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Huawei founder Ren Zhengfei aims to make ‘first-class’ products with ‘third-class’ components

  • The strategy may lead Huawei to ‘abandon some countries, some customers and some products’ to cope with stifling US trade curbs
  • The Shenzhen-based company expects to focus on making other consumer products, as the supply of smartphone components tightens

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Attendees walk past Huawei Technologies Co’s signage at the opening of telecommunications industry trade show MWC Shanghai on February 23, 2021. Photo: Bloomberg
Telecommunications equipment giant Huawei Technologies Co is known in Chinese business circles for its “wolf culture” of being fearless and aggressive. Founder and chief executive Ren Zhengfei often recounts tales of bravery by Huawei employees in the face of extreme hardship and adversity, representing a stoicism that has become an essential part of the company’s self-identity.

Ren, 76, aims to further sharpen that focus to ensure Huawei’s survival. In a recent internal meeting, Ren said the company must try to use “third-class” components to manufacture “first-class” products amid stifling US trade restrictions.

“In the past, we have ‘spare parts’ for high-end products,” said Ren, according to a report on Wednesday by Chinese media Caixin citing memos from the company’s 2021 working conference. “But now the US has completely blocked Huawei’s access [to such components] and even commercialised products cannot be supplied to us.”

Ren said Huawei must “work hard to sell products and services that can be sold and [help] maintain the market position of [its]core business” in 2021. “In terms of market strategy … we must dare to abandon some countries, some customers, some products and some scenarios,” he said.

Huawei Technologies Co founder and chief executive Ren Zhengfei speaks during an interview in Taiyuan, in northern China's Shanxi province, on February 9, 2021. Photo: Xinhua
Huawei Technologies Co founder and chief executive Ren Zhengfei speaks during an interview in Taiyuan, in northern China's Shanxi province, on February 9, 2021. Photo: Xinhua
The strategy echoes Ren’s speech in June last year, when he indicated that Huawei must decentralise its operations, simplify product lines and focus on generating profit to survive US trade restrictions.
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