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Huawei, still trying to crack the US market, aims at 'less sensitive industries'

Security concerns raised by US are not an issue for enterprise customers, says Chinese company as it aims at the corporate tech market.
Written by Steve Ranger, Global News Director
Huawei's campus in Shenzhen, Chine. Image: Steve Ranger/ZDNet

Despite ambitions of boosting its enterprise business, Huawei is still finding the US a difficult market to crack.

The Chinese tech giant is perhaps best known for making networking equipment for telecoms operators, though in recent years it has also been building up its enterprise tech and smartphone businesses.

Speaking to journalists in Shanghai, William Xu, executive director and head of strategy at Huawei, said the company will work to boost its enterprise business in the US, but added: "The US market is big and it is important but for Huawei if we look at the global market, there are a lot of markets which are bigger than the US."

Xu said Huawei's sales in the US were "not worth mentioning".

The Americas makes up just 13 percent of the company's revenue, compared to 35 percent, 36 percent and 16 percent for China, Europe, and Asia Pacific respectively.

Xu said the company's lack of market share in the US is not a hindrance to its operations elsewhere, adding that the UK (where Huawei is already a key supplier to BT) and Germany are two potentially big markets for the company.

"If you look at China, Europe, and all the emerging markets the total volume of these markets is very big. In addition, the market is an open market," he said.

The US has historically proved a difficult market for the company. In 2012, the US House of Representatives intelligence committee published a report warning that the use of Huawei equipment in US critical infrastructure could "undermine core US national-security interests".

The company has denied these claims. It has also been accused of spying by the former head of the CIA, which it has also denied. A separate White House inquiry into earlier spying charges cleared Huawei.

Not long after the House of Representatives report, the revelations of mass internet surveillance conducted by the NSA revealed the extent to which the US uses technology for the surveillance of its own citizens.

When asked if he thought it was ironic that for all the criticism of Huawei it was the US that had been caught spying, Xu did not give a direct response but laughed and responded through his translator: "I think you get the answer."

Still focusing on the US

While the company's difficulties in the US may have provoked it to shift its focus to Europe, Huawei is still hoping to crack the US market eventually. Speaking at the company's cloud computing event, Raymond Lau, president of partners and alliances in Huawei's enterprise business, said the company is focusing on "less sensitive industries" in the US first, such as retail and education and noted: "The US market is never an easy market for Huawei."

Despite the House of Representatives report's concerns about both government and private companies using Huawei kit, Ron Raffensperger, CTO of the Huawei's IT solutions business, said enterprise customers are not raising similar issues: "We don't run into it that often in the enterprise business. We have lots and lots of customers that have very, very sensitive information that they have stored in Huawei systems without any problems."

Customers are much more concerned about everyday risks, such as making sure only authorised employees are getting access to the system, rather than some fear that the storage system "is magically going to decide to take some set of data and ship it off to another country. It's just not really the focus of their concerns," he said.

Steve Ranger visited China as a guest of Huawei.

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