars to replace Google’s apps and Google Mobile Services, which Google refused to make Open Source.

Harmony actually runs faster than many parts of Google’s Android. Software engineering has improved since Android was built 15 years ago. In particular, the file system is much faster.

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Huawei to Apple: Join us in Harmony

Zhang Qiaoming of Huawei invited Apple to add an interface and join the Hongmeng ecosystem. “If Apple can add interfaces, we do not exclude any manufacturer from embracing the ecology with us.”

Apple is highly unlikely to work with Huawei today. If DC gives up the war on Huawei, Apple may be well advised to join with the Hongmeng ecosystem in three or four years. Huawei’s goal is for Hongmeng to dominate the ICT world. There’s a long way to go; the programmers’ IDE (Integrated Development Environment) is not yet available.

Harmony/Hongmeng is intended to be much more than a replacement for Android. It will be a complete operating system for everything in your home, office, or car. It will be “The Internet of Everything,” controlled by the Huawei Cloud.

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Record $89B in China means 2020 +4% sales, $10B profit

The US war on Huawei brought down sales internationally but China’s 700,000 5G cells and explosive cloud growth meant Huawei had an up year. The chip blockade did hurt in Q4 and will continue to hold down sales in 2021. Huawei has sufficient reserves to outlast the United States until China catches up in chip production.

Perhaps the most important figure in the financial report was the $55 billion cash. Another $10 billion will come in from the sale of Honor/Glory. Huawei is only carrying $21 billion in debt, implying it has plenty of borrowing power on commercial terms.

“The supply restrictions for our smartphone business have caused us a great impact,” reflects Hu Houkon. “The growth rate of the consumer business has indeed not met expectations. Huawei’s mobile phone sales have been advancing all the way for so many years. Last year, it was affected by supply problems. Revenue is declining.”

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$400B China-Iran deal includes a $billion 4G-5G network, most likely Huawei

Add Iran to this map

China has agreed to buy $16 billion/year of Iranian oil in what amounts to a barter arrangement for Chinese goods. Telecommunications is specifically included, with a $billion or more for an upgraded mobile system. Huawei & ZTE will probably split the contract.

Iran’s population is 84 million, about the same as Germany or Turkey. That’s as much as Ireland, Norway, Finland, Denmark, Switzerland, Austria, Sweden, Belgium, and the Netherlands, combined. Nothing’s announced but it will be a big deal.

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