Huawei Technologies Co. Ltd. (/ˈhwɑːˌweɪ/; pinyin: 
Huáwéi) is a Chinese multinational networking and telecommunications equipment and services company headquartered in Shenzhen,Guangdong.[3] It is the largest telecommunications equipment manufacturer in the world, having overtaken Ericsson in 2012.[4]
Huáwéi) is a Chinese multinational networking and telecommunications equipment and services company headquartered in Shenzhen,Guangdong.[3] It is the largest telecommunications equipment manufacturer in the world, having overtaken Ericsson in 2012.[4]
Huawei was founded in 1987 by Ren Zhengfei, a former engineer in the People's Liberation Army. At the time of its establishment, Huawei was focused on manufacturing phone switches, but has since expanded its business to include: building telecommunications networks; providing operational and consulting services and equipment to enterprises inside and outside of China; and manufacturing communications devices for the consumer market.[5][6] Huawei has over 170,000 employees as of September 2015, around 76,000 of whom are engaged in research and development (R&D).[7][8] It has 21 R&D institutes in countries including China, the United States,[9]Canada,[10] the United Kingdom,[11] Pakistan, France, Belgium,Germany, Colombia, Sweden, Ireland, India,[12] Russia, andTurkey,[13][14] and in 2014, the company invested $6.4 billion USD in R&D, up from $5 billion USD in 2013.[15]
In 2014, Huawei recorded a profit of 34.2 billion CNY (5.5 billion USD).[16] Its products and services have been deployed in more than 140 countries and it currently serves 5 of the world's 50 largest telecoms operators.[17]
Name
Huawei is the official transliteration of the firm's Chinese name (simplified Chinese: 华为; traditional Chinese: 華為; pinyin:Huáwéi). The etymology of the character 华 is derived from "花" which means "flower". This is hinted at in Huawei's logo. The character can also mean "splendid" or "magnificent", but nowadays mostly refers to "China" or "(ethnic) Chinese" (see also Names of China). It is common for Chinese companies to use this word; another example being the Taiwanese companyAsus (simplified Chinese: 华硕; traditional Chinese: 華碩; pinyin: Huáshuò; literally: "Chinese-Eminent") that was founded back in 1989. The second character of Huawei's name, 为, means "action" or "achievement", thus Huawei literally means "Chinese achievement".[citation needed] It is pronounced "Wah-Way" according to a Gizmodo video that claims to provide the 'official' pronunciation,[18] as well as many other internet sources. However, "Wah-Way" is incorrect, and is an unfortunate perpetuation of a mistaken combination of the Cantonese and Mandarin pronunciations for the first and second characters, respectively. The Cantonese pronunciation is "Wah-Waii",[19] while the Mandarin pronunciation is "Hwa-Way" (IPA: [ˈhwɑːˌweɪ]). Although the company is based in the Cantonese-speaking area of Guangdong, the use of Huawei as the spelling for its name refers to the Mandarin pronunciation of "Hwa-Way".
History
Early years
During the 1980s, China's government tried to modernize the country's underdeveloped telecommunications infrastructure. A core component of the telecommunications network was telephone exchange switches, and in the late 1980s several Chinese research groups endeavored to acquire and develop the technology, usually through joint ventures with foreign companies.
Ren Zhengfei, a former deputy director of the People's Liberation Army engineering corp, founded Huawei in 1987 inShenzhen. Rather than relying on joint ventures to secure technology transfers from foreign companies (which were often reluctant to transfer their most advanced technologies to Chinese firms), Ren focused on local research and development to produce the switches through reverse-engineering of foreign technologies. At a time when all of China's telecommunications technology was imported from abroad, Ren hoped to build a domestic Chinese telecommunication company that could compete with foreign competitors.[20]
The company reports that it had RMB 21,000 in registered capital at the time of its founding. The Far Eastern Economic Review also reported that it received an $8.5 million loan from a state-owned bank, though the company has denied the existence of the loan.[5][21]
During its first several years the company's business model consisted mainly of reselling private branch exchange (PBX) switches imported from Hong Kong. Meanwhile, it was reverse-engineering imported switches and investing heavily in research and development to manufacture its own technologies.[5] By 1990 the company had approximately 500 R&D staff, and began its own independent commercialization of PBX switches targeting hotels and small enterprises.[22]
The company's first major breakthrough came in 1993, when it launched its C&C08 program controlled telephone switch. It was by far the most powerful switch available in China at the time. By initially deploying in small cities and rural areas and placing emphasis on service and customizability, the company gained market share and made its way into the mainstream market.[23] The company also developed collusive joint venture relationships with local authorities, whereby it would provide "dividends" to the local officials in exchange for their using Huawei products in the network. Ahrens writes that these methods were "unorthodox, bordering on corrupt," but not illegal.[5]
Huawei also gained a key contract to build the first national telecommunications network for the People's Liberation Army, a deal one employee described as "small in terms of our overall business, but large in terms of our relationships."[21] In 1994, founder Ren Zhengfei had a meeting with Party General Secretary Jiang Zemin, telling him that "switching equipment technology was related to international security, and that a nation that did not have its own switching equipment was like one that lacked its own military." Jiang reportedly agreed with this assessment.[5]
Another major turning point for the company came in 1996, when the government in Beijing adopted an explicit policy of supporting domestic telecommunications manufacturers and restricting access to foreign competitors. Huawei was promoted by both the government and the military as a national champion, and established new research and development offices.[5]
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