Huawei's Efforts To Steal Apple Trade Secrets Include Employee Bonus Program and Other Dubious Tactics: Report (macrumors.com)

In a report published Monday, The Information [paywalled] has detailed tactics used by China's Huawei to steal Apple's trade secrets. These tactics include Huawei engineers appealing to Apple's third-party manufacturers and suppliers with promises of big orders, but instead using the opportunity to pry on processes specific to iPhone-maker's component production. From a report: According to today's report, a Huawei engineer in charge of the company's smartwatch project tracked down a supplier that makes the heart rate sensor for the Apple Watch. The Huawei engineer arranged a meeting, suggesting he was offering the supplier a lucrative manufacturing contract, but during the meeting his main intent was questioning the supplier about the Apple Watch. The Huawei engineer attended the supplier meeting with four Huawei researchers in tow. The Huawei team spent the next hour and a half pressing the supplier for details about the Apple Watch, the executive said. "They were trying their luck, but we wouldn't tell them anything," the executive said. After that, Huawei went silent.

This event reportedly reflects "a pattern of dubious tactics" performed by Huawei to obtain technology from rivals, particularly Apple's China-based suppliers. According to a Huawei spokesperson the company has not been in the wrong: "In conducting research and development, Huawei employees must search and use publicly available information and respect third-party intellectual property per our business-conduct guidelines." According to the U.S. Justice Department, Huawei is said to have a formal program that rewards employees for stealing information, including bonuses that increase based on the confidential value of the information gathered.

Comments

Re:Thousand grains of sand

[Anonymous Coward]

Why go to the effort of tearing one apart and reverse engineering it when you can just ask somebody for the info?

A friend of mine did a job interview at Huawei and the interview was basically "tell us how you would design a node-b". My friends response was "hire me and I'll tell you, but for an interview that's not an appropriate question". This was over a decade ago. This is well documented behavior by this company.

Re:Thousand grains of sand

[Anonymous Coward]

They're not interested in the technical components; China has always been good at replicating that portion. They're interested in the manufacturing process - how things are made, integrated, and put together. That's the part that China needs to learn.

China only really knows how to make things manually in many areas, and doing something complex, say like building a plane, or making your own apple watch is rather challenging without the understanding of how it is made. In short, the process of making and designing the product is as valuable as the product itself to China.

Re:Thousand grains of sand

[BLKMGK]

Chances are the Chinese build the watches so the actual assembly is something they could get more easily at home but some of the specialized sensors are going to be much more difficult for them to figure out.

Anyone having anything built over there has to be damn careful! A friend has some automotive parts built over there. He intentionally designed the parts so it's not obvious what they will be used in and he designed them to fit more than one application with just some machining needed to fit one car or another. He told me that he bet it wouldn't be more than 3 months before they would be trying to sell his stuff. Sure enough parts showed up on Ali-Baba within 2 months! Jokes on them, they don't know about the needed machining he only did in-house and those parts aren't going to fit jack shit! :-) He had a good laugh over it but it was really surprising to see how fast they figured out what this was for and tried to sell it. There's a saying, their manufacturing plants run three shifts, two for you and one for them and it doesn't seem to be far from the truth...

Re:Thousand grains of sand

[rilister]

I don't mean to be rude to you, but that is how a lot of people outside of product design and manufacturing think.

As an (ex)engineer, I'm often more impressed by *how* Apple (and their suppliers) make things than *what* they make. For example, the (steel) front bezel on the original iPhone was something that looked basically unmanufacturable to me: for a start, you can't hold the same tolerances on a steel casting as a plastic part, so it was astonishing that the back plastic clamshell and the steel bezel met almost seamlessly.

Turn out that Apple were making the back clamshell in a number of different sizes (three, I hear) and the bezel in a single size. They finished the bezel and then used an optical system on the production line to pick out which parts would fit with which plastic clamshells.

It's an extremely unusual process that involved a lot more up-front investment in technology and process, but gave the result their designers wanted and the customers thought was 'pretty neat'. So Huawei want to know about those optical systems, as well as what's inside an Apple watch.

Tear-downs won't tell you anything about a lot of the most interesting solutions that a designer had to devise: Toyota used to famously say that they weren't designing cars, they were designing a process to make cars.