Striving for the vision of digital transformation

By Tom Fowdy
0 Comment(s)Print E-mail, April 7, 2021
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Photo taken on Sept. 3, 2020 shows a view of the booth of Huawei during the 2020 IFA fair in Berlin, Germany. [Photo/Xinhua]

Last week, Huawei held its annual press conference detailing the performance of the company. This year's conference was of particular interest because of the challenges the organization faced over the past year, including the COVID-19 pandemic which bruised the global economy and consumer spending, as well as sanctions from the United States government which sought to stifle the company's supply chain in its ability to procure key components. Despite these headwinds, it remains a prominent and innovative company with a growing position in the Chinese market, a world-leading amount of 5G patents and a forward thinking strategy which is credible, smart and sustainable. 

In a changing world, companies have to be flexible enough to adjust themselves to the challenges of uncertainty, and this is precisely what Huawei is doing. It has embraced its business categories in terms of carrier, consumer and enterprise under the common umbrella goal of "digital transformation" – the vision to embrace a world that is increasingly connected, increasingly online and exacerbated by the pandemic, more reliant on digital services, provisions and communications than ever before. Here is where the opportunity lies to help the company become resilient through pursuing the digitalization strategy. 

How will it do this? The press conference spokesman said that "ICT development is the foundation of our growth" – and in particular the creation of "cloud, connectivity and computing." These aspects are the mortar which glue Huawei's business divisions together. The company is already developing the fastest growing cloud service platform for enterprises in the world, combining both communications and consumerism. It is also developing artificial intelligence, as well as associated software ecosystems, such as Huawei Mobile Services, in order to house applications, programs and developers alike. Huawei Mobile Services already has 2.3 million associated developers worldwide and 120,000 applications.

These in turn connect various products and form a Google style model. After Huawei parted ways with its acclaimed Honor brand, its consumer business reconfigured itself by diversifying its product range which now includes laptops and smart watches. But this is not all, it is not simply reaching for what it is capable of achieving now, but also innovating with a view to the future. Huawei's net profit increased by 3.2%, but the slump in the increase was not so much facilitated by losses in business, but for the fact that it is now moving to invest record amounts of revenue and cashflow into research and development.

In 2020 alone, Huawei's R&D development constituted 141.9 billion yuan, 15.9% of its total revenue, with the goal of "aiming to remove bottlenecks in basic science and drive breakthroughs in cutting-edge technology." The report mentioned the word "research" 94 times alone. This includes 5G patents and ultra-high-speed signal processing technology, as well as artificial intelligence, automotive solutions, network security and more. All of this is done with the goal of not just broadening the company's scope as to how it can better connect businesses and enhance people's personal experiences, but also how the company can broaden its capabilities and better establish a path through the current situation. 

With every obstacle comes new opportunities. Huawei has responded with vision, energy and prudence to "unfair" efforts by the U.S. government to try and cripple its business. The company's response to sanctions has been to adopt a strategy of diversification. As it continues to capitalize on new opportunities and portfolios, united under the roadmap of "digitalization," there is no limit as to what it may yet achieve.

Tom Fowdy is a British political and international relations analyst and a graduate of Durham and Oxford universities. He writes on topics pertaining to China, the DPRK, Britain and the U.S. For more information please visit:

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