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Communications Hardware

Chinese Huawei Takes on U.S. Telecom Market 398

Posted by timothy from the thattawei dept.
ChipGuy writes "With funds on loan from the Chinese government, Chinese equipment giant, Huawei is undercutting big rivals like Cisco and Nortel, and is using money to buy its way into the U.S. market. Overseas in Europe and Asia it already has become a major force. There are parallels with auto industry and home appliances. It took a little while before prices became a determining factor and shifted growth away from North American vendors. Telecom will go through the same curve. Huawei is curently selling EVDO phones for about $130 and WCDMA phones about $250 which is about 30% than everyone else on the market. Huawei's agenda is pretty clear - get business and sales at any cost. And that means bad news for already struggling telecom industry."
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Chinese Huawei Takes on U.S. Telecom Market More

Chinese Huawei Takes on U.S. Telecom Market

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  • 30% what? (Score:3, Insightful)

    by Luke727 ( 547923 ) on Sunday April 03, 2005 @02:50PM (#12127888) Homepage Journal
    Higher? Lower? Fucking idiots.

  • 30%? (Score:4, Informative)

    by NETHED ( 258016 ) on Sunday April 03, 2005 @02:52PM (#12127903) Homepage
    30% less?
    30% of?
    30% more?
    30% crappier?

    Come on!

    • Re:30%? (Score:3, Funny)

      by LiquidCoooled ( 634315 )
      As it says in the headline - their agenda is pretty clear from the start.

      They are using the SCO line of attack. They are confusing you with figures which make no sense, and nobody is stepping up to clear up their ambiguity, therefore, they make no sense.

      Because none of it makes sense the only sane thing left to do is buy a phone.
    • well it is not really the submitters fautlt or the editors , as well the article says and I quote "Huawei is curently selling EVDO phones for about $130 and WCDMA phones about $250 which is about 30% than everyone else on the market." so ... well i imagine from the context its less .
      • well it is not really the submitters fautlt or the editors , as well the article says and I quote "Huawei is curently selling EVDO phones for about $130 and WCDMA phones about $250 which is about 30% than everyone else on the marke

        If the original article says that, then it's most definitely the submitter's fault for copying such a nonsensical piece into their summary. To a lesser extent, it's also the editor's fault for deeming and incomprehensible sentence newsworthy.
    • 30 is the chinese government's equivalent of 42.

      It's the answer to everything... Just well, the wrong answer.

    • Re:30%? (Score:3, Funny)

      by nutshell42 ( 557890 )
      That's the new marketing ploy du jour. Expect to see more of it in the next weeks:

      "Microsoft Longhorn and your productivity will by about 40%!!!"

      "Buy Apple, now 100% than Redmond!"

      "Forget the Prius, the new Hummer hummer offers 40"

      No substance, no refutable statement you could be sued for and the internet made consumers error-tolerant so they'll read what the marketing boys want them to read.

      Profit!

  • Shouldn't this be what the WTO covers? (Score:4, Insightful)

    by antifoidulus ( 807088 ) on Sunday April 03, 2005 @02:54PM (#12127913) Homepage Journal
    Too bad the US is:
    a) violating the WTO rules currently.
    b) too addicted to Chinese money to fund Bush's spending splurge/tax cutting spree to really bring any meaningful grievances against China....
    Am I the only one who sees how insane Bush's spending policies are? Maybe it's not the wisest idea to become dependant on a country whose primary objective seems to be to destroy us...but then again, this country did elect Bush...twice....
    • Just exactly what rules in the WTO are they breaking? Are you refering to the ITU rules set forth by the UN?

      It is nice to make such a statment but you do not back it up like you did with your second point. Elaborate please.

      • Re:Shouldn't this be what the WTO covers? (Score:5, Informative)

        by Anonymous Coward on Sunday April 03, 2005 @04:40PM (#12128619)
        Just exactly what rules in the WTO are they breaking?

        I'm amazed someone would think such a statement needs backing up.

        Steel tariffs [bbc.co.uk], tax subsidies [bbc.co.uk], Gambling [theregister.co.uk], Cotton [tralac.org]. All kinds of stuff.

      • In addition to the other response:

        Tariffs imposed on Canadian softwood lumber.. the WTO has ruled against the US several times over several years but the US refuses to abide by the WTOs decision.

        That and the closed border to Canadian beef is seen as one possible reason for Canada rejecting missle defense.

        Also, the EU and Canada have just imposed retaliatory tariffs on various US products because of unfair US trade policies (Byrd ammendment).

        It's sad that two of the US's biggest trading partners have to

  • Clarification... (Score:4, Informative)

    by EntrancedX ( 827523 ) on Sunday April 03, 2005 @02:57PM (#12127927)
    As some have noticed... There was a lack of one word "LOWER" in the post. Here: "Huawei is curently selling EVDO phones for about $130 and WCDMA phones about $250 which is about 30% LOWER than everyone else on the market.
    • I think most people who are reading about a story where "prices becoming a factor" and sees some prices will know from the context about whether it's less or greater than. Surely a lot of people have made mistakes from editing where they left in/out words before?

  • Did anyone read this as... (Score:5, Funny)

    by GFLPraxis ( 745118 ) on Sunday April 03, 2005 @02:57PM (#12127930) Homepage Journal
    Chinese Hawaii takes on U.S. Telecom Market?
  • Does this mean that the money the Pentagon saves by cutting basic research funding can be redirected to our poor struggling telecoms?
  • I do not understand this form of economics. Why exactly is the Chinese government allowed to fund this company, is this not unfair to American and other countries corporations? Isn't this violating free-trade with China and Bush and Clinton both advocated?

    • Yes, pleas explaine WHY! (Score:5, Insightful)

      by Saeed al-Sahaf ( 665390 ) on Sunday April 03, 2005 @03:19PM (#12128070) Homepage
      I just can not understand why the American government is allowed to fund Boeing, General Dynamics, several oil companies, and Halliburton. Is this not unfair to American and other countries corporations?
    • First of all, the Chinese government is *not* funding them. They are giving them a loan on which they charge interest.

      Secondly, the US government can hardly complain about subsidies. A recent bloomberg article [bloomberg.com] states that the US government has spent $117 billion on the war in Iraq (almost 8 x more than the Chinese loan).

      Now...I wonder which companies benefit from that?

    • Re:Can anyone explain to me WHY? (Score:4, Insightful)

      by NeMon'ess ( 160583 ) <flinxmid AT yahoo DOT com> on Sunday April 03, 2005 @04:35PM (#12128589) Homepage Journal
      Why exactly is the Chinese government allowed to fund this company?

      Because American managers and CEOs are self-serving and would rather have a global playing field on which to profit instead of just the domestic market. You see they'd rather outsource their companies to save money, except for the management jobs. They get rich, most Americans suffer, and in the long run the country goes to hell becuase the school system falls apart.

      Under the pure capitalism, there is no minimum wage, which does in fact mean that Nike and Levis can move their garment factories back here, and there's plenty of employment. But since the jobs pay 3rd world wages, the country becomes a third world nation where the middle class barely exists, the owners and managers live like kings, and everybody else takes it up the ass.
      • Forgot to connect the dots... If corporations pressed Congress to level the playing field, the resulting legislation might call for the Chinese to pay higher wages or provide safer working conditions. Those advantages are a large part of why it's cheaper to outsource. Neocons and many businesspeople want to outsource for personal gain, whereas bettering workplace conditions worldwide would cost corporations money.

  • Red menace! (Score:4, Funny)

    by Scrameustache ( 459504 ) on Sunday April 03, 2005 @03:05PM (#12127980) Homepage Journal


    Damn communists! Undercutting big rivals, using money to buy their way into the U.S. market! Can't trust 'em!
    • It is strange that in this case and a few others ,a communist country is doing a better job at capitalism than the worlds largest capitalist country .
      • "a communist country is doing a better job at capitalism than...

        It's very easy to be a successful capitalist if you build your success on a foundation of slave labour and kill those who speak against you. You end up doing a lot "better job" than the others.

        • Are you talking about China or the U.S.?
          • China. The only slave labour involved in the US economy is the slaves in China who make some of the goods. As for killing consumer advocates and reformers and competitors, last time I knew Ralph Nader was still alive. The Chinese "Naders" are in prison, dead, or speaking out (but only if they left China).
        • This may be the case , i do not know . But if you have any links to evidence to back this up i would be intrested in reading about it .
          a google search gives no results on slave labour to any large ammount .
          Yes they do have civil liberty problems and several others , and some cases of slave labour have been recorded (the gouvernment has come down hard on the companys doing this).I may be wrong on this but it sounds like propaganda to me .
          It is not slave labour to my knowlidge , it is low cost labour .

  • Huawei equipment is junk (Score:3, Informative)

    by BigIrv ( 695710 ) on Sunday April 03, 2005 @03:07PM (#12127991)
    I have seen first hand the junk that is Huawei, most of it blatently (and poorly) copied from Ericsson.

    At [carrier in S Asia] they failed for 3 weeks in a row to roll out one HLR only to barely succeed with thousands of CSR calls. But since they're cheap, the customer stuck with'm.

    Can't wait for the junk to go turtle in the US.
    • I have seen first hand the junk that is Huawei, most of it blatently (and poorly) copied from Ericsson.

      Not true, most of it is directly cloned from Cisco. ;)

    • It may or may not be junk today, however what a Cisco router does is not rocket science.

      It is about time that someone put Cisco under some price pressure. A little competition in the market can only be good for the end user.

      Another near monopoly to come crashing down.

      Cisco, time to pull your finger out.

  • China crash will be fun... (Score:5, Insightful)

    by otis wildflower ( 4889 ) on Sunday April 03, 2005 @03:07PM (#12127995) Homepage
    .. when they end up having to deindex the RMB in order to clean up their banking structure..

    http://www.asianresearch.org/articles/2263.html [asianresearch.org]

    Remember how the last Asian Crisis (tm) came about from lots of nonperforming loans of cheap money for phallic skyscrapers (among other things). Guess where the biggest concrete and steel dicks are these days? Shanghai, Chicom Hong Kong, and the coveted Taiwan ROC... I'm thinking Soros is chomping at the bit for the opportuninty to fuck China _and_ the US over in a spectacular fashion once the dike starts to crack...

    Given that and recent reporting of labor shortages in Guangdong..

    http://www.nytimes.com/2005/04/03/international/as ia/03china.html [nytimes.com]

    The next few years should be interesting indeed.

    At any rate, there's enough dollars in China to support an interesting shopping spree. I'm thinking they'll buy GM after they declare bankrupcy, and use those brands plus Chinese labor (and, hopefully, American labor after the UAW is destroyed by bankrupcy renegotiation) to enter the US auto market.
    • The China crash might be fun for a few moments in a sort of "now they finally get payback" kind of way, but wouldn't the collapse of one of the world's largest economies have repercussions that would be felt all over the world? I'm not an economist, but you seem to have a lot of insight into this. How might it affect those of us in the US or EU?
    • The crash will come after the '08 Olympics. They're on their toes now to make a good impression then. Wait and see.

      Of course, the ramifications of that crash for the global economy we're living in now are going to be absolutely disastrous.

  • Old news... happening with Korea as well (Score:4, Interesting)

    by Radi-0-head ( 261712 ) on Sunday April 03, 2005 @03:10PM (#12128018)
    Take a look at the rapid growth of Koren company Samsung in the global handset market. They came out of nowhere and now are in the top 3 of handset manufacturers along with established giants Nokia and Motorola.

    Hyundai is also doing a great job undercutting other auto compaines with surprisingly decent cars at excellent prices. 5 years ago I would never have considered owning a Hyundai, now I think they're just as good or better than some manufacturers.

    If you don't think China already has a major stronghold on the US, you haven't been to a Wal-Mart lately. It's a global market, like it or not.

  • US Telecom's? (Score:5, Informative)

    by Jonny_eh ( 765306 ) on Sunday April 03, 2005 @03:10PM (#12128020)
    FYI, Nortel, which is mentioned in the summary, is a Canadian company, not a US company. Canada != U.S.

  • Ring My Bell (Score:4, Interesting)

    by buckhead_buddy ( 186384 ) on Sunday April 03, 2005 @03:11PM (#12128027)
    I wasn't around during the breakup of AT&T but the limited monopoly given to the Bell in my area (BellSouth) makes me not sad for one moment that a serious market force will challenge their dominance. My local Bell just doesn't try to innovate anything until:
    • a competitor challenges them (offering new, better or cheaper services)
    • They fail at getting government to subsidize them (they don't always fail though).
    • They find that they can't negotiate or buy-off a limited truce with their new competitor.
    At this point, if all of these money-backed attempts to ward off competition have failed they usually don't even bother looking internally at their own talent. They'll try buying up a third-party and use them as the signal that they're serious and starting to compete (whether they actually are or not).

    I'd prefer that my telecom bills weren't funnelling money out of the country to an internationally owned competitor. I'd prefer to support my friends who work as sysadmins of the local Bell's subcontracting agency (since being downsized from Bell employees). But my local Bell doesn't seem to even attempt to innovate unless it has a serious challenger. Despite the coming months of political dogma, I'm glad that a serious challenger is attempting to enter the American market.

  • Good news for consumers (Score:3, Insightful)

    by Charles Dodgeson ( 248492 ) <jeffrey@goldmark.org> on Sunday April 03, 2005 @03:12PM (#12128033) Homepage Journal
    And that means bad news for already struggling telecom industry.

    Competition is good for consumers, and in the long run it is good for the industry as well. It's only bad news for the entrenched players.

    If China wants to tax its citizens so that it can sell me cheap telecoms products, I'm not going to complain.

  • Great....westerners give communist China financial assistance...then they try to put our companies out of business. What the hell are we doing business with a communist country with such horrendous human rights violations?

    China's ok...but Cuba's bad?

    • Re:Who says Communism doesn't work? (Score:4, Insightful)

      by Jeff DeMaagd ( 2015 ) on Sunday April 03, 2005 @04:21PM (#12128487) Homepage Journal
      Communism as an economic system or political?

      Communism as an economic system really hasn't worked out very often or very well on a national or global scale. China is now very capitalistic from an economic standpoint. China isn't refuting the arguments that communism's economics can't stand the test of time, I think they are proving that as they saw the need to shift.
      • Communism has never been tried on a global scale, which is part of why it hasn't worked out very well. China is exploiting capitalism, sucking up lots of dollars and technology and giving its people jobs. Then by sometimes ignoring patents and intellectual property, its companies gain technology and market share. What China should work towards is socialism, where it uses all the wealth its pulling in to better the lives of all its people.

        Now that we have computers and can better allocate resources, modi

    • Re:Who says Communism doesn't work? (Score:5, Insightful)

      by dalutong ( 260603 ) <djtansey@gma[ ]com ['il.' in gap]> on Sunday April 03, 2005 @04:30PM (#12128545)
      The world is a interconnected place. More so all the time. We don't really have choices as to who we will work with and who we won't work with. This is more true the larger/richer/more powerful and influential the country is.

      i think this is a good thing. there are too many weird ideas floating around among different world populations. i hope having to deal with them will spread the idea of ethnorelativism around some.

      also, regardless of your opinion of the government, there are still 1.3 billion people who shouldn't be excluded from the global dialogue. if you want to change the government, then find ways to increase financial stability, social mobility and general education.

      "social entrepreneurship" is a good place to start -- C.K. Prahalad has some good articles and books on it from a macro level. There are also many sources for learning how to do it on a microlevel. northsouthdev.org is one micro-level institution in nigeria doing social entrepreneurship. it was started by a Brit with 50,000 dollars. It has helped something like 1000 nigerians contribute to the economy. Micro Financing Institutes like his help local entrepreneurs who don't have the collateral to go to a normal bank get loans to start businesses. He has had a 0% default rate on the loans and has made a lot of money helping people.

      With financial stability, social mobility and quality education, change in the government can happen. If these "democratic norms" don't exist, any government that was more free would have a serious likelihood of collapse.

      I spent seven years in China. It is a wonderful place. I don't approve of everything the Chinese government does, but I do think that they are managing the economy well. I think that China will become an increasingly free country over the next 45 years.

      It is important to understand that different peoples want different types of lives. The Chinese don't dream of an American life. They would not want to obsess over politics as much. In fact, the interest in politics would be so low if there was a democractic government put in place now, it would collapse or be twice as corrupt for that lack of interest alone. That's one of the reasons why Russia's government has regressed. That's why a lot of new democracies regress. Without the democratic norms already being in place, democracy fails one way or another.

  • Americans mad at the Chinese (Score:5, Insightful)

    by gspr ( 602968 ) on Sunday April 03, 2005 @03:27PM (#12128113)
    I can understand your frustation, it's not hard. But come on, can you really be mad at the Chinese ("unfair") competition? They're essentially just doing what you taught them to do. Extreme capitalism backfiring?
    The best of luck to you, though. I have no wish to see the US come crashing down.
    • Fair competition with China would mean adjusting their undervalued currency that allows their exports to expload at a 40% reduced cost. It's hard to compete with you start at that level.
      • But it's not an inherently level playing field -- the US has a 150 year head start and near-global economic and military hegemony. From China's point of view, manipulating their currency is just a way of trying *to* level the playing field. "Fair competition" is a totally abstract concept that covers up what's really important -- the ebbs and flows of power.
  • The outsourcers now take over the market. Congratulations to all CEOs who shifted jobs to other countries, it is not like that has happened before with the car industry. Japan also started as an outsourcing base for General Motors and others.

  • Reminiscent of Hynix? (Score:3, Interesting)

    by DeathPenguin ( 449875 ) * on Sunday April 03, 2005 @03:39PM (#12128185)
    Does anyone remember what happened to the DRAM market tanked after Hynix had been recieving subsidies from the South Korean government? Basically, all major DRAM manufacturers (Samsung, Micron/Crucial, Fujitsu/Seimens, etc) suffered huge losses because of it and took a few years to recover. The point is that China is not the only state guilty of subsidizing a tech company. Hell, how long did the US gov't keep SGI on a respirator?

    Of course, being a computer building geek at the time I had a lot of fun shoving enormous amounts of RAM in my system for under a hundred bucks. Maybe this whole Huawei thing will mean I can afford a good cell phone for less than $200 without signing up for some rediculously restrictive service plan.

  • != bad news for ALL of the telecom industry (Score:4, Interesting)

    by G4from128k ( 686170 ) on Sunday April 03, 2005 @03:48PM (#12128249)
    It's only bad news for the hardware side of telecom. The services side would like nothing better than cheap equipment that boosts adoption and use of telecom. The cheaper the infrastructure, the higher the profits in service and/or the greater the adoption of services if they become less expensive to roll out.

    In some ways this becomes a battle between the best interests of the infrastructure makers (a small segment) and the infrastructure users (all the rest of the economy).

    The long-term impact is far less clear, however. The effect of cheap Chinese goods will depend on how the U.S. economy uses the less-costly telecom gear. If we only use it to download ring-tones while standing in the unemployment line, then it will be bad. But if businesses find growth-generating new innovations in business processes, services, and products that make use of cheap telecom infrastructure, then it will be a good thing.
  • and lack of foresight, I think that we in the USA are in big trouble, real soon.

  • Didn't Huawei steal Cisco software? (Score:3, Informative)

    by nixman99 ( 518480 ) on Sunday April 03, 2005 @03:50PM (#12128271)
    Is this the same Huawei that stole [theregister.co.uk] Cisco's software and sold it as their own? I guess that's one way to jump start your business.

    • Re:Didn't Huawei steal Cisco software? (Score:5, Insightful)

      by kvigor ( 66615 ) on Sunday April 03, 2005 @05:05PM (#12128752)
      Not just Cisco. I formerly worked for a certain very large US telecom equipment manufacturer, and Huawei was selling a unit that was bug-identical to one of ours. The story, as related to me, was that said large company attempted to sue in China (they weren't selling into the US at the time). Said lawsuit came to a screeching halt when it became apparent that the Chinese government was the primary investor and the eventual result of the lawsuit was therefore completely predictable.

      I am surprised to see that Cisco settled with them in US court. I expect the company in question, which has phalanxes of lawyers on salary, won't roll over so easily when it comes to defending the domestic market.

  • price or quality? (Score:3, Insightful)

    by kraut ( 2788 ) on Sunday April 03, 2005 @03:54PM (#12128310)
    From the summary: " There are parallels with auto industry and home appliances. It took a little while before prices became a determining factor and shifted growth away from North American vendors."

    I thought the problem with American cars in the 70s was quality, not (just) price.
  • If the Chinese govt. is subsidising Huawei to undercut the competitors and be a loss leader wouldn't the US be able to invoke anti dumping laws or something similar ?

  • I hate Huawei (Score:2, Interesting)

    by dalmiroy2k ( 768278 )
    I live in Argentina and I work for a major ADSL ISP. We used to have Cisco/Alcatel DSLAMs and DSL Modems but budget cuts made us switch to "Huawei". Huawei DSLAMs are an almost exact copy of Cisco's in terms of performance, but cost like 2 or 3 times less, and you can get a bulk of Huawei USB DSL Modems for a few dollars each (And then give it for free to new users). But, of course, there is no Huawei tech support (unless you can talk chinesse or are willing to wait a week for an automated response), you ha

    • Re:I hate Huawei (Score:3, Informative)

      by r_cerq ( 650776 )
      I work for an European telco, and we're also switching to Huawei equipment;

      Yes, they've blatantly copied other vendors (mostly Cisco and Nortel, but you can find references or behaviour matching almost every other vendor), but when you look at the price and performance... well, who cares if it's a copy?

      We completely disregarded their USB modems; they're crap. Their ethernet modems, however, are pretty decent, and cheap as rainwater. And the added bonus is: no drivers to mess with. Even if you want to add
  • Right. As if the US government never gives subsidies (tax breaks, sweet-deal contracts, research grants, etc.) to corporations and public/private partnerships. Without trillions of dollars of US government support for semiconductors, computers, telecommunications, airplanes, and networking, the US would not be a big player in any of those fields today.

  • Struggling ??? (Score:2, Insightful)

    by ilmdba ( 84076 )
    The telecom/automotive/airline/etc/etc/etc industries are NOT struggling. last time i checked (about 10 seconds ago) these industries are BOOMING.

    look around you. everyone has wheels/multiple cell phones/flies everywhere for the holidays/etc/etc.

    the problem is that even though everyone (almost) on this planet esposes global markets and free competition, if -their- company ends up on the short end of the stick (mainly due to the upper management of the worst run of these companies collecting millions in

  • AU market too (Score:3, Informative)

    by jonbrewer ( 11894 ) * on Sunday April 03, 2005 @05:57PM (#12129041) Homepage
    Looks like the first large-scale Huawei ADSL deployment will be in Australia:

    http://www.redherring.com/Article.aspx?a=11321&hed =Huawei+snags+Optus+deal/ [redherring.com]

    Optus will be deplying ADSL 2+ (24/3.5mbps) in 300 exchanges. Nice to see that the Aussies have granted competitive access to their copper. Too bad the fuckwits in New Zealand can't follow a good example.

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