Huawei Technologies Co is expanding the duties of Richard Yu Chengdong, the consumer business group’s chief executive, to cloud services and artificial intelligence (AI), a management reshuffle that could strengthen the firm’s moves into new growth markets amid its struggles with US trade sanctions.
The 51-year-old Yu, who led Huawei’s march to unseat Samsung Electronics as the world’s biggest smartphone vendor in the second quarter last year, will take over from Hou Jinlong as head of those two business units, according to an internal memo seen by the South China Morning Post. It said the official announcement of Yu’s expanded responsibilities will be made on February 7.
Hou will be transferred to head Huawei’s digital power service, a unit under the Shenzhen-based company’s carrier business group that deals with telecommunications network operators.
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“AI and cloud computing are the key growth areas in China over the next few years,” said Kitty Fok, managing director of tech research firm IDC China. “Putting more focus and investments in AI and cloud computing is an important strategy for Huawei to capture future opportunities.”
Huawei, the world’s largest telecoms equipment maker and China’s biggest smartphone vendor, had no further comment on Thursday about the management reshuffle.
The latest move by Huawei shows how it continues to double down on new growth areas amid its difficulties with rigid US trade restrictions, which have affected the supply of hardware and software components for its core smartphone and networking equipment businesses.
Huawei Cloud had a 16.2 per cent share of China’s cloud services market in the third quarter, behind the 40.9 per cent share of industry leader Alibaba Group Holding’s cloud unit, according to research firm Canalys. Alibaba is the parent company of the Post.
Cloud computing services enable companies to buy, sell, lease or distribute a range of software and other digital resources as an on-demand service over the internet, just like electricity from a power grid. These resources are managed inside data centres.
In March last year, Tencent Holdings and Huawei announced their collaboration on a development lab focused on cloud gaming, AI, virtual reality and augmented reality technologies for the country’s video games industry.
Huawei, which topped the list of AI intellectual property owners in 2019, was named by Beijing that same year as one China’s national AI champions, leading the research on AI infrastructure and software.
“Yu’s co-management of the consumer, cloud and AI businesses will enable Huawei to link up its front-end [smartphones, personal computers and other devices] with its back-end services [cloud and AI],” IDC China’s Fok said.
Yu’s track record at Huawei indicates that he would be up for the challenge of overseeing those three businesses at a time when it remains unknown how US President Joe Biden will deal with the company, which was blacklisted by the previous administration in May 2019.
Dubbed “Big Mouth Yu” by Chinese netizens because of his tendency to speak publicly, Yu has been vocal about Huawei’s ambition to become the world’s smartphone market leader, even when the Chinese company was a minnow in a big pond.
Born in 1969, Yu earned a master’s degree from China’s prestigious Tsinghua University, before joining Huawei in 1993. Yu took the reins of Huawei’s consumer business group in 2011 at a time when Chinese smartphone brands were still considered copycats and cheap alternatives to bigger players such as Samsung, Nokia and Apple.
After taking charge of the business, he stopped providing cheap customised handsets to carriers in China, upgraded smart devices to the mid-tier and high-end segments, and abandoned the ultra-low-end of the smartphone market, which was unprofitable, according to a 2012 Weibo post from Yu.
Fast-forward eight years through to 2020 and Huawei topped the smartphone market, despite being put on the US trade blacklist the year before. Huawei, however, is predicted to fall behind in the smartphone market to seventh place in 2021 amid US sanctions, according to research company TrendForce.
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