For almost four decades, Huawei has grown into one of the largest and most contentious tech companies globally. Initially focusing on networking equipment like base stations, routers, modems, and switches for global phone and internet services, it has since broadened its offerings to include wearable devices and smartphones, making it asignificant rival to Apple's iPhone, particularly in China.
Huawei boasts approximately 207,000 employees and a presence in over 170 countries and regions. In 2023, it achieved nearly $100 billion in revenue and over $12 billion in profit.
While Ren Zhengfei, the CEO and founder of Huawei, rose from humble origins to amass a net worth of $1 billion by 2022, the company faced significant controversy when the US accused it of stealing trade secrets.
The Huawei's Humble Origin
Zhengfei stated that Huawei's registered capital was around 21,000 yuan, which equates to just under $3,000 as of May 2024. He clarified that he did not receive any financial support from the Chinese government and instead gathered funds from external investors. Despite lacking experience establishing a company, the CEO reflected on their diligence and hard work to make their first money during those early years by reselling telephone switch equipment produced by a Hong Kong manufacturer.
As Huawei's business flourished, the Hong Kong company ceased supplying routers to Huawei, prompting the startup to begin developing its telecommunication products. Focusing on rural areas in China, where larger competitors were less dominant, Huawei sold telecom equipment capable of enduring harsh weather conditions, where it achieved sales of nearly $220 million by 1995, as reported by the BBC.
Huawei's Tireless Work Culture
During Huawei's formative years, employees recounted working tirelessly without leaving the building for nearly a month, as described by Lyu Ke, a member of Huawei's supervisory board in the company's docu-series. He mentioned that if they felt fatigued, they would take breaks for rest, shower, and return to work, as the initial period in overseas markets proved challenging when selling their equipment to customers.
According to reports, former employees disclosed that finishing projects at Huawei often results in hefty bonuses, sometimes surpassing base salaries, described as obscene amounts by one employee speaking to the LA Times in 2019. Huawei also allows employees to purchase company shares if they achieve performance targets. This compensation structure appears to counterbalance the company's demanding wolf culture, where some employees are expected to handle the workload of three individuals. Performance evaluations reportedly rank Chinese staff as A, B, C, or D, fostering employee competition. Those achieving an A rating receive double the bonuses compared to those receiving a B rating. On the other hand, employees receiving a C rating for two consecutive years face termination, a fate experienced by 10% of the staff.
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Series of Lawsuits Huawei Faced
In 2003, hardware giant Cisco filed a lawsuit against Huawei, alleging the theft of network router technology. Huawei later settled the lawsuit.
In 2010, Motorola filed a suit against Huawei, accusing the company of conspiring with several Motorola employees to steal trade secrets, which Motorola agreed to drop in 2011.
In 2017, a jury determined that Huawei had misappropriated trade secrets from T-Mobile in incidents occurring between 2012 and 2013.
The US and other nations have voiced apprehensions that Huawei's equipment might be utilized for espionage by China. In 2012, the US House of Representatives Intelligence Committee published a report advising American companies to steer clear of Huawei products due to cybersecurity worries. In 2018, AT&T terminated a deal with Huawei to distribute its smartphones across the United States. Tensions between the company and the United States escalated between 2017 and 2018, leading to restrictions by the Donald Trump administration preventing federal agencies, such as the Department of Defense, from using Huawei's telecom equipment.
In 2019, the US escalated its actions against Huawei, as former President Trump signed an executive order initiating steps to prevent the company from selling its equipment in the country. This blacklisting has been expanded over time, coinciding with heightened diplomatic tensions between China and the US.
Meng Wanzhou was detained in Canada and later placed under house arrest due to an extradition request by the US Department of Justice. She faced charges of bank and wire fraud in Iran by selling technologies through the company Skycom. Wanzhou awaited extradition to the US for three years. She was released from house arrest and returned to China as part of an agreement with the US Justice Department in 2021.
By early 2024, Apple had lost its dominance in smartphone sales in China, a critical market, to local competitors such as Huawei, with iPhone sales experiencing a decline. Huawei's Mate 60 Pro, priced at $960 and launched in 2023, garnered significant attention from consumers and analysts and emerged as a compelling alternative, especially following an iPhone ban imposed on Chinese government officials.
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