"China's Huawei Technologies Co. has seen its 5G business suffer because of restrictions imposed by the U.S. and other countries. But its booming software business is throwing the telecom giant a lifeline.
Huawei's enterprise business group has emerged as its fastest-growing division recently, as the company's handset sales plunge and it faces setbacks in its business with telecom operators. Several countries, led by the U.S., have banned the use of Huawei equipment in 5G networks, and the U.S. has also imposed broad controls on the use of American technology by the company, blocking its acquisition of many advanced chips.
Huawei's wide-ranging business division sells cloud services, software and infrastructure to businesses, governments and other institutions -- and doesn't depend as heavily on foreign chips and other components. The division grew 23% in 2020 -- the most recent year for which the company has released financial results -- bolstered by booming growth in its cloud-computing revenue.
Huawei has emerged as a major competitor in cloud computing in China, with 17% of the market in the third quarter of last year, making it the second-largest provider of cloud services in the country, according to market tracker Canalys. It was behind Alibaba Group Holding Ltd., whose share stood at 38.3%.
In addition, Huawei has said it has seen strong demand for technology used in smart cities and other digital infrastructure services for businesses and governments.
Huawei executives have said the company is reorienting toward software, autos and other business areas that don't require as many foreign chips.
"Our overall strategy and specific initiatives are all developed to ensure that we could survive and develop while remaining on the entity list for a long time," Eric Xu, a senior Huawei executive, said during a press conference last year, referring to the U.S. export restrictions." [1]
1. 5G Technology (A Special Report) --- A Lifeline for Huawei: As its 5G business suffers, its software business is booming
Strumpf, Dan.
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 14 Mar 2022: R.3.
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