Revolutionary Measures

Huawei – communicating innocence?

For this week’s blog it was a hard choice between focusing on what the rise of The Independent Group means to political PR, and how Chinese communications equipment giant Huawei is meeting its own communications and PR challenges. Given British politics is likely to have changed over the next week, and we’re currently in the middle of telecoms industry shindig Mobile World Congress (MWC), I’ll go for the Huawei option.

In many ways Huawei is a victim of its own success – from a brand that nobody knew how to pronounce a year ago, it has rocketed into the public consciousness, although not for all the right reasons. Allegations of potential backdoors in its communications kit that could allow the Chinese state to spy on data have led Donald Trump to call for it to be banned as a worldwide supplier to future 5G networks (Australia and New Zealand have obliged). At the same time its CFO has been arrested in Canada at the behest of the US, being accused of sanctions busting, and an employee arrested in Poland for alleged industrial espionage.

two person standing under lot of bullet cctv camera

Photo by Burst on Pexels.com

And how has it responded? Essentially it has come out swinging, in a way that is either very confident, very arrogant or a combination of both. At MWC it has signalled that it wants to break the Apple/Samsung high end smartphone duopoly by launching one of the world’s first foldable phones, the Huawei Mate X, just a week after its Korean rival announced its own model.

It has also used MWC to go on the front foot and completely deny that there are or ever will be backdoors in its products, with its chairman Guo Ping stressing, “We don’t do bad things” and describing US accusations of security issues as lacking any evidence. Given the importance of 5G to a whole range of innovations, such as the Internet of Things, driverless cars, and being able to download a whole film in 6 seconds, questions about security are valid, whoever is providing the kit. But by going on the front foot and calling for industry solidarity, while having a pop at Trump, Huawei seems to feel confident that it can win doubters round.

And this isn’t the total of its comms strategy – there’s been a huge rise in glossy print advertising emphasising its trustworthiness (following a recent Facebook tactic), and it has been touting its relationship with Britain’s communications security agency, GCHQ as a model to follow. Under a partnership, GCHQ has been testing Huawei’s technology and will report back on any issues it finds. However, this has been undermined by a hardening of rhetoric, with GCHQ head, Jeremy Fleming, stressing the need to understand the opportunities and threats that China’s technology advances provide.

From a market position it is easy to worry about Huawei, as it has grown rapidly to a position of power in a key global industry as it is about to adopt new technology. Unlike other Chinese companies such as JD, Tencent and Alibaba which are focused on their domestic markets and developing companies, Huawei is unashamedly looking to lead on a worldwide scale. Not for nothing does its name translate as “Chinese Achievement”. And at time when we’re getting more conscious of our privacy, both individuals and governments are much more focused on who has access to our data. Despite its communications so far, Huawei hasn’t convinced security experts or even the general public of its benign intentions – it is difficult to prove a negative in an age of conspiracies and social media. My advice? Focus on openness and innovation, and the benefits of 5G, build relationships with the right experts and invest locally to get governments on side. And if you can sort out Brexit, you can spy on my communications all you like………….

February 27, 2019 Posted by | Marketing, PR | , , , , , , , , , , , | Leave a comment

Selling out too early

Cambridge is rightly highlighted as one of Europe’s biggest innovation hubs, particularly when it comes to commercialising ideas that began in the research lab. This has spawned a huge biotech sector, and helped create a series of billion dollar tech companies that lead their industries, such as ARM and Cambridge Silicon Radio (CSR).

The University of Cambridge has the largest un...

The Internet of Things (IoT) has been identified by many commentators as a key emerging market – and one where Cambridge has the ecosystem, experience and ideas to play a major role. So the news that IoT pioneer Neul has been sold to Chinese telecoms equipment behemoth Huawei depressed me. Not for nationalistic reasons, but simply due to the low reported purchase price ($25m) and the fact that the company has cashed out so early in the growth process. While there was a fair amount of PR spin around Neul’s progress to date, I genuinely believed it could join the billion dollar Cambridge club by developing its technology and building alliances and routes to market.

At the same time, Cambridge Silicon Radio is mulling a multi-billion pound sale to US firm Microchip Technology, reducing the number of major, independent, quoted Cambridge companies. Obviously investors and founders do look to realise their profits at some point, but it is important to balance this by looking longer term. While those that put money into Neul no doubt got a decent return, think how much more they’d have received if the company had been allowed to grow and exploit its market position.

I’m not alone in taking this stance. Cambridge Innovation Capital (CIC), the University of Cambridge-backed VC fund, recently warned its portfolio companies against selling out too early and promised to provide long term, founder friendly, capital to help grow the next ARMs and CSRs.

So what we need is the support, both financial and in terms of time, that gives companies the ability to achieve their potential. Not all of them will make it, and many will be niche players that logically fit better within bigger companies – but at least they’ll have had the ability to aim for the stars before finding their real place in the world. Otherwise Cambridge (and other parts of the UK tech scene), will simply act as incubators that turn bright ideas into viable businesses that can be snapped up and digested by tech giants looking for the newest innovation. It is much better for both the local and national economy that some of these startups make it the stock market as fully fledged businesses, creating ecosystems that generate new sectors and jobs. This requires longer term thinking from everyone involved – otherwise the number of billion dollar Cambridge companies will shrink even further.

October 1, 2014 Posted by | Cambridge, Marketing, Startup | , , , , , , , , , , , , , | 3 Comments