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September 11, 2005
China taking over data networking business?
When it comes telecomm or data networking infrastructure providers, the names that come to mind are Nortel, Lucent, Alcatel, Motorola and Ericsson. However standardization in the industry driven primarily by convergence towards the Internet Protocol (IP) and using standard components in networking devices is opening doors to Asian companies such as Huawei Technologies to become global players.
From optical networking to mobile GPRS or 3G systems Huawei's technological footprint is rapidly expanding. Ask any executive at Major US networking infrastructure provider what is the biggest threat to his/her business and answer would most likely be competition from Huawei.
Long accused of copying Western technology, Huwai has become a major player by gradually moving into research and development. The quality of its products has improved drastically and so has performance of its systems. After gaining significant marketshare in China the company is moving rapidly into foreign markets including Europe and US.
The networking industry story seems to be following the same pattern that morphed the PC industry into basically a commodity business. After Chinese Lenovo purchased IBMs personal computer division it become the world's number three PC maker. Huawei is rumored to be in talks with European Marconi for a possible takeover. As networking becomes a low margin business could the industry end up the same way as the PC business in Chinese hands?
Posted by admin at September 11, 2005 04:33 PM