This is Huawei's first judgment on the cause of its own crisis, which is due to strategic mistakes. When Huawei was doing research and development in its early days, it adopted a very conservative strategy. For example, in 1990, when choosing the research and development direction of operator network equipment, Huawei chose the former between analog technology and digital technology. Because at that time, Lao Ren judged that the development pace of China's communications would not be that fast.
According to data provided by the State Planning Commission, the penetration rate of telephones by 2000 will be around 5-6, but in fact it is 50. At that time, Huawei estimated that 2,000 switches would be enough for a county-level market. But below 2,000 doors, digital technology has no advantage over analog technology. But unexpectedly, China's digital technology was developing very fast at that time, and Huawei's analog technology was outdated before it was fully developed. Huawei immediately invested in digital technology research and development.
After suffering a setback, Ren Zhengfei felt that he should not be too conservative, but should be more radical, and he must target future technologies for research and development. Therefore, from 1998 to 2000, Huawei has been investing in the research and development of 3G technology. At that time, almost all of the tens of thousands of people recruited were invested in 3G technology. Unexpectedly, the world's "cold winter" is coming. Affected by the global IT technology network bubble, the development process of 3G has slowed down globally. At that time, China's 3G development had high hopes, but the Ministry of Information Industry had not issued 3G licenses, and China Mobile and China Unicom, the two major mobile operators, were also at a loss.
The two major fixed-line operators, China Telecom and China Netcom, have no idea where to start. Everyone understands that mobile communications must be the trend, and fixed-line calls have no future. Therefore, China Telecom and China Netcom forcefully promoted PHS. If they couldn't get a license, they forced it to lock in customers first. Huawei focused on developing advanced 3G technology and missed the competitive market of PHS. This strategic mistake was summed up in Huawei's famous saying: "Half a step ahead is a pioneer, and one step ahead is a martyr." From this we can see that Huawei's philosophy was formed step by step, from being conservative first and then radical, to being neither conservative nor radical. This shows that Huawei's self-correction capability is very strong.