Huawei bids high, loses hard on two major US assets
By Darren Murph 
posted August 5th 2010 4:07AM
posted August 5th 2010 4:07AM
Huawei has been kicking for well over two decades, and while a great deal of its business revolves around the enterprise, the company still has a presence in the consumer arena (most recently with its S7 tablet). But for whatever reason, it's having one bear of a time breaking into the US acquisition game. According to a pair of people sourced by Bloomberg, Huawei wasn't selected as the winning bidder of two large US assets in recent months despite having offers of "at least $100 million more in each case." Ouch. As the story goes, the sellers (2Wire and Motorola) "doubted Huawei's ability to win US government approval," possibly because of the founder's prior role as an official of the People Liberation's Army. It's also not the first time that Hauwei has been deterred in the US; the outfit dropped a bid in 2008 for 3Com after America began "investigating whether a deal would give China access to anti-hacking technology used by the Defense Department." 'Course, given the existing legal trouble between Huawei and Motorola right now, we're not sure a +$200 million bid would've sealed the deal on its recently hawked wireless equipment unit. Hit the source link if you're down for a serious read. Mystery, drama, deceit -- it's all there.
This is the type of story on Engadget that nobody cares to read.
@rhimbu
Why did you read it?
@rhimbu
Not true, it is important to know where your gadgets come from (for example Apple's draconian control over it's manufacturers), and who is or is not allowed to do business in the "land of the free" (those same manufacturers not being allowed to compete in the USA).
see heres the problem, this is an excellent business article and one of the better articles on engadget. But most engadget readers are clueless about businesses and how they work. ex. they think the kin was a failure. it was an internally killed project that was released as part of a binding contract.
@rhimbu
I enjoy hearing about this type of thing.
@ok1 Google shitty programming #1 Then it should be in engadget business. #2 The kin was not an innovative concept. I think that if you dug deeper you would have found disappointing motivations for creating the kin. Say what you will about apple but you know that their engineers are trying to change the world and not just collecting a paycheck.
@rhimbu That stall looks more expensive than the person who might be sitting there. They got rid of the person and kept the stall.
@ok1 Google shitty programming
+1 for not trolling
@ok1 Google shitty programming KIN isn't a failure because it was a device done to satisfy a contact? What, it can't be both?
Every Hiptop (Sidekick) done after MS acquired Danger in 2008 was done due to a contractual obligation. This means both the 2008 Slide replacement and the 2009 LX (the one with the high res screen). MS wanted to cancel all Hiptops from the moment they bought Danger, but they couldn't do it because they had to produce two more devices for T-Mobile.
And these devices they made were good devices and greatly outsold KIN. They even outsold KIN during the period KIN was released, even though there hadn't been a new Hiptop in a year.
So, you need to learn about business. KIN was a failure. Just because you have a contractual obligation doesn't mean you can't do a good job of it. Under MS, Danger could have produced a far better device than KIN for Verizon, if MS simply had managed the project correctly. But they didn't.
Finally, I'm not even sure KIN was a contractual obligation anyway. None of my friends at Danger mentioned it being one. I'll ask about it next time it comes up though.
MS fumbled KIN on their own. Some even say there are those within the company whose careers benefited from making KIN a disaster. All I know is it was a huge waste of MS time and money to buy out Danger just to lose all the employees and spend a pile of money making a piece of crap like KIN. They spent $750M and the only things they accomplished were to put a minor competitor out of the market (Danger) and make themselves look like idiots.
@rhimbu
trying to change the world!? The fuck3rs are trying to change the way you program apps, the way you hold your phone, the way you should experience the internet, you are a little high on the apple coolaid. What the should change is their ridiculous app approval process and get some cues in antenna designs
so just screw the states and concentrate on the rest of the world - works well for nokia
@mrqs
It works for them here... virtually all non-Telstra HSPA modems here are Huawei's of some description, mainly E160's.
i bet someone is going FUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU
Why is Huawei's ownership a problem? Lenovo is partly owned by the Chinese government and the US government was OK with them buying IBM's PC division
@ChrisSsk
Possibly also something to do with their legendary disregard for international patents (whilst simultaneously being one of the largest single patent filing entities on the face of the planet).
This article belies the truely collossal nature of Huawei's international operations. They might not feature as a retail name, but their tech is all over your life.
@ChrisSsk
Ownership is not a problem but security concerns are, and telecommunication M&A have other tighter regulation than other areas. Alcatel for instant had to sign a mitigation agreement to acquire Lucent in 2006.
@ChrisSsk This is about protectionism, and everyone knows it. It's the same reason why India is trying to block Huawei- to let their own telecommunications industry develop. The US doesn't want the Chinese to start dominating high-value industries that have been traditionally dominated by the Europeans, Japan and the US. Huawei is just doing too well now, winning innovation awards, undercutting competitors and according to the Europeans- offering similar levels of quality at the same time.
Huawei has done everything it can to convince the US government that it's not a Chinese spy operation, etc, and apparently the ONLY reason Huawei is a concern is because the founder used to be an army officer, but the US can proclaim "national security" concerns anytime she wants in the name of protectionism.
@ChrisSsk
I don't know about the 2wire purchase but here was definitely no way Huawei was going to win buying Motorola's assets that they were selling, lol, regardless of the price.
Last time I checked, Motorola was suing Huawei employees for stealing secret documents or something. That's pretty stupid of them to approach Motorola, especially with something like that going on.
@Dest
Go ahead - try doing legit business in China and see how long it takes for your assets to be stolen. If you're lucky, you won't end up in People's Prison.
@Lord Grimthorpe We're talking about a MNC here who wants to LEGALLY acquire US companies and therefore LEGALLY acquire their technology.
And to respond to your (irrelevant statement), yes there's thousands of MNCs operating in China without getting all of their assets stolen including ones with very sensitive operations like Boeing, Microsoft, and GE.
@Plazmic Flame
In business people don't hold grudge. At least for traditional business man.
@Dest
They can convince all they want but with the political friction between PRC and USA. Huawei can't go further on highly sensitive sectors of the US gov't. Plus one thing, where did you get that Huawei dominates the Japanese and European Market. It must be the 99 cents store.
its Huawei, not Hauwei, zzzzz c'mon engadget, no news is good news?? -__-
I thought they just make come pocket change off of clearwimaxltewire/sprint a few hours ago with LTE testing in phoenix.
lol at "loses hard on"
It's interesting because Huawei is a entirely private company, all the way from its establishment, on the other hand Lenovo was founded and still partially owned by the Chinese Academy of Science. I guess the only reason Huawei was picked is because its founder Ren Zhengfei once served in the Chinese military, that's about it.
@hmmwv
It is because it is Telecom. If the Chinese government says give us a back door and a kill switch for every telecom platform in every country. Huawei will comply. That is the concern.
Humorously, everything is still manufactured in China so it's not like they couldn't do a little of their famous reverse engineering and maybe throw some back doors into your hardware anyway.
People's Liberation Army*