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Chinese tech giant Huawei is the arch nemesis of Silicon Valley. So it is not surprising that Huawei is gaining a foothold among people who have good reason not to trust the US tech industry.
It is not surprising, then, that Russia and China's increasingly strong economic ties would be reflected in the tech industry.
Huawei is increasing its presence in Russia. The hi-tech giant is going to open new development centers in Russia and increase the number of branch employees up to 1,500 over the next five years.
Huawei is intensifying its cooperation with Russia. It intends to expand its presence, hire more employees, and increase cooperation with Russian companies. By 2024, Huawei is planning to hire 1,500 more employees for its research and development centers based in Russia. So far, the Chinese giant has only two centers in Moscow and Saint Petersburg, which employ 400 and 150 researchers.
Igor Akulinin, Huawei: "It's clear that it's a rough figure. It's hard to say what'll happen in five years. It's a general figure. It includes both corporate employees and employees hired for specific projects. We intend to closely cooperate with universities and research institutes in the fields of 5G, artificial intelligence, and cloud computing."
Market specialists explain what to expect of the expansion of the Chinese hi-tech giant.
Denis Kuskov, analyst: "Huawei is not a philanthropist. No developments capable of "blowing up" the market won't be worthy of, let's put it like this, being launched in Russia. They'll be doing it back in China. The primary goal of the company is to establish cooperation with the state bodies. It's interested in gaining a firm foothold in the Russian market, in cooperation with both service providers and authorities."
Huawei is interested in Russian technologies and cooperation with the Russian IT-giants. Huawei and Mail.Ru Group are discussing the possibility of pre-installing Russian software on Huawei smartphones. The cooperation with Yandex is even broader. First, the companies want to install the Alisa voice assistant on Huawei devices. In addition, the parties discuss cooperation in the fields of music, taxi, and weather services, as well as news aggregators. Besides, according to the Chinese media, they're developing a mapping service for the developers of third-party applications that use geolocation. It will include 150 countries and regions. It's no surprise, considering that Huawei was banned from all Google services, including the maps.
Nikita Krupensky, analyst: "The photo is bound to the services: navigation, food delivery, geolocation, and so on. Of course, it's one of the crucial applications. That's why Huawei is looking for a possible alternative. It believes that Yandex can provide it."
Another Russian developer may provide software for Huawei smartphones. Avrora is the first Russian mobile operating system. It's based on the open-source Finnish platform "Sailfish". It's owned by Rostelecom and has been certified, tested, and registered. Huawei has also purchased Excelsior, an IT company from Novosibirsk, and the rights for the patents, equipment, and part of the staff of the video analysis developer Vocord. Over 2018, the Russian branch of Huawei earned record profits, about 132 billion rubles ($2 billion). The majority of the sum comes from selling Huawei and Honor smartphones. The company also doubled its net profits. That allowed Huawei to take 20% of the market, leaving Apple behind. Now, it's in second place, after Samsung.
Huawei's global sales are also on the rise. During the first six months of 2019, it sold 118 million devices, 24% more than last year. And that's despite being added to the US blacklist. It was done because the company's activities allegedly compromised United States national security. After that, local companies were unable to sell hi-tech goods and share technologies without getting a special license from Washington. According to Huawei estimates, the sanctions may cost it thirty billion dollars of revenue. Experts believe that's one of the reasons for Huawei's Russian expansion.
Konstantin Ankilov, CEO of TMT Consulting: "Historically, the Russian market was one of the biggest markets for Huawei's global expansion back at the beginning of the 2000s. Now, due to the troubles Huawei's experiencing in America and against the backdrop of Huawei's continuous success on the Russian market, Russia's beginning to play a major role."Support Russia Insider - Go Ad-Free!
Huawei produces smartphones, computers, tablets, smart home gadgets, as well as telecommunication and IT equipment. With Huawei's expansion in Russia, the localization of manufacturing those goods will be increasing.
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