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Question 1: What are the key opportunities and challenges for Huawei's smartphone business in the future

Question 1: What are the key opportunities and challenges for Huawei's smartphone business in the future
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  Aishwarya Salkade Year 3 U1611174C Question 1: What are the key opportunities and challenges for Huawei’s smartphone business in the future? Huawei is a technology giant headquartered in Shenzhen, China that provides telecommunication equipment and sells consumer electronics, including smartphones. Huawei’s networks, numbering over 1,500, cover 1/3 of the world’s population. Huawei has invested a lot in research and innovation and continues to further its research in 5G technology. This would be a great opportunity for Huawei as companies with a reliance on connectivity such as transport or energy will have to pay for 5G patent royalties. Huawei has significant control over future development as they have the greatest number of Standard Essential patents in 5G. This gives them a competitive advantage for Huawei, before its rivals because they have the know-hows and a well-trained engineering team. 5G is not as prominent in many countries, but not long before it takes over every major city. This technology will enable ease of connectivity and efficiency, which is in line with Huawei’s vision of building a digital infrastructure facilitating economic growth in emerging markets. Despite its growth, Huawei is still perceived as a low-quality product due to country-of-srcin and their pricing. More prominently, Huawei has been under heavy scrutiny around the globe over concerns that its close ties with the Chinese government pose national security threats to the U.S, Europe and other countries. US lawmakers have accused the Chinese government of spying for trade secrets due to the ongoing trade war, for maliciously modifying sensitive information and also for bank fraud. In 2003, Cisco sued Huawei on infringing numerous patents and illegally copying software code. US representatives have warned telecommunication operators against working with Huawei. This has severely affected their reputation as AT&T also dropped selling their smartphones due to security issues. This has created a chaos as Australia, New Zealand and Japan have also joined US in banning Huawei’s 5G equipment to defend against in intelligence leaks and cyber-attacks. TPG Telecom (Australian company) had to withdraw their partnership with Huawei’s 5G mobile network. The problem also lies in the laws imposed by the Chinese government as companies have no choice but to provide the data if asked for it. This has created an unrest between the two countries as United States has charged Huawei and its CFO Meng Wanzhou with stealing trade secrets from a competitor in the US and defrauding banks in order to evade sanctions on Iran. Moreover, despite their investment in research they use us companies like Intel and Qualcomm to manufacture their equipment which would negatively affect their manufacturing process if Huawei did not take strict measures to improve the situation and try to make it under control. Some critiques have spoken against the backlash and claimed that US was trying to sabotage the Chinese companies and limit their expansion. However, considering how the matters have escalated it is difficult to ignore the number of times Huawei has been accused of stealing corporate secrets and obstructing justice.  Aishwarya Salkade Year 3 U1611174C Question 2: How can Huawei leverage on these opportunities and overcome these challenges? Firstly, Huawei must focus on building a pro-security brand image for western markets in order to erase the concerns for western markets. They should focus on a positive attitude and not indulge in negative remarks during press interviews as it creates a cycle of controversy’s . They can consider leveraging their R&D team for the future projects such as 5G to build a safe and sustainable ecosystem. Maximum number of patents would definitely be an advantage as compani es would be attracted to Huawei’s 5G technology and experience. It will be difficult to re-position itself In the US but they could start off with European countries first and work towards building a strong and distinctive brand reputation. Word of mouth affects purchasing behavior and also politics which is much needed in this geopolitical storm. In order to recover their image, they must promote charity work, and support education in technology for underprivileged children, therefore proving its commitment to people and not profit margins. Heavy marketing campaigns must be conducted in order to make Huawei acceptable again. However, it is important that it maintains transparency moving forward and takes initiative in gaining back the public’s trust. Huawei could consider hiring professional lawyers who can combat the press with statistics involving tech giants such as Facebook and google who have also had to pay a heavy fine in the past. Their in-house technology and research can ensure they build their own app store and also try not to rely on US companies for chips. This is a long term approach but would be better as Huawei would have complete control over its line of business. This will allow similar western companies to enter the Chinese market. Huawei has the resources to rectify its reputation and must keep it on high priority.
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