As pressure grows on its global telecommunications business following the US trade blacklist, Huawei is reportedly launching a new smart mobility business unit to produce electronics parts and software for autos, including cloud services.
The newly formed BU will offer end-to-end smart mobility solutions including information and communication technology (ICT) equipment and applications to car manufacturers, reported Chinese media citing an internal document issued by the company’s founder Ren Zhengfei last week and circulated on Chinese media. Huawei unveiled a set of auto industry solutions during its debut at this year’s Shanghai Auto Show in April, including cloud services, communication modules, on-board computers and sub-systems.
“The auto industry is undertaking a major change from being manufacturing-led to ICT-led. Automakers from China, Europe, Japan, and Korea are seeking help from ICT suppliers to take on the US players who are well ahead of their rivals in the intelligent vehicle market,” (our translation) Ren said in the statement.
Huawei declined to comment when contacted by TechNode on Monday.
The move comes as the Trump administration’s Huawei ban has started to sting. US tech giants including Google, Qualcomm, and Intel have cut ties with the company to comply with the law. Global smartphone sales for the Chinese telecommunication giant are expected to sink in the coming months as it transitions to selling new handsets absent Google Android software and services.
Huawei’s appearance at the auto show was well received by some analysts, who viewed the move into smart mobility as highly promising. “As the sale of electronic equipment in auto segment keeps surging, it is not surprising that Huawei, China’s strongest ICT solution provider, is marching into the smart vehicle market and positioning itself as a Tier One supplier,” (our translation) said CITIC Securities analysts in a recent report. The analysts forecast the company’s auto equipment and solutions revenue will reach $50 billion over the next 10 years, potentially catching up with the German car-parts giant Bosch in the global market.
Huawei has formed alliances with a list of automakers beginning late last year, including state-owned First Automotive Works (FAW), SAIC Motor, and Volvo, the Swedish car maker owned by Chinese automotive giant Geely. Huawei’s auto business team had been under the enterprise business group (EBG), but now directly reports to the company’s top management, alongside Huawei’s three business groups (Consumer, Enterprise, and Carrier), and Cloud BU, the company said in the announcement.