Huawei's flagship store in Shanghai, China. Future Publishing/Getty
Huawei, the Chinese telecommunications company, has become one of the world's largest technology companies.
The company started out manufacturing equipment and then expanded into areas such as smartphones.
Here's how the company has grown to the point where it can compete with tech giants like Apple.
For nearly four decades, Huawei has become one of the world's largest and most controversial technology companies.
The Chinese technology giant started out as one of the world's leading makers of network equipment, making base stations, routers, modems, switches and other products that provide telephone service and Internet access around the world.
The company has expanded its product line to include wearable devices and smartphones that are a major rival to Apple's iPhone, especially in China.
As of 2023, the company had approximately 207,000 employees and operated in more than 170 countries and regions. In the same year, Huawei's sales revenue was approximately $100 billion and profits exceeded $12 billion.
According to Forbes magazine, Huawei CEO and founder Ren Zhengfei comes from a humble background but is worth $1 billion as of 2022.
Yet the company has been embroiled in controversy, with the United States accusing the Chinese company of stealing trade secrets.
How a small Chinese tech company became a rival to Apple and viewed as a national security threat in parts of the world.
Ren Zhengfei founded Huawei in 1987 at the age of 44 in his apartment in Shenzhen, China.
Ren Zhengfei is the 79-year-old CEO of Huawei. Reuters
Ren said Huawei's registered capital was about 21,000 yuan, or just under $3,000, as of May 2024. He said the company has not received “a single penny” from the Chinese government and is raising money from outside investors.
The CEO said he had no experience starting a company.
Huawei started out as a reseller of telephone switches made by Hong Kong manufacturers.
“We worked hard in the early days and made our first money,” Ren said in the Huawei documentary series.
As Huawei's business boomed, Hong Kong companies stopped supplying it with routers, forcing the startup to develop its own telecommunications products.
In the 1990s, Huawei focused on research and development of early communications products.
When Huawei was first founded, employees worked around the clock. Indranil Mukherjee/AFP via Getty Images
Because China's major cities were dominated by large corporations, Huawei sold telecommunications equipment to rural areas that could withstand harsh weather conditions.
By 1995, the company had sales of approximately $220 million, according to the BBC.
Liu Ke, a member of Huawei's supervisory board, said in a documentary series about the company that in the company's early days, employees would work around the clock for almost a month without leaving the building.
“If I feel tired, I go to sleep, take a shower and get back to work,” Liu said.
In the 2000s, Huawei decided to expand outside of China.
Huawei's first few years weren't easy. Costfoto/NurPhoto via Getty Images
The first few years in overseas markets were tough as we struggled to sell equipment to customers.
“After we launched Huawei, it was very difficult to ensure the survival of the company,” Ren said in a 2019 interview with CBS.
By 2000, international sales reached $100 million, and in 2005, international contract orders exceeded domestic sales for the first time.
As Huawei expands outside of China, it has begun to enter the consumer device market.
The Huawei U626 (pictured) was the company's first 3G mobile phone. Ricky Wong/MCT/Tribune News Service via Getty Images
In 2004, the company shipped its first mobile phone, the C300, which had features including basic voice calling and SMS, a text messaging service.
Two years later, the company aimed to enter the advanced mobile phone market with the launch of the Huawei U626, its first 3G phone with a color screen, camera and high-speed data connectivity.
In 2006, the company released a USB modem that could be plugged into a computer to access the Internet.
By the late 2000s, Huawei had achieved a series of financial milestones.
Although there were some tough times, Huawei survived into the 2000s. STR/AFP via Getty Images
According to Reuters, contract sales increased 46 percent from 2008 to 2009, much of it from overseas, and revenue rose to nearly $23.3 billion. The company was also looking to expand in the United States.
Following the success of its smartphones, Huawei has expanded into wearable devices.
Since the success of the mobile phone, Huawei has expanded into more smart devices. Michael Dalder/Reuters
In 2015, the company released the Huawei Watch, which combined typical watch functions with those of a modern smartwatch.
By 2019, the telecommunications giant appeared to be leading the 5G revolution, bringing faster wireless connectivity worldwide.
Huawei founder Ren Zhengfei will continue as CEO. AP Photo/Vincent Yu
According to the Los Angeles Times, the company had signed more than 30 5G contracts and deployed more than 40,000 5G stations around the world as of February 2019, demonstrating its global influence, and Huawei executives have claimed that the company is ahead of even the most advanced U.S. providers in developing the technology.
Huawei employees reportedly say that despite the tough working conditions, the salaries are excellent.
Huawei is known for its tough work culture. Tingshu Wang/Reuters
One former employee said completing projects would earn them large bonuses “usually above their base salary.”
“It's an exorbitant amount of money,” an employee told the Los Angeles Times in 2019.
Another employee told the media that Huawei gives employees who meet performance targets the option to buy company stock.
According to the LA Times' sources, the compensation was intended to offset the company's so-called “wolf culture,” in which some employees are expected to do the work of three people.
Performance appraisals reportedly rank Chinese staff as A, B, C or D, leaving employees to compete with each other to succeed.
A Shenzhen-based employee told The Times that employees who received an A grade received double the bonus of those who received a B. Employees who received a C grade for two consecutive years (which 10 percent of employees are required to receive) were fired.
Huawei's smartphones are among the company's most successful consumer products and currently rival Apple's iPhone in China.
The Huawei Mate 60 is comparable to the latest iPhones. Wang Gang/Getty Images
After the release of the iPhone, the company announced its first smartphone series, “Ascend,” in 2010 in an effort to enter the global smartphone market.
Two years later, Huawei launched the Ascend P1 S, which was said to be one of the world's thinnest smartphones at the time, and has since released high-end smartphones such as the Mate and P series, as well as lower-end devices under its offshoot brand Honor.
Still, Huawei's expansion onto the international stage has not been without controversy.
Huawei has faced serious accusations from multiple companies regarding confidential information. Costfoto/NurPhoto via Getty Images
In 2003, hardware giant Cisco sued Huawei for stealing network router technology, but Huawei eventually settled the case.
Then in 2010, Motorola sued a Chinese company, Huawei conspired with several Motorola employees to steal trade secretsMotorola agreed to drop the lawsuit in 2011.
And in 2017 The jury found that Huawei misappropriated T-Mobile trade secrets in a series of incidents that occurred in 2012 and 2013.
The US has deemed Huawei a potential threat to national security.
In 2019, President Donald Trump signed an executive order banning the import of Huawei products from the United States. Getty Images
The United States and other countries have expressed concern that Huawei equipment could be used by China for espionage.
In 2012, the U.S. House Intelligence Committee released a report urging U.S. companies to avoid using Huawei equipment due to cybersecurity concerns, and in 2018, AT&T terminated its nationwide smartphone sales contract with Huawei.
In 2017 and 2018, as tensions between the country and the company grew, the administration of President Donald Trump restricted the use of the telecommunications giant's equipment by federal agencies, including the Department of Defense.
In 2019, the US further stepped up its crackdown on Huawei, with former President Trump signing an executive order. China had been preparing to block sales of the equipment within its borders, after the blacklist was expanded and diplomatic tensions between China and the United States also rose.
In 2018, Meng Wanzhou, Huawei's chief financial officer and daughter of its CEO, was detained in Canada on suspicion of fraud and violating sanctions.
Huawei CFO Meng Wanzhou. REUTERS/Lindsay Wasson
Meng Wanzhou was detained in Canada and then placed under house arrest following an extradition request by the US Department of Justice to face bank and wire fraud charges. The US has accused her of evading sanctions against Iran by selling technology through Skycom Inc.
The CFO waited three years for extradition to the US.
In 2021, she was released from house arrest under an agreement with the United States and returned to China. Department of Justice.
Huawei continues to intensify its competition with the iPhone in China
Huawei's new Pura70 smartphone comes with three cameras, just like the iPhone Pro. CFOTO/Future Publishing/Getty Images
As of early 2024, declining iPhone sales have meant Apple has lost its edge in smartphone sales in its key market, China, to local rivals such as Huawei.
Huawei's $960 Mate 60 Pro will be released in 2023, surprising consumers and analysts as a viable alternative in the wake of the iPhone ban by Chinese government officials.
As if the Mate 60 wasn't enough, Huawei has also announced another smartphone series for 2024 called the Pura 70, which will start at $760.
Huawei did not immediately respond to Business Insider's request for comment before publication.
