Analysis: CBR goes behind the scenes at Huawei’s Chinese campus in Shenzen.
100 billion connected devices. Although a somewhat incomprehensible figure for the human brain to visualise, it is, in fact, Huawei’s estimate for how many internet-connected gadgets will be in operation by 2025, a year that is also predicted to bear witness to the use of eight billion smartphones.
All of these devices will be helping mobile users consume a predicted 1.7GB of data every day, and it is meeting that consumption that is at the heart of the Chinese firm’s mobile strategy.
"We want to be the best in the world," boldly states Shao Yang, VP of marketing for Huawei’s consumer business. Shao is talking about its smartphones, of which 90 million should ship next year, but it’s also the general motif of a company that has long strived for perfection.
It was founded in 1987 by Ren Zhengfei when he set up shop in the special economic zone of the Chinese city of Shenzen. Ren started buying private branch exchange (PBX) switches from Hong Kong and selling them on into the Chinese market for profit. And thus, Huawei’s networking roots were born.
Almost 20 years later and Huawei is now the third-largest shipper of smartphones in the world, with that particular business being just one of three global concerns, the others being enterprise business, which was started in 2011, and the original network communications supply business, which has been Huawei’s mainstay.
All three sectors will play their part in the company’s future mobility vision.
The firm’s showroom displays the company’s latest networking and communication hardware, such as an array of equipment to boost connectivity for mobile devices in buildings and cities. Demonstrating that content streaming will be at the heart of what consumers will want from their mobile devices, most of the technology is set on improving the quality and speed of the data that consumers receive. For example, small, white boxes called picocells can be placed along streets and in buildings to boost wi-fi signal, and can already be seen in practice at German football team Borussia Dortmund’s stadium, ensuring fans have full wi-fi connectivity during matches. Other signal boosters are exhibited on mock-up lamp posts, envisioning future cities where no street corner is out of connectivity.
Huawei re-invests up to 10% of its revenue back into R&D, and some of that money is going into researching beam technology for 4G mobile users. In practice, it would lock a 4G signal onto users’ phones to keep them connected in urban areas – the beam following them around at no extra cost to the user.
A broadcast technology called Evolved Multimedia Broadcast and Multicast Service (eMBMS) also aims to change the way consumers stream via their devices, and Huawei has already signed deals with EE and the BBC to explore the role 4G can play in the future. eMBMS is designed to give mobile network operators a more efficient and cost-effective means of sending popular content to a large number of customers simultaneously over an existing 4G/LTE network. Live BBC content will one day be streamed using eMBMS, and in the near future, consumers may even be able to stream live sporting events much as they do today with on-demand services.
As mobile use creates more and more business opportunities for companies to monetise data services, Huawei is racing to meet that demand with big data and the cloud in its enterprise business.
The company announced a raft of new products at its 2014 Cloud Congress event that took place in September. Smart cities – urban guinea pigs that are pioneering the connected future – are prime examples of where IT solutions and networking communications equipment work together. Deploying cloud computing technology can lower the overall cost of service delivery, and enable quick scalability for the changing needs of the consuming public. Big data also plays a part in the development of smart cities by learning about how applications and devices are used and leveraging this information for optimisation strategies.
Speaking to CBR at the event, Jon Raffensperger, CTO IT solutions for Huawei, explained how big data will impact mobility. He said: "The impacts [will be seen] more in the apps you use on your smartphones – they will get easier to use.
"So there’s an app I get on my smartphone that will allow me to ask for a taxi and that app is getting smarter and smarter, but it still needs a lot of manual intervention. So this particular app’s philosophy is that it puts a message out to lots and lots of taxis, and I can kind of bid. I say: ‘I’ll pay you 10 yuan more than your standard fee if you can show up on time.’ And that message goes out to way too many taxis.
"[Ride-sharing service] Uber is a good example of a platform that uses big data. The earlier Uber systems blasted messages out to everyone in a geographical area, but over time it’s getting smarter and smarter about which drivers will take certain passengers to certain places, at certain times of the day. So the experience the user gets becomes more and more natural. Then the app developers get more revenue because more people use their apps."
These platforms could solve some of the problems rapidly expanding population and mobile user bases face, such as keeping properties safe, improving operating efficiencies of companies, and heightening the monetisation of users by supplying real-time geolocational advertising and relevant content delivered straight to mobile devices.
Huawei’s handset business may have started out modestly, shifting a mere three million phones in 2010, but the firm has now evolved into a smartphone behemoth.
Huawei reported that its smartphone sales for the first half of 2014 rose 62% year-on-year as it shifted 64.2 million handsets. It shipped 20.6 million smartphones to foreign markets in Asia, Latin America, Africa and the Middle East in the second quarter of 2014, an 85% year-over-year increase. Shipments rocketed 120% in Europe, 180% in Asia-Pacific, 275% in Latin America, and a whopping 550% in the Middle East and Africa.
However, despite being the third-largest shipper of smartphones in the world, it is some distance behind behind Apple and Samsung, commanding a 4.7% share of the global market, compared with Samsung’s 30.8% and Apple’s 15.2%. Huawei, though, is setting its sights on emerging markets to expand its handset business, areas that still have much potential when it comes to monetising the future of mobile connectivity. Huawei’s ‘Global Connectivity Index’ study has researched 25 countries and 10 industries, and surveyed thousands of CIOs and IT practitioners, on the growth of smartphone connections, among other metrics, and it’s clear there are plenty of opportunities in emerging markets. Countries such as Indonesia, India, Chile, Brazil, and Nigeria all scored highly on the ‘growth momentum’ spectrum for global connectivity, and it is in these locations where the next battles will be fought for the mobility market.