Huawei is stepping up its efforts in areas such as cloud computing and smart cars in the hope that software will become a larger area of its revenue structure in the future.
In 2019, Chinese tech giant Huawei was included in the US Entity List, which restricted access to some US technologies. At the same time, Washington also cut off Huawei’s supply of vital semiconductors.
Huawei’s pivot to software comes as its smartphone business has seen sales decline because of the aforementioned restrictions. On the other hand, behind Huawei’s push into software is also an attempt to isolate potential geopolitics and any other regulation from the US. Huawei hopes to expand the software sector in its future revenue structure Accordingly, Arcfox, a brand under the automaker BAIC Group, has launched a car with Huawei’s car technology. It is known that this new model owns a cockpit equipped with the HarmonyOS operating system launched by Huawei in 2019. Huawei has also advertised its HarmonyOS can work on various devices from smartphones to TV and car. As such, Huawei will not manufacture cars, but instead will focus on technology to power the cooperating car manufacturers. At the same time, on April 25, Huawei launched a number of new cloud computing products to challenge rival Alibaba in this segment. In a press release the same day, Huawei said it expects its focus on cloud computing to increase its share of its software and services business in the group’s total revenue. In pursuing sectors such as vehicles and cloud computing, Huawei will face challenges from some of China’s biggest tech companies. Such as Alibaba, Tencent are the leading companies in the cloud computing market in China. Baidu or Xiaomi are also “expanding” in the vehicle market. Therefore, Huawei’s decision to redirect takes a lot of time and resources. According to Neil Shah, research director at Counterpoint Research, “Huawei is doubling down on its transition to a software, cloud and services company. development just like Google “.
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