Now, perhaps, very few people in our country perceive Huawei as "another Chinese smartphone manufacturer", but all the same, the true scale of the company itself is very clear few. This despite the fact that on the world scale with the popularity and popularity of this brand things are different – it is enough to recall at least the recent news that Huawei managed to bypass Apple and take second place in the global smartphone market. With a view to acquaint the domestic consumer with the company, the Ukrainian office Huawei invited a group of journalists to visit the campus of the company and its production facilities in China – which we did not fail to take advantage of.
How it all began …
Start a story about Huawei is, perhaps, with history. By the standards of China, Huawei is already quite an "old" company: it was founded exactly 30 years ago, in 1987 Ren Zhengfei with a starting capital of only $ 3,500 in Shenzhen City, and she then occupied a small room in a small five-story building. Then this small fishing town had nothing in common with the present megalopolis and only began to turn into a business center after it was granted the status of a special economic zone in 1980 and businessmen from all over China began to arrive in it.
Started Huawei as a trading company and was involved in the supply of equipment for automatic telephone exchanges from Hong Kong, but within a couple of years she began to produce such equipment herself. In 1992, Huawei released its own automatic telephone exchange with the highest bandwidth in China at that time. Gradually, the company began to develop markets for telecommunications equipment in small towns and rural areas, and then took up the rest of the Chinese market. Huawei's expansion to the international market began in 1997 with the first foreign contract and the beginning of the production of equipment for GSM networks.
Over the past 30 years, the company has "grown" in size – now in Huawei employs more than 180 thousand employees around the world, with almost half of them (80 thousand) working in R & D. In total, the company has 15 R & D centers and 36 joint innovation centers dealing with a particular direction (for example, the device design center in London, the "aesthetic" center in Paris, the interface design in San Francisco, 5G in Munich, the research in Japan etc.). The company pays great attention to research and every year spends on them about 10% of its revenue from sales (over the past 10 years, R & D totaled about $ 45 billion).
What lives Huawei now
Huawei has a very unusual approach to managing the company. Founder Ren Zhengfei (who is already 72) is engaged only in strategic planning, and at the "tactical level" since 2012 the company is led … by a group of three successive CEOs, each of which is "at the helm" for six months. All of them initially work in different departments (finance, HR, R & D), and such a system, in the opinion of its founder, allows to bring a fresh stream to the management mechanisms and reduces the risks for the company's further development related to the long stay "in power" of a single
Another interesting point is that Huawei is a private company, but its shares are not traded on the stock exchange, while its founder owns only 1.42% of the shares, while the rest is shared between the Chinese employee mi – a kind of reward "for long service". If the employee leaves, the company, of course, redeems his shares back – perhaps this is one of the reasons why many years of experience in Huawei is quite common.
We started our introduction to Huawei with a visit to the Shanghai R & D center, but about this – in the next report. Today I would like to tell you about the visit of the company's campus – its headquarters located in Shenzhen, where about 70 thousand people work. The territory of the campus is huge (earlier, according to the guide, its area was about 2 km 2 but it is constantly expanding, and how much it occupies now, it is difficult to say) and more like a well-groomed park than a small town, which, in fact, is – with its quarters, in which are located research centers, test laboratories and even its own training center.
During the visit to the office Huawei we managed to communicate with several top managers of the company – in particular, PR-director of consumer products Ada Xu (Ada Xu) shared interesting statistics and answered a number of questions of our group. According to her, the increase in shipments of smartphone companies in the world grew from 3 million units in 2010 to 139 million in 2016 (in the first half of 2017, more than 73 million were shipped) Accordingly, according to IDC, the share of the world of the market in the second quarter of 2017, Huawei accounted for more than 11% (2% growth for the year), and growth in the premium category (models more than $ 500) was even more impressive – this year's share is already 14%, which is almost three times higher last year's indicator.
In the view of the average consumer, "Huaw ei are smartphones. " In fact, this is far from the case, it is enough to say that in 2012 Huawei became the leader of the telecom industry, surpassing Ericsson in revenue from sales and net profit. So, now the company consists of three large divisions: the Consumer Business Group (smartphones, tablets, laptops, etc.), the Enterprise Business Group (telecommunications equipment for corporate clients that are not telecom operators) and the largest – the Carrier Business Group, which works with mobile operators and manufactures equipment for wireless and fixed networks, telecommunications software, provides services for operators. Huawei works with most of the largest operators in 140 countries, including Kyivstar, which last year, on the eve of the arrival of 4G in Ukraine, began updating its base stations, replacing Ericsson equipment with Huawei products.
The exhibition hall in the Huawei campus:
Huawei also owns a chip maker, a subsidiary of HiSilicon Semiconductor, which develops ARM processors for its own use. The original line had a conventional name K3 (the first chipset was released almost 10 years ago), now the chipsets are released under the name Kirin.
The most interesting thing in a smartphone is, perhaps, its development process, and with a story about how Huawei creates new flagships, as well as answers to questions that interest us, Sheng Xing, head of the research department of the Huawei consumer business group, came to the meeting with journalists. He talked about the main R & D center dealing with top-end smartphones in Shanghai, about cooperation with Leica ("We previously thought that the main thing in mobile photography is clarity of the image, resolution and other technical details, but now we believe that the photo – this is the art "), and other nuances of creating modern smartphones.
He told, of course, about the latest development of the company, Kirin 970 (which was presented just a few days ago, in emya our press tour – within the framework held in Berlin IFA 2017 exhibition). Its main feature was a separate computing unit (the manufacturer calls it the Neural Processing Unit, NPU), designed for tasks related to the operation of neural networks, artificial intelligence and machine vision, including pattern recognition. The Kirin 970 single-chip system is manufactured using 10-nanometer technology at TSMC, has an area of about 1 cm 2 and consists of four ARM Cortex-A73 cores and four ARM Cortex-A53 cores. The first processor cluster operates at a frequency of up to 2.4 GHz, the second – up to 1.8 GHz. Also in the chipset is built-in LTE Advanced Pro (4,5G) modem supporting LTE Category 18 (up to 1.2 Gbit / s). The first smartphones to use the Kirin 970 will be Huawei Mate 10/10 Pro (the official announcement is expected October 16 in Munich).
Also in a small group interview, Sean Shen answered several questions, including your humble servant.
Question about the production lines of Huawei. How much are they automated, what kind of operations are completely performed by robots, and what tasks still require human participation?
Yes, most of the work is now automated, even the processes of testing the quality of cameras and loudspeakers, modules and packaging ( running ahead – the next day, during a visit to the plant, we were convinced of this with our own eyes, but about this – in the next report ). But as the capacity is further expanded, we will gradually automate these tasks.
How much time and money goes into developing a new smartphone model and how quickly does it go into production?  The development of the concept of a new model of the Mate level (dimensions, appearance of the device) takes 4-5 months, then the R & D stage goes on, in which a specific apparatus is being developed for 10 months. After that, he enters the markets around the world – this process takes about 3 months. The modern smartphone is a very complex device, therefore, Huawei is spending more than $ 100 million on the development of each flagship model.
When asked about his vision of promising technologies for the next 10 years, Mr. Shen replied that the future, in his opinion, for AI (artificial intelligence ) and AR (augmented reality). The smartphone will become even more intelligent and will play an even greater role in everyday life, combining reality and virtuality. That's why in the new chipset Kirin 970 implemented a special module, completely dedicated to processing tasks related to AI. As for the near future, he believes that the screens will continue to increase, and the question is in the search for such a form factor, in which they will still be convenient in the usual use. So, Huawei already has a dedicated development team (under the leadership, by the way, Sean Shen), who are working on the idea of a flexible display – and he believes that in 2-3 years such screens will become very popular. Glasses of augmented reality are potentially very interesting thing, but so far only in the long term, it is necessary to work out a concept that will make their use comfortable – this, in his opinion, will take at least three years. But in modular smartphones, Sean Shen does not believe – modularity reduces the size of the battery, plus it is not easy for the user to choose which modules he needs – so the manufacturer will better take this solution for him and provide a one-piece device with optimal characteristics.
Another top- manager of the company who was able to find time in his busy schedule to talk with Ukrainian journalists – vice president of Huawei's business group Jim Xu:
Asked about the location of the company's plants, he explained that despite the increased cost of production and the wages of workers that has risen in recent years, China still remains the best place to locate factories – in terms of efficiency, ease of quality control and logistics: "Look, even iPhones are manufactured here. We say here – we mean China, we say China – we mean Shenzhen. They are actually assembling nearby, at Foxconn plants, everything is nearby, all the components are manufactured in this area, and you do not need to take them from all over the world to assemble a smartphone from them in a factory somewhere in another country. " When Mr. Xu was asked in which countries the share of Huawei grows the most, he readily replied: "In Ukraine! Fair! This year we plan to put 3 times more smartphones in your country than in the past. We did not have such a thing in any country. " The main reason for this growth was the launch of 3G, which spurred users to transition from the so-called feature phone to smartphones – as a result, the capacity of the Ukrainian market began to increase much faster than other countries with developing economies. Representative of the Ukrainian office Kevin Chow, by the way, shared interesting statistics: at the end of 2015, Huawei was in the top ten most popular brands in Ukraine, a year later he entered the top 5, and in the first half of 2017 he already climbed to the top three.
All are interested in 5G – including those who do not even have 4G yet. It is not surprising, therefore, that one of the first questions to Jim Xue was the request to assess the readiness of mobile operators globally to switch to this technology. According to him, interest in 5G is, but due to the fact that the equipment for its implementation is quite expensive, most of the operators are cautious and assess risks, but some of them are already serious about investing in this direction – for example, the Chinese China Mobile, as well as operators in Japan and the US. Europe is not in a hurry yet, but a couple of European operators are already looking at 5G.
By the way, a significant part of the exposition in the exhibition hall of Huawei is dedicated precisely to 5G and demonstrative demonstrations of its advantages over 4G. Also here there is a perspective equipment, in particular, all-in-1 towers for dense urban development (built into a flashlight, with a police call button and a charging station for electric vehicles) and solar-powered rural towers:
What does the arrival of 5G for the average user mean, how will his daily life change? Gigabit is very fast, but the price will also be high, so the operators will have to figure out how to attract customers. A similar situation was at the launch of 4G – for example, in Europe and Turkey some operators launched unlimited tariffs, but soon because of the influx of users and increased traffic, they had to abandon this idea. In general, Jim Xue believes that for the end user the cost of traffic with the transition to 5G should decrease, but whether it will pay less than 4G is not a fact, because at such speeds it is difficult to resist the temptation to consume more. And, of course, they will have to update their phones – for example, Huawei does not have 5G-models in the current smartphone line (the first device that will technically support speeds of 5G, the company will have Mate 10).
This concludes the story of the acquaintance with Huawei, which took place on its campus, and in the next report, we will visit R & D center in Shanghai and production lines in Dongguan City, next to Shenzhen.