Information and communication technology (ICT) giant Huawei is optimising its portfolio to boost its business resilience to cope with the uncertainty brought about by geopolitical tensions, the resurgence of Covid-19 and US bans.

The group ramped up its research and development investment to ¥141.89-billion, or 15.9% of total revenue, as part of wider efforts to remain afloat, address supply continuity challenges caused by US bans and pursue sustainability well into the future.

“We want to boost the resilience of our entire business and, since last year, we have been working to optimise our portfolio with this goal in mind,” says Huawei rotating chairperson Eric Xu, noting five strategic initiatives for the future.

Speaking at the company’s eighteenth Global Analyst Summit earlier this month, Xu said that, while 2021 is expected to be another challenging year for the company, it will also be the year that its future development strategy will begin to take shape.

“We spent most of our time last year responding to one ban after another. This year, we may have more time to explore our next steps and where we want to go.

“Huawei will continue making breakthroughs in basic science and pushing the frontiers of technology. We will take a vision- and assumption-driven approach as we work to identify new industrial requirements for ICT and tackle some of the biggest challenges facing the industry,” he says.

Huawei’s optimisation of its portfolio is a guiding principle and one of five major initiatives moving forward.

Xu said one of the priorities was to further strengthen Huawei’s software engineering capabilities, which the company spent $2-billion upgrading since November 2018, and seek out new business opportunities in the software sector.

The company will also invest more in businesses that are less reliant on advanced process techniques, Xu said, citing as an example optical technology use in other domains such as optical displays, augmented reality head-up displays, intelligent headlights and fibre sensing.

“In a nutshell, we are using existing technology to explore new opportunities and create new businesses. We want to deliver novel products to meet the needs of our consumers and enterprise customers, rather than giving them something that is already on the market.”

Investments in components for intelligent vehicles, especially autonomous driving software, will also be ramped up to help original-equipment manufacturers build better cars.

“Once unmanned driving becomes a reality, we will see disruption in practically all adjacent sectors and trigger the most disruptive industry transformation the world will see in the next ten years,” Xu explains.

Another major initiative is to maximise fifth-generation (5G) value and define 5.5G with industry peers to drive the evolution of mobile communications.

By the end of 2020, more than 140 5G networks had been deployed worldwide, with more than 330-million 5G users. Huawei says it was involved with more than 3 000 innovation projects and worked with carriers and partners to secure over 1 000 5G contracts from companies across more than 20 industries.

“We have to redouble efforts to drive consumer adoption and boost the 5G user base. By encouraging more fourth-generation users to make the switch, we can divert more data traffic to 5G networks. At the same time, we are optimising 5G solutions for businesses to drive their commercial adoption at scale and ensure that they benefit all sectors of society.”

Meanwhile, with revenue from smartphone sales dropping as a direct result of US supply bans, significantly impacting on Huawei’s phone business, a third major initiative focuses on providing a seamless, user-centric and intelligent experience across devices, such as computers, tablets, smart wearables and smart screens, which could bolster the smart home, smart office, easy travel, fitness and health and entertainment, besides others.

Through distributed operating system HarmonyOS and Huawei Mobile Services (HMS), Huawei will keep working closely with developers and partners worldwide to enrich the hardware and service ecosystems.

HarmonyOS is already being used in Huawei’s smart screens, smart wearables and head units and will soon be used in phones, with more than 20 hardware manufacturers having partnered with 280 application providers to build out the HarmonyOS ecosystem.

“In 2021, we expect to provide the HarmonyOS experience on more than 100-million devices from over 40 major brands,” says Xu.

Meanwhile, HMS is already the third-largest mobile app ecosystem in the world, with 2.3-million developers, including 300 000 from outside China, registered on the HMS ecosystem at the end of 2020.

“More than 120 000 apps have been built based on HMS Core and we have seen a tenfold increase in the number of apps launched on Huawei AppGallery outside China, compared with [the number of apps on the gallery in] 2019.”

HMS now serves over 700-million Huawei device users across more than 170 countries and regions around the world.

The company’s fourth strategic initiative will assist industries in reducing power consumption through technological innovation, in addition to reducing the power consumption of the devices and networking and communications equipment sold by Huawei.

“This is where we hope to make a unique contribution to emissions peaking and carbon neutrality in order to pave the way for a more low-carbon world,” he says.

Lastly, Huawei aims to effectively address supply continuity challenges amid the sanctions placed on Huawei by the US over the past two years.

Of particular focus is the semiconductor industry, where panic stockpiling has led to a global shortage in the semiconductor supply.

“We need to get the semiconductor industry back on track. To keep the situation from devolving further, rebuilding trust and restoring collaboration across the global semiconductor supply chain is crucial,” says Xu.