Huawei’s founder calls for a shift to software due to US sanctions

The Chinese tech giant’s hardware business is struggling due to US trade restrictions on tech deals

With embattled Chinese telecoms giant Huawei starting a pivot from hardware to software and cloud services, its founder is calling on the company to "dare to lead the world" in software development and exclude the US from the rest of the world.

Huawei's smartphone business is struggling due to US sanctions the Trump administration installed and the Biden administration extended.

The US sanctions on Chinese firms have impacted no company more than Huawei. The US labelled the telecoms giant as a security threat based on perceived ties with the Chinese government. The concern is China will use Huawei's telecommunications business for surveillance, but the legislation has instead impacted Huawei's smartphone business more than anything else

In a sign that Huawei wants to shift its business model away from hardware, the tech giant recently announced it's launching six new cloud products to take on the likes of Alibaba, Amazon, and Google. The newly announced cloud products, including containers, artificial intelligence (AI) programming assistants, databases, computing services, and infrastructure software, were revealed at the company's three-day developer conference in Shenzhen.

Now, in the latest sign of the company's massive shift to software, Huawei founder Ren Zhengfei told company staffers in an internal memo that Huawei will focus more on software development because that industry's future is "outside of US control and we will have greater independence and autonomy," Reuters reported.

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Because of Huawei's ongoing difficulties with the US, Ren urged the company to strengthen its position at home and build up its territory to the point where it could exclude the United States. "Once we dominate Europe, the Asia Pacific and Africa, if US standards don't match ours, and we can't enter the US, then the US can't enter our territory," Ren's memo said.

Because it'll be difficult for Huawei to design and produce advanced hardware in the short term, Ren's memo suggested the company focus on building software ecosystems, such as its HarmonyOS operating system and Mindspore cloud AI system.

Huawei recently announced a $200 million investment in its developer program, which aims to boost its software ecosystem and cloud services.

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