According to a new report, Huawei spends $22 billion a year on R&D and innovation. An expert says the company does that not because it wants to, but in order to keep pace with innovation. Of course, nobody wants to spend that much money on R&D, but… it’s a requirement for such companies, basically.
Huawei spends a ton of cash on R&D and innovation a year, $22 billion
It is said that Huawei is in a position where it cannot think of cost-effectiveness for its growth. Innovation is the only way forward. When we consider the US sanctions and everything, that puts even more emphasis on innovation.
The costs are unexpectedly rising, and the Chinese people can not longer rely on budget-friendly strategies, the report says. The same actually applies to Huawei and other major tech companies.
According to Liu Ke, the dean of the Innovation and Entrepreneurship School, says that Huawei does not have any other option but to spend and try to innovate. He said that if the company doesn’t do it, it will fall behind in a matter of years.
He also added that a number of factors have affected China a lot. Those factors are the US sanctions, lack of techs, and a number of others. The country is trying to balance things out, as are major tech companies.
Based on previous information, Huawei spends around 10-20% of its sales on R&D for communication, AI, chips, and other major aspects. The company is also expected to increase its investment moving forward.
Things would likely be considerably different if not for the US sanctions
Things would look significantly different for Huawei if not for the US sanctions. The company was close to dethroning both Apple and Samsung way back in the day before the sanctions hit. Since then, Huawei has been on a self-sufficiency journey, to become independent, but it has not been easy.
Launching its Android-free OS is a giant step in the other direction. The name of it is HarmonyOS NEXT, and it launched in China not long ago. The company’s new Mate X6 and Mate 70 devices are the first to ship with that OS.