By Brian Fung Brian Fung Reporter focusing on telecommunications, media, and competition Email Bio Follow April 10 at 9:59 AM As U.S. officials have pressured allies not to use networking gear from Chinese technology giant Huawei over spying concerns, President Trump has urged American companies to “step up” and compete to provide the next generation of high-speed, low-lag wireless service known as 5G.
Some U.S. technology giants such as Cisco sell switches and routers that reside in the innermost parts of a carrier’s network. But despite its size, Cisco doesn’t compete in the market for “radio access,” or the wireless infrastructure that allows cell sites to connect with smartphones and other mobile devices.
But their fortunes declined around the turn of the century as they failed to keep pace with a changing market. No U.S. company stepped in to fill the gap as those companies faded — partly because of the growing strength of foreign alternatives and partly because of the immense scale required to survive in that line of business, according to industry experts.
While the American approach allowed for more technological experimentation and innovation, a fragmented market based on competing standards made it more challenging for U.S. wireless equipment sellers to amass a large customer base. To give another perspective on Huawei’s enormous influence, the company’s chief rivals, Nokia and Ericsson, account for 17 percent and 13 percent of the global market for telecom equipment, respectively, according to figures compiled by the research firm Dell’Oro Group.Despite an early reputation for cheap knockoff hardware, Huawei today is recognized for low prices, reliable equipment and engaging customer service, analysts say.
It doesn’t hurt that Huawei serves a massive domestic market in China, which grants it tremendous advantages of scale that many tech companies, including American ones, are hungry to access themselves. China is so critical to Apple, for example, that the iPhone maker blamed the country’s economic slowdown for a downward revision in Apple’s recent quarterly sales estimates — the company’s first such warning in 15 years.The U.S.
Which isn't a surprise.
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