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Chinese Huawei Takes on U.S. Telecom Market
ChipGuy writes "With funds on loan from the Chinese government, Chinese equipment giant, Huawei is undercutting big rivals like Cisco and Nortel, and is using money to buy its way into the U.S. market. Overseas in Europe and Asia it already has become a major force. There are parallels with auto industry and home appliances. It took a little while before prices became a determining factor and shifted growth away from North American vendors. Telecom will go through the same curve. Huawei is curently selling EVDO phones for about $130 and WCDMA phones about $250 which is about 30% than everyone else on the market. Huawei's agenda is pretty clear - get business and sales at any cost. And that means bad news for already struggling telecom industry."
I don't recall the details about Mr. Gore, but Senator Kerry's spending plan involving wasting a lot more money than Bush.
Don't blame Durga. I voted for Centauri.
Take a look at the rapid growth of Koren company Samsung in the global handset market. They came out of nowhere and now are in the top 3 of handset manufacturers along with established giants Nokia and Motorola.
Hyundai is also doing a great job undercutting other auto compaines with surprisingly decent cars at excellent prices. 5 years ago I would never have considered owning a Hyundai, now I think they're just as good or better than some manufacturers.
If you don't think China already has a major stronghold on the US, you haven't been to a Wal-Mart lately. It's a global market, like it or not.
- a competitor challenges them (offering new, better or cheaper services)
- They fail at getting government to subsidize them (they don't always fail though).
- They find that they can't negotiate or buy-off a limited truce with their new competitor.
At this point, if all of these money-backed attempts to ward off competition have failed they usually don't even bother looking internally at their own talent. They'll try buying up a third-party and use them as the signal that they're serious and starting to compete (whether they actually are or not).I'd prefer that my telecom bills weren't funnelling money out of the country to an internationally owned competitor. I'd prefer to support my friends who work as sysadmins of the local Bell's subcontracting agency (since being downsized from Bell employees). But my local Bell doesn't seem to even attempt to innovate unless it has a serious challenger. Despite the coming months of political dogma, I'm glad that a serious challenger is attempting to enter the American market.
The China crash might be fun for a few moments in a sort of "now they finally get payback" kind of way, but wouldn't the collapse of one of the world's largest economies have repercussions that would be felt all over the world? I'm not an economist, but you seem to have a lot of insight into this. How might it affect those of us in the US or EU?
"When the president does it, that means it's not illegal." - Richard M. Nixon
If you don't think there's slave labor in North America, you should investigate how much money the "prison industries" are really worth. It is, frankly, staggering.
Does anyone remember what happened to the DRAM market tanked after Hynix had been recieving subsidies from the South Korean government? Basically, all major DRAM manufacturers (Samsung, Micron/Crucial, Fujitsu/Seimens, etc) suffered huge losses because of it and took a few years to recover. The point is that China is not the only state guilty of subsidizing a tech company. Hell, how long did the US gov't keep SGI on a respirator?
Of course, being a computer building geek at the time I had a lot of fun shoving enormous amounts of RAM in my system for under a hundred bucks. Maybe this whole Huawei thing will mean I can afford a good cell phone for less than $200 without signing up for some rediculously restrictive service plan.
It's only bad news for the hardware side of telecom. The services side would like nothing better than cheap equipment that boosts adoption and use of telecom. The cheaper the infrastructure, the higher the profits in service and/or the greater the adoption of services if they become less expensive to roll out.
In some ways this becomes a battle between the best interests of the infrastructure makers (a small segment) and the infrastructure users (all the rest of the economy).
The long-term impact is far less clear, however. The effect of cheap Chinese goods will depend on how the U.S. economy uses the less-costly telecom gear. If we only use it to download ring-tones while standing in the unemployment line, then it will be bad. But if businesses find growth-generating new innovations in business processes, services, and products that make use of cheap telecom infrastructure, then it will be a good thing.
Two wrongs don't make a right, but three lefts do.
I live in Argentina and I work for a major ADSL ISP. We used to have Cisco/Alcatel DSLAMs and DSL Modems but budget cuts made us switch to "Huawei". Huawei DSLAMs are an almost exact copy of Cisco's in terms of performance, but cost like 2 or 3 times less, and you can get a bulk of Huawei USB DSL Modems for a few dollars each (And then give it for free to new users). But, of course, there is no Huawei tech support (unless you can talk chinesse or are willing to wait a week for an automated response), you have to compile your own USB driver for the modem unless you want the internet user mess around with VPI, VCI and DSL encapsulation modes, and while this shouldn't concearn any skilled programmer, the result of compiling your own driver for a cheap modem, using limited testing and questionable source code that NEVER updates only brings problems for the end user (incompatibility with some Windows versions, NO linux or MAC support, etc).
The crash will come after the '08 Olympics. They're on their toes now to make a good impression then. Wait and see.
Of course, the ramifications of that crash for the global economy we're living in now are going to be absolutely disastrous.
Flourescent (adj): smelling like ground wheat.
It may or may not be junk today, however what a Cisco router does is not rocket science.
It is about time that someone put Cisco under some price pressure. A little competition in the market can only be good for the end user.
Another near monopoly to come crashing down.
Cisco, time to pull your finger out.
In a nutshell, because if Congress pushed to make China play on a level field, like others said, it would have to make the USA play on that same field. But I'm adding that legislation to level the field wouldn't get passed unless it also tried to help the Chinese workers. After all, there's no way corporations will want to pay higher American wages. So to save American jobs, some additional part of the legislation would hurt upper management's salaries because corporations would have to pay more when foreign wages and or working conditions improve.
Capitalists will sell you the rope [with] which you will hang them[]
And the capitalists gleefully sold the USSR rope by the shipload.
And the USSR, while prattling that old saying, hung itself.
And the capitalists laughed all the way to the bank.
Then they came back and sold the people of the FORMER USSR all SORTS of stuff.
And bought stuff from them too.
And are still laughing.
Right along with the people of the former USSR.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way