Sat, Sep 04, 2010 - Page 11 News List

Huawei bets on Google, smartphones in Europe

SECURITY CONCERNS The company’s close ties to the Chinese military have hindered attempts at expansion, forcing it to explore emerging markets, such as Africa

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Huawei Technologies Co (華為技術), China’s largest phone-­equipment maker, is betting Google Inc branding and smartphones targeting the lower end of the market will build its sales in Europe.

Huawei’s unveiling on Thursday of a £99 (US$152) Google-branded smartphone will help the company grab market share in Europe, Tim Watkins, the company’s western Europe vice president, said in an interview in London.

Huawei has not yet named the operators who will first offer the Ideos phone, which carries a Google logo and doubles as a portable wireless Internet hotspot.

The Chinese phone-equipment maker is trying to build market share and revenue outside of its home region while overcoming security concerns.

The Shenzhen-based company, founded by a former Chinese military official, failed in talks to buy two US assets in July on sellers’ doubts about regulatory approval, two people familiar with the matter said last month.

Google’s Android operating system became the third-best-­selling mobile operating system in the second quarter, with 17.2 percent of sales compared with 1.8 percent a year earlier, researcher Gartner Inc said. Apple’s iOS dropped to fourth place. Nokia Oyj’s Symbian and Research In Motion Ltd ranked first and second.

“We think the big growth is going to be in the Android, affordable end of the smartphone market,” Watkins said.

“Huawei has established a very good brand on the infrastructure side,” and is looking to extend that success to the device market, he added.

Apple, Taiwan’s HTC Corp (宏達電) and Research in Motion Ltd are competing for high-end customers with phones that cost as much as £599 without a contract. Android phones will outnumber Apple units by 2012, researcher iSuppli Corp said.

On the network infrastructure side of Huawei’s business, “there are various options available,” including setting up separate local subsidiaries, to allay government security concerns, Watkins said.

“The political stuff is clearly a challenge, but actually in many countries we can point to success,” especially in emerging markets like Africa, he said.

In addition to fellow Chinese companies like China Unicom (中國聯通), Huawei has won contracts to supply equipment to operators including Telstra Corp and Vodafone Group Plc.

In 2008, Huawei dropped a bid for computer-equipment supplier 3Com Corp after the US began investigating whether the deal could give China access to anti-hacking technology used by the Defense Department.

In April, India’s government blocked Huawei and ZTE Corp (中興通訊) from selling network equipment to domestic phone carriers because of security concerns, two people with knowledge of the matter said.

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