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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."
Higher? Lower? Fucking idiots.
If you find this post offensive, don't read it! THINK ABOUT YOUR BREATHING! I am what I am because of how apes behave.
30% less?
30% of?
30% more?
30% crappier?
Come on!
--sig fault--
Too bad the US is:
a) violating the WTO rules currently.
b) too addicted to Chinese money to fund Bush's spending splurge/tax cutting spree to really bring any meaningful grievances against China....
Am I the only one who sees how insane Bush's spending policies are? Maybe it's not the wisest idea to become dependant on a country whose primary objective seems to be to destroy us...but then again, this country did elect Bush...twice....
Monstar L
As some have noticed... There was a lack of one word "LOWER" in the post. Here: "Huawei is curently selling EVDO phones for about $130 and WCDMA phones about $250 which is about 30% LOWER than everyone else on the market.
Chinese Hawaii takes on U.S. Telecom Market?
Damn communists! Undercutting big rivals, using money to buy their way into the U.S. market! Can't trust 'em!
You can't take the sky from me...
I have seen first hand the junk that is Huawei, most of it blatently (and poorly) copied from Ericsson.
At [carrier in S Asia] they failed for 3 weeks in a row to roll out one HLR only to barely succeed with thousands of CSR calls. But since they're cheap, the customer stuck with'm.
Can't wait for the junk to go turtle in the US.
--Good morning fellas; Hand me that thing; Boy, this work's hard; Guys, break's over.
.. when they end up having to deindex the RMB in order to clean up their banking structure..
s ia/03china.html
http://www.asianresearch.org/articles/2263.html
Remember how the last Asian Crisis (tm) came about from lots of nonperforming loans of cheap money for phallic skyscrapers (among other things). Guess where the biggest concrete and steel dicks are these days? Shanghai, Chicom Hong Kong, and the coveted Taiwan ROC... I'm thinking Soros is chomping at the bit for the opportuninty to fuck China _and_ the US over in a spectacular fashion once the dike starts to crack...
Given that and recent reporting of labor shortages in Guangdong..
http://www.nytimes.com/2005/04/03/international/a
The next few years should be interesting indeed.
At any rate, there's enough dollars in China to support an interesting shopping spree. I'm thinking they'll buy GM after they declare bankrupcy, and use those brands plus Chinese labor (and, hopefully, American labor after the UAW is destroyed by bankrupcy renegotiation) to enter the US auto market.
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.
FYI, Nortel, which is mentioned in the summary, is a Canadian company, not a US company. Canada != U.S.
- 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.
I just can not understand why the American government is allowed to fund Boeing, General Dynamics, several oil companies, and Halliburton. Is this not unfair to American and other countries corporations?
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
It is irrelevent if you think Bush spends less than would Kerry if Kerry would have a balanced budget.
The current deficits are >5% of GDP. This is insane. Compound that with the fact that no one saves any money in the US and you have a recipie for disaster.
I can understand your frustation, it's not hard. But come on, can you really be mad at the Chinese ("unfair") competition? They're essentially just doing what you taught them to do. Extreme capitalism backfiring?
The best of luck to you, though. I have no wish to see the US come crashing down.
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.
Is this the same Huawei that stole Cisco's software and sold it as their own? I guess that's one way to jump start your business.
Communism as an economic system or political?
Communism as an economic system really hasn't worked out very often or very well on a national or global scale. China is now very capitalistic from an economic standpoint. China isn't refuting the arguments that communism's economics can't stand the test of time, I think they are proving that as they saw the need to shift.
The world is a interconnected place. More so all the time. We don't really have choices as to who we will work with and who we won't work with. This is more true the larger/richer/more powerful and influential the country is.
i think this is a good thing. there are too many weird ideas floating around among different world populations. i hope having to deal with them will spread the idea of ethnorelativism around some.
also, regardless of your opinion of the government, there are still 1.3 billion people who shouldn't be excluded from the global dialogue. if you want to change the government, then find ways to increase financial stability, social mobility and general education.
"social entrepreneurship" is a good place to start -- C.K. Prahalad has some good articles and books on it from a macro level. There are also many sources for learning how to do it on a microlevel. northsouthdev.org is one micro-level institution in nigeria doing social entrepreneurship. it was started by a Brit with 50,000 dollars. It has helped something like 1000 nigerians contribute to the economy. Micro Financing Institutes like his help local entrepreneurs who don't have the collateral to go to a normal bank get loans to start businesses. He has had a 0% default rate on the loans and has made a lot of money helping people.
With financial stability, social mobility and quality education, change in the government can happen. If these "democratic norms" don't exist, any government that was more free would have a serious likelihood of collapse.
I spent seven years in China. It is a wonderful place. I don't approve of everything the Chinese government does, but I do think that they are managing the economy well. I think that China will become an increasingly free country over the next 45 years.
It is important to understand that different peoples want different types of lives. The Chinese don't dream of an American life. They would not want to obsess over politics as much. In fact, the interest in politics would be so low if there was a democractic government put in place now, it would collapse or be twice as corrupt for that lack of interest alone. That's one of the reasons why Russia's government has regressed. That's why a lot of new democracies regress. Without the democratic norms already being in place, democracy fails one way or another.
What comes first, finding a teacher or becoming a student?
Why exactly is the Chinese government allowed to fund this company?
Because American managers and CEOs are self-serving and would rather have a global playing field on which to profit instead of just the domestic market. You see they'd rather outsource their companies to save money, except for the management jobs. They get rich, most Americans suffer, and in the long run the country goes to hell becuase the school system falls apart.
Under the pure capitalism, there is no minimum wage, which does in fact mean that Nike and Levis can move their garment factories back here, and there's plenty of employment. But since the jobs pay 3rd world wages, the country becomes a third world nation where the middle class barely exists, the owners and managers live like kings, and everybody else takes it up the ass.
When I borrow, then I'm spending someone else's money and my future income. But I can default on that loan!
This is NOT saving money. Savings are when you have a liquid asset like cash, gold, stocks, bonds. Property is not a liquid asset. And loans are liabilities, NOT savings!!
In other coutries, like Japan, people actually save money. It is not uncommon for people to buy a car with cash. Heck, people can buy a house with cash. That is saving money.
When Japan's economy tanked, the situation is not catastophic. All that happens is people can lose money (purchasing power) in the inflation period.
In the US, the opposite is true. People buy everything with loans. What is most dangerous are 90+% financing of homes. If the housing market collapses thanks to high inflation thanks to collapsing US dolar thanks to trade deficit (see how deficits hurt the economy?), the mortages will be worth more than the property!! This can be catasrophic (banks going bankrupt!) which will bring down the economy into a depression much, much worse than in the 1930s (back then people didn't borrow money like they do now so it wasn't that bad :)
If the US doesn't improve its deficit situation (trade and fiscal), this collapse of the US economy can happen sooner rather than later. As soon as banks around the world start dumping US$ in favour of the EUR.