Huawei Founder and CEO Ren Zhengfei has said that US trade restrictions over the past two years forced it to overhaul product development priorities but that has resulted in a marginal boost in its bottom-line. 

According reports by Mobile World Live, Ren stated that Huawei took a more balanced approach to quality and performance and that is what has driven the gains made so far.

This was contained in a document based on a recent Q&A session between Ren and interns at the Huawei’s Central Research Institute.

According to the document, the CEO explained Huawei boosted profitability by focusing on using the right components to deliver high quality products, adding that its efforts in 6G research aimed to open the new capabilities was key a key driver.

“So far, we have only leveraged the communications capability, without taking advantage of the detection and sensing capabilities. This might be a new direction of development for radio waves,” Ren said.

He noted that the impact of the trade restricts would have forced Huawei into cutting jobs and remuneration, but till date the company hasn’t changed its HR policies due to the restrictions, with business as usual for remuneration and share distribution.

Ren highlighted the value of disruptive innovations even if they ultimately fail. “That is because we would have cultivated a large group of talented people during the process.”

Software 

He also predicted software will be the core of digital architecture in the future information society.

Huawei unveiled a smartphone version of its HarmonyOS in June, a month after Ren called for it to make a strategic shift towards software development.

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Ren lamented China had experienced a number of economic bubbles, with young executives “rushing to do things that yield quick returns with a relatively low investment”.

He also acknowledged the country lags far behind in sectors including machine tools, process techniques, instruments and materials research.

While China is focused on experimental science, it pays little attention to theoretical research, he observed. “The company must not be short-sighted or merely pursue practicality. Otherwise, we might be left behind forever. We need more theoretical breakthroughs, especially in domains like compound semiconductors and materials science.”

With the company’s core revenue dropping in H1, Huawei laid a plan to diversify its portfolio after core revenue dropped in H1, exploring areas including automotive components and consumer printers.