An independent publication

Survive & Thrive: $121,800,000,000 240M phones

Huawei’s Q4 sales were $36,000,000,000. Sales for 2019 were up 18%. 55 million phones sold for a total of 240 million on the year.

Huawei will “survive and thrive,” I wrote the Washington Post back in May. I had researched the components Huawei needs; all but a handful could be sourced outside of the U.S. It had over $30 billion in cash to provide a cushion, with little debt.

The Chinese government was not going to let its premiere industrial company fall behind. It has countered the U.S. attacks around the world. Both India and Germany came under enormous U.S. pressure. Neither has bolted.

5G in China is providing a remarkable boost. China is on track to have 150 million 5G phones by the end of 2020. That’s likely 10 times as many as any other country.

130,000 radios are in place; over 400,000 will be added in 2020. The Minister said, “accelerate” and the results are remarkable. China will be over 2/3rds of the 5G market this year, leaving everyone in the dust. DC claims the U.S> can be #1 are a joke.

Huawei is benefiting enormously from the growth in China. It nows has over 40% of the Chinese phone market. The Chinese people are switching to Huawei, in a spontaneous show of patriotic support. In 2020, China is likely to meet or exceed the 400 million phone sales of the last few years.

WSJ Discovers China Ties Export Credits, States Offer Location Incentives, and Banks Give Loans to Large Companies

WSJ is shocked, shocked to discover that China supports major Chinese companies. The first half of the article and the headline encourages the reader to infer that unreasonable Chinese government support is why Huawei has done so well.

The facts in the article don’t support that claim. By and large, the inference is inaccurate. Huawei’s success is primarily due to extraordinarily hard work and farseeing management. Like most large companies, it takes advantage of government support, which often favors tech companies.

Yes, the government ties low-interest loans in Africa to purchases from Chinese companies. So do the US, the Koreans, and many others..

The city of Dongguan provided low-cost land for a large research center. Dozens of US cities, including New York & Washington, offered massive subsidies to Amazon when considering a second headquarters. Wisconsin promised $3B for a Foxconn plant.

Continue reading

CTO Enrique Blanco: “I have found no evidence of a security risk.”


Blanco of Telefonica is one of the most respected CTOs in world telecom, winning many awards. He’s engineered networks for 35 years, now in charge of hundreds of millions of lines at Telefonica. He’s been deeply involved in 3G, 4G, and 5G. His fiber network is one of the top two in Europe.

“We have no evidence of back doors … we monitor every day,”  he tells Reuters. Blanco was announcing that Telefonica and Telefonica/O2 would add a second 5G supplier alongside Huawei. That’s pragmatic and protects TEF from political problems.

Almost no one outside the security apparatus believes Huawei is spying for China. Even German Chancellor Merkel, who has access to security files, hasn’t seen any reason to believe it.

“There will be consequences”

Ambassador Wu Ken warns, “If Germany were to take a decision that leads to Huawei’s exclusion from the German market, there will be consequences. The Chinese government will not stand idly by.

He indirectly threatened retaliation against the German automakers in China with a hypothetical example. “It would be pure protectionism if Bejing labeled German vehicles unsafe just because it can produce its own cars.”

Germany’s share of the world auto market has fallen by half in recent decades. German companies produced 8 million cars in China in 2018, about a quarter of the market. German automakers have invested tens of billions in China.

Continue reading

No American Parts – Wall Street Journal

Asa Fitch and Dan Strumpf report that a Huawei Mate 30 has been manufactured without any US parts. I’ve been reporting since May that Huawei would break its dependence on US components. It has done so already with 5G radios, now shipping hundreds of thousands per quarter.

The image above shows a Qualcomm front end module in a Nov 7 teardown of a Mate 30 Pro 5G by Techinsights. There were two other US components, but Huawei has done an exceptional job gaining independence. It made few if any radio frequency parts eight months ago. HiSilicon now has a wide selection of RF.

The Mate 30 Pro 5G is much more demanding than the 4G version. It has to filter and amplify more than 2 dozen frequency bands at 5G speeds. It makes sense it’s taking a little longer to replace everything in the 5G version.

Continue reading

Apple passing Huawei Q4?

Trendforce predicts Apple will regain second place in smartphone sales this quarter. Apple is always strongest in the fall with new models. Some thought Apple sales would be handicapped because people want 5G, but Trendforce doesn’t see that in the data. (Below)

They are probably correct because they have figures for product orders. Apple is building 69M phones in Q4, presumably based on sales. Apple sales are likely to slip off next quarter and Huawei could regain #2.

The Google ban is starting to hurt, especially in Europe. It doesn’t affect existing models, which continue to sell well. HongMeng/Harmony and Huawei’s alternative to the Google App Store and services is not quite ready. If the US boycott continues, Huawei sales in Europe will be hurt the next few quarters as well.

H. has literally thousands of engineers and is starting to bridge the gap.

Continue reading

October Sales Gain “Only” 17%

The Google Apps and Store ban is hurting phone sales, especially in Europe. With explosive 5G growth in China, Huawei’s total sales continue to grow far above the industry average. The result is October 2019 sales only 17% higher than October 2018.

Huawei’s smartphone sales outside of China fell 6% year-on-year last quarter, and that followed a plunge of between 12% and 17% in overseas shipments in the second quarter, data from IDC and Canalys showed. CNN

It seems like half the net is addicted to Google Mail, as I am. I have so much history and so many contacts there it would be a real pain to switch. For more competition in software, you need to be able to take your data with you.

The sales fall outside China will likely increase in the next few months. Google works fine on older model Huawei phones, still a large part of sales. As the earlier phones get outdated, the impact should increase.

Continue reading

“Bill Gates: Paranoia on China is a ‘crazy approach’ to innovation”

Nikkei reports from a Gates speech in New York, “that trying to stop Beijing from developing innovative technologies is “beyond realistic.”

“Huawei, like all goods and services, should be subject to an objective test. The rule that everything that comes from China is bad … that is one crazy approach to trying to take advantage of innovation.”

Marrian Zhou, writing in Nikkei, added, “When the event moderator said the Trump administration is unlikely to consider that approach as sufficient to solve security concerns, Gates replied: ‘Anyone with tech expertise would think so.’”

Gates retired from Microsoft in 2007. His foundation has done important work around the world for health.

Bill also made an exaggerated comment about Elisabeth Warren’s proposed wealth tax. However, he also implied he would vote for her over Trump.

In standards, Huawei, Ericsson, Nokia, & ZTE work together

90% of what happens in standards consists of extraordinary engineers working together in good faith. In this 3GPP email exchange, Bruno Landis of Nokia, Frank Yong Yang of Ericsson, Caixia Qi of Huawei, and Li Zhijun of ZTE exchanged ideas and worked out one of the hundreds of issues not yet decided for 5G.

This is from an open mailing list of the 3GPP standards group. As you can see, the tone is respectful as they try to get things right. This corresponds to my experience in standards. Honest folk, working hard to move the industry forward.

The exchange is also interesting because it shows how complicated even seemingly minor 5G questions can be. I’m writing a book on 5G and wouldn’t understand most of the below with help from an expert.

Any error could have practical complications. Some might be minor, like a call drop when you go from France to Germany. Others can be more severe. In the last few years in the US, the 9-1-1 emergency system has failed several times. (I don’t know if better standards could have prevented that.)

Continue reading