Huwaei gives less priority to U.S. market due to hostile conditions

Telecom Lead America: After drawing flak from Congress over rising concerns around the security of U.S. networking infrastructure, Huwaei now says the U.S. market is not  a strong focus area.

Reuters report that Huawei has also dialed down its long-term sales targets in enterprise networking by one-third.

In October last year, a US congressional report officially named Huawei and its Chinese peer ZTE as a threat to national security. Representative Mike Rogers, chairman of the House Intelligence Committee, suggested that the US government and private sector companies must shun Huawei and ZTE.

Company officials cited geopolitical reasons for its discontinued interest in the U.S.  market. Li Sanqi, Huawei’s chief technology officer for the company’s carrier group estimated that the U.S. accounts for about 30 percent of the world’s carrier business.

Huwaei has been Cisco’s most feared rival. Both companies allegedly locked horns over intellectual property litigation proceedings and the threats each other posed to their home country. Cisco severed ties with ZTE after an internal investigation suggested that ZTE was illegally selling Cisco gear within Iran.

Huwaei had invested heavily to build operations in Texas and California. The company employs over 1,000 employees at its U.S. headquarters in Plano, Texas, and several hundred more at a research and development facility in Santa Clara.

According to a report by a Infonetics Research, last year Cisco topped the list of worldwide router revenues while Huwaei took the second spot. Huawei’s approach of selling lower priced gear had Cisco chalking out a battle plan to stop Huwaei from chomping away at its market share. Anil Menon, Cisco’s president – globalization, called Huwaei’s policies ‘unethical’ and had commented, “We are going to beat them in solutions and innovations.”

Huwaei has toned down its long-term target for networking equipment sales to enterprises. Eric Xu, Huawei executive vice president and one of its rotating CEOs, said $10 billion seemed to be a more realistic target after assessing the current market situation closely.

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