Huawei CEO calls for push into software to weather US pressure

An internal memo suggests Huawei will mount an all-out push in the software sector
An internal memo suggests Huawei will mount an all-out push in the software sector GREG BAKER AFP
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Shanghai (AFP)

The head of Chinese telecoms giant Huawei has called for an all-out push into software, an internal memo seen Tuesday says, as part of an accelerating product diversification aimed at weathering US sanctions.

CEO and founder Ren Zhengfei told staff the move made sense "because in the software domain, the US will have very little control over our future development, and we have much autonomy."

The 76-year-old Ren's instructions represent the latest sign of a major strategic refocussing prompted by pressure from the United States, which views Huawei as a potential security threat.

In April, Huawei announced plans to work with Chinese automakers to make intelligent vehicles, and has vowed to ramp up development of its own smartphone operating system after being cut off from Google's Android platform by US curbs.

The world's leading supplier of telecom networking gear -- and until recently a top-three smartphone supplier along with Apple and Samsung until its troubles knocked it out of that triumvirate -- Huawei had earlier announced a diversification into enterprise and cloud computing, and business lines related to the advent of 5G networks.

It sold off its Honor budget smartphone brand late last year, but vowed to retain its flagship handset products while hinting at a greater reliance on the friendlier confines of the domestic Chinese market.

Saying "the best defense is a good offense", Ren outlined an ambitious plan to develop software that "adapts to and embraces the world."

"At a time when the US is pulling back its 'net' and pursuing a closed-off strategy, we need to become more open and go open-source on an even greater scale," he said.

"The company has ample resources to support you, so feel free to boldly invest materials and human resources during your work."

The memo, provided to AFP by the company, was a compilation of discussions in April between Ren and Huawei technical staff.

Aside from passing mention of software leaders like Microsoft, Oracle and SAP, the memo offered few specifics on what types of software Huawei would venture into or who its competitors would be.

Former US president Donald Trump in 2018 launched an aggressive campaign to isolate Huawei, saying its networking equipment installed worldwide could be used by China's Communist Party government for espionage or sabotage.

The company was barred from the huge US market, cut off from global component supply chains, and the US has pressured allies to ban or rip out Huawei gear from their telecom networks.

China and Huawei fiercely reject the US security allegations, saying no evidence has ever been provided to support them.

Huawei's mobile phone sales, along with overall revenue growth, have sagged since last year.

The new US administration of President Joe Biden has indicated it will maintain pressure on Huawei.