The story of Huawei: How the company went from rags to riches

By Muneeb Ahmad on
March 13, 2018
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I bought my first phone back in 2008. Being the millennial kid, I already had a lot of interest in computers so what mobile brand to go for was definitely a no-brainer for me. Apple had just introduced its first ever iPhone but the phone wasn’t this popular and the market was pretty much dominated by other players like Sony Ericson, Blackberry, Samsung and of course Nokia. Now, barely ten years onward, as we see to it, the absolute market leaders have gone down the hill, shedding massive share even to the point of company sell-offs and new players have risen to the top.

Huawei, an all-employee owned company, is also one such brand that managed to make its space in a highly competitive market and grew from almost nothing to being one of the global market leaders. The company was founded by an ex-Chinese army man Ren Zhengfei in 1987. The story of Ren and how Huawei grew from Rag to Riches in mere 30 years is definitely worth remembering.

Zhengfei was born into a rural family and both of his parents were school teachers. Aiming to achieve a good name to both of his parents, Ren started working hard at a fairly early stage. Ren had to spend his early years in a small mountainous town in Guizhou Province but he was soon able to move to the Chongqing Institute of Civil Engineering and Architecture.

As he graduated, Ren first got himself into Civil Engineering industry and later joined the army. In 1983, the Chinese army disbanded the engineering division in which Ren had so far served. Empty handed, Ren tested a job or two when during 1987 he finally ended up founding Huawei, a company which now forms the largest telecommunication company in the world.

The company was established with a mere capital of $5,000 and only three employees. There was a big road ahead of Ren as the competition in this domain was already cut-throat. Huawei was one of the first companies introduced after China’s open door policy. The open door policy was a reform policy which formed the basis of economically-sound modern China and it greatly benefited Huawei in its development.

Hard work on the part of Huawei continued and, in 1993, the company was able to deliver its first major product which was digital telephone switch. Seeing the efforts and the subsequent developments, the company was able to secure its first big overseas contract from Hong Kong and, by 2004, the company’s international sales shot past all of its domestic sales.

The company has always put a lot of focus on research and development. In 1997, Ren visited the then top of the line IT companies in the United States of America where he realized the technological advancement difference that existed between the US and Chinese companies. Upon his return, Ren redirected the companies efforts and started focusing on research in the cutting-edge fields. In 2009, Huawei became the world’s top patent seeker enterprise.

The company focused on the company’s ownership among the employees and the company’s shares were all owned by its own employees. Interestingly enough, the founder of this company only possess a meager 1.4% of shares in the company as rest of the shares are owned by roughly 85,000 of its employees. Currently, the company has well over 170,000 employees. As much as 76,000 of these employees actively contribute to the research and development in more than 21 research and development centers which the company is operating in different countries.

As far as the today’s scenario is concerned, the company is the third largest smartphone manufacturer in the world. It also is a definite market leader when it comes to telecommunications and makes routers, broadband and 4G network products that are present across 170 countries.

 
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