Managing Asia

Managing Asia

Huawei's Ken Hu says 5G, AI will drive smartphone development

Why a marathon runner's mentality is important to Huawei

Huawei made a major push into smartphone sector just six years ago, but already sits behind only industry stalwarts Apple and Samsung in terms of global sales.

And by its tenth year in the business, the Chinese tech-and-telco behemoth expects both the smartphone market and its position to be very different.

"The first Apple iPhone was launched in 2007 and it has been about 10 years now," Ken Hu, one of Huawei's three rotating chief executives, says. "We anticipate that by 2020, there will be another big transformation for smart devices."

Hu points to the deployment of 5G - the next major update in telecommunication standards - as well as more intelligent devices driven by artificial intelligence (AI), and product feature improvements as key factors that will drive transformation.

Visitors crowd the Huawei stand at the 2016 CeBIT digital technology trade fair on the fair's opening day.
Sean Gallup | Getty Images

"We do not expect future technology to look, sound and feel as it does now … Smart technology, as well as cloud and AI have begun to merge so what we'll see in the future may be entirely different from what we have today," Hu tells CNBC.

Huawei plans to capitalize on these projections by improving its smartphone-related technology, Hu says. Strengthening brand presence and expanding retail and distribution channels are other plans the company is working on.

"We have our sights on the global market," Hu says. "China will make up a substantial portion but we're focused on global growth." His response to whether Apple and Samsung should be afraid of Huawei's rise? "Of course."

Huawei is also banking on its 5G expertise to set itself apart in the telecommunication equipment space. For Huawei, 5G is an opportunity … to strengthen our position as an industry leader," Hu says.

An attendee uses her smartphone to take a picture of her selfie on the camera app of a P9 smartphone launched by Huawei in India.
Udit Kulshrestha | Bloomberg | Getty Images

As it gears up for 5G, which will allow for greater data consumption via wireless networks, Huawei has adopted a long-term strategy committed to innovation, it's co-CEO says.

"We have announced that … till 2018, we will invest $600 million in R&D alone," Hu says, adding that 1,000 of the company's engineers and scientists are currently involved in 5G-related projects. Close to half of the company's 170,000 employees are engaged in research and development.

As for his thoughts on Samsung's Galaxy Note S7 recall woes, Hu says that the main takeaway for Huawei has been to ensure that such problems do not happen at the company. He also highlights the importance of improving quality control for Huawei's consumer electronics products from the development and innovation stage to the end-product phase.

"If the problems of our competitors result in an increase in our sales, it's a good thing for us," Hu says, "But we're more concerned about providing more reliable products."

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