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Vision Shopsters: Broadband access vendor profile: Huawei Technologies Market Research Report

In recent years, Huawei has worked hard to innovate and customize its access product portfolio. These efforts include integration of GPON, EPON, and active Ethernet capabilities onto a single platform; incorporation of aggregation functionality into the OLT, partly due to demand from China Telecom and China Unicom; and the addition of a non-blocking architecture for more flexibility and features that enable open access and interoperability, as demanded particularly by government-led next-generation access projects. At the ONT level, Huawei’s recent portfolio additions include “plug-and-play, dual-mode” ONTs with automatic configuration that can support either EPON or GPON with no need to change line cards. Huawei is also moving towards vertical integration. In general, Huawei works with chipset vendors to incorporate technology advancements. However, for 10G GPON, Huawei (trialed by Verizon recently — a breakthrough given Huawei’s negligible presence in the North American market) developed the chip itself, enabling more control over price. Competitors also offer some of these innovations, but it is clear that Huawei continues to probe the needs and concerns of its customers and intends to orient its product roadmap towards further innovation

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Table Of Contents :

Executive summary
In a nutshell
Ovum view
Market position
Analysis of competitive position
Corporate
Broadband access
Aggressive FTTB deployment in China in 2010 and beyond to benefit Huawei, but also ZTE and other competitors
Strategy definition and execution
Huawei uses strength in domestic market as leverage for international growth
BT 21CN win was a breakthrough for Huawei in EMEA
Huawei needs to reposition and target North America anew; Verizon 10G GPON trial is encouraging, but shows no impact in the short term
Huawei sees growth in adjacent markets to access
The SingleFAN solution is an important component of Huawei’s broadband access strategy
Huawei’s “green” strategy targets carrier concerns
Financial health
Huawei’s revenues have grown substantially over the last few years
Profit margins have been volatile and sometimes in decline, but largely due to R&D expansion
Huawei will continue to use government financial support and bank credit lines as sales tools
Product line management
Leader in the IP-DSLAM world
Development of MSAN reduced costs and enabled service delivery over a combination of access interfaces
Attention to reducing carrier opex helped Huawei gain customer satisfaction and market share
DSL does not die with advances in FTTx; Huawei needs to keep innovating in DSL along with FTTx
Globalization
Solutions selling
SingleFAN solution with broadband access portfolio is part of broader IPTime solution that Huawei claims as a competitive differentiator
SWOT analysis
Huawei aims for leadership in access market but will continue to face intense competition
Strengths
Weaknesses
Opportunities
Threats
Huawei’s broadband access ratings
Huawei’s solutions breadth and customization abilities strengthened by volume gains in domestic market
Huawei early leader in nascent GPON market; will benefit from EPON leadership in China
Huawei has a broad access portfolio
Broadband access product portfolio
MA5600T is centerpiece of Huawei’s access portfolio
Past and current DSLAM portfolio
SmartAX MA5100 ATM/IP-DSLAM series (launched in 1999/2000)
SmartAX MA5300 ATM/IP-DSLAM series (launched in 2002/2003)
SmartAX MA5600 ATM/IP-DSLAM series (launched 2005)
Mini DSLAM
HONET UA5000 MSAN (multiservice access node)
Huawei’s key current access product is the SmartAX MA5600T
Products for FTTB LAN
Products for FTTx DSL
Products for other categories
Migration path from PON to next-generation PON
Management system
Regional market data by product segment
Asia-Pacific still dominates access shipments despite Huawei’s globalization
Huawei surpasses Alcatel-Lucent in DSL
Marketing strategy
Messaging
Partnerships/acquisitions
Channel strategy

List of Tables
Table 1: Ovum’s overall rating of Huawei
Table 2: Huawei’s key strengths, weaknesses, opportunities, and threats
Table 3: Mapping of Huawei’s products to Ovum’s segmentation
Table 4: Huawei’s regional broadband access revenues by product segment, rolling 4Q as of 4Q09 (DSL and FTTx)
Table 5: Huawei’s regional market share by product segment, rolling 4Q volumes/subscribers as of 4Q09 (DSL and FTTx)

List of Figures
Figure 1: Huawei’s broadband access ratings
Figure 2: Huawei’s broadband access product competitiveness by segment

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