Unnamed US companies were also said to have experienced "odd or alerting incidents using Huawei or ZTE equipment." The result of that report was a US ban on all government transactions with either company without FBI oversight, followed by public condemnation from former CIA director Gen. Michael Hayden. Following their proposed merger, Sprint and Softbank told Intelligence Committee Chairman Rep. Mike Rogers (R-Mich.) that they would refrain from using Huawei equipment. Such assurances may have been necessary to avoid the House withholding its blessing on the merger.
Low enterprise impact
It's a safe bet that the exit from the US market of a manufacturer that most Americans can't pronounce won't cause much of a shakeup. An InformationWeek survey conducted in April of 450 business professionals in North America revealed only 12% of respondents had "good" or better knowledge of the products and services Huawei provides. A mere 6% of respondents perceived Huawei as a leader in core enterprise routers and data center switches.
In his comments in Paris, Zhengfei drew comparisons between Huawei and Cisco, his company's closest competitor. In 2003, Cisco accused Huawei of stealing its router source code and other intellectual property. That case was officially settled out of court, although Cisco legal chief Mark Chandler revealed that an independent expert concluded that Huawei copied Cisco's source code right down to the spacing in its comments. Cisco is believed to have just a five percent share of the Chinese infrastructure market, comparable to Huawei's share in the US.
American ignorance of Huawei stands in stark contrast to an emerging global reality where it is not just a contender, but a powerhouse. IDC ranks the company as the number three smartphone vendor, after Samsung and Apple. But an estimated 70% of Huawei's $35.35 billion in revenue for 2012 came from the sale of infrastructure equipment for telecom carriers.
While much of the press has credited Huawei's success to the continued economic growth of China itself, Western Europe has actually proven to be fertile ground for the company. In addition to the Paris R&D center, the company announced last October it is investing £125 million toward the development of a similar facility in Great Britain.
That investment came amid the objections of members of Parliament, who cited the House Intelligence Committee report. Zhengfei denounced those objections as examples of protectionism, which he believes is always due to fail wherever the Internet is concerned.
"Who can stop the progress of mankind towards an information-driven society?" he asked in the Paris press conference. "I think as long as there is traffic, there is hope." The growth rate of information is faster, Zhengfei said, than anyone's ability to divert traffic by means of protectionism. Because Huawei stands against protectionism, he added, whether you like it or not, when you use the Internet, you use Huawei equipment.
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