Huawei executive VP Eric Hu was quoted yesterday in the Financial Times as saying, “We are not interested in the U.S. market any more.” I reached out to Huawei for more information about its plans going forward.
Huawei spokesperson Jannie Luong sent a reply via e-mail.
“The comment that was made reflects the realities of our carrier network business in the U.S. Considering the situation we currently face in the U.S., it would be very difficult for the U.S. market to become a primary revenue source or a key growth area for our carrier network business. Nevertheless, our U.S. employees remain committed to providing quality services for our customers.”
I also asked if the company planned any layoffs in the U.S. Luong replied, “There are no planned layoffs; like any other company, we will scale our operations according to the current market opportunities.”
When I followed up to ask if Huawei would continue to actively sell in the United States or move into more of a support-only mode for existing customers, a second spokesperson replied, “We continue to sell in the U.S. in all three business areas: Device, Carrier Network and Enterprise.”
While the company may still have a sales presence in the United States, it seems clear Huawei will not aggressively contest the U.S. market, at least for now. Bloomberg Businessweek reported a Huawei spokesperson saying that the company doesn’t see the United States as a primary revenue source for the “foreseeable future.”
That’s not a surprise to Mike Fratto, analyst at Current Analysis. “Huawei has a strong data center and campus LAN portfolio, but it’s clear that they would have an extremely difficult time making in-roads with U.S. companies due to security concerns—real or imagined—about the products and the company leadership,” he said.
According to an InformationWeek survey of 454 IT professionals, the U.S. government’s ban of Huawei equipment had a strong impact on whether American companies would do business with Huawei: 37% cited the ban as a major concern, and 34% called it a deal breaker. A report detailing full results of the survey will be available in May.
Comments provided by survey respondents are also revealing. While most cite trust issues, some feel the company is being unfairly tarnished. Said one respondent, “I think every company should have a fair chance to compete.”
Others acknowledge that while the U.S. government’s actions might just be scare tactics to thwart a foreign competitor, they still won’t take a chance. “I am aware that the security concern may just be fear mongering,” wrote one respondent, “but can I put the security of my network on the line for a 50% chance? Nope.”
I reached out to Alcatel-Lucent, Cisco Systems and Juniper Networks for their reaction to Hu’s statement. All three companies had no comment.
