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How 5G network builders are competing with Huawei in Asia

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Huawei ban: Winners, losers, and what’s at stake (a whole lot)
ZDNet’s Jason Cipriani and Jason Perlow talk with Karen Roby about how the security and trade brouhaha impacts everything from the future of regional carriers and the bottom lines of tech giants to 5G’s prospects and consumer’s pocketbooks. Read more: https://zd.net/2WzVRbq

Mobile infrastructure firms believe that over the next few years, LTE networks in Asia will be replaced with higher-capacity, lower-latency 5G networks. These 5G networks will be the new backend for applications ranging from mobile e-sports, autonomous vehicle communications, to virtually-controlled robotic surgeries.

But if companies want a piece of Asia’s developing markets, Samsung, ZTE, Nokia, Ericsson, and other equipment providers will need to compete with the low-cost offerings of Huawei.

In terms of commercial 5G deals globally, only Finland’s Nokia and Sweden’s Ericsson come close to the Shenzen-based firm. Huawei has publicly announced 40 deals compared to Nokia’s 38 and Ericsson’s 18. But Huawei spent about $15 billion on R&D in 2018, significantly more than the combined $9 billion spent by Nokia and Ericsson.

“This massive spending gives Huawei the capacity to make lower cost chips and routers,” Subramanian Venkatraman, an analyst at Arizona-based MTN Consulting, told ZDNet in an email conversation.

“This is one of the reasons European operators have been reluctant to completely ban Huawei’s kit.”

Nokia and Ericsson told ZDNet that their key to competing in Asia would be partnerships with device makers and operators, as well as their proven track records.

Also see: The winner in the war on Huawei is Samsung

Kai Sahala, head of Nokia’s Asia Pacific and Japan 5G Sales, told ZDNet that 5G spectrum availability in Asia is delaying development outside of the main Japanese, South Korean and Chinese markets, but that his firm is seeing opportunity in Vietnam, Malaysia, the Philippines, Indonesia, Thailand, and Singapore.

“We are competing with all of the vendors, including Huawei, in many markets, and we have been successful,” he said.

“That tells that there’s something in our position, and our 5G offering especially.”

Sahala says the firm is taking several approaches to market for countries in the Asia region.

“I don’t think these things are negotiated solely on price, [but also] quality, reliability, openness of interfaces, things like security and the platforms that we can offer,” he said.

Although he admits there have been stumbling blocks, such as the initial spotty performance and delays for the 5G network rollout in South Korea.

“In the big picture, it’s really about the long-term performance,” he said. “Performance by independent studies [of our 4G networks] is really outstanding”.

Erik Kruse, an Internet of Things Ecosystem Partner Manager at Ericsson, told ZDNet his firm was competing on 5G with cost, performance, and reliability.

Some see the recent US restrictions on Huawei, which prevents US firms from collaborating or supplying components to Huawei, as a factor for competition.

Read: Now Arm tells staff to stop working with Huawei

Multiple sources have said the restrictions have forced Huawei to place some projects as “pending” while also “slowing down” others, such as those in its server business. One said Huawei had already ordered a large amount of components in the first quarter of 2019, giving it a temporary buffer from U.S. supply chain availability issues.

But Steve Cheng, Vice President and General Manager of Taiwan’s Quanta Computer, told ZDNet that it’s difficult to compete with Huawei’s low costs, and he believes US restrictions will give other players a better chance to develop the 5G market.

Sahala said Nokia has a “neutral” position on the restrictions, as they are decided by governments, but is continuing to keep an eye on the developing situation. Kruse and a spokesperson for Ericsson, meanwhile, declined to comment on the Huawei restrictions.

Ultimately, will Huawei come out as a front-runner?

Caroline Chan, Data Center Group vice president and 5G infrastructure division general manager at Intel, told ZDNet that the US firm would comply with the US government’s order on Huawei — a “tricky situation” — but said that there’s no clear front-runner for 5G in Asia as yet.

“Everybody is realising there is a huge potential to get there,” she said. “The question is investment priority and how aggressive and courageous you are.”

Related Coverage

SoftBank goes with Ericsson and Nokia for 5G network

Japanese telco goes with Swedish and Finnish equipment manufacturers.

First 5G laptop: Lenovo and Qualcomm showcase always-on PC due in early 2020

Is this ‘Project Limitless’ 5G PC the future of computing?

Tech trade war: After Huawei, which Chinese firms are next on US enemies list?

If the cold war with China intensifies, more companies with alleged ties to the Chinese government could be prohibited from doing business with American firms.

Japan telcos pull back sale of new Huawei smartphones

Citing consumer safety concerns and uncertainty over Google’s Android support, SoftBank and KDDI have delayed the sale of new handsets from the Chinese vendor, specifically, the Huawei P30 lite, which had been slated to hit the local market on May 24.

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Toyota lowers production goals by 15 percent for November

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The global chip shortage is impacting automakers significantly. This week, Toyota announced that it plans to cut its global production output by 15 percent in November. The reduced production is laid directly at the feet of the shortage of microprocessors needed to build modern vehicles.

Despite chopping production in November, Toyota says it is still sticking to its planned production goals for the entirety of 2021. The company has said that it plans to ramp up production in December. Toyota is the largest automaker in Japan and also builds some of its vehicles in the US.

Toyota was also forced to reduce production in September and October due to the chip shortage and other issues caused by the coronavirus pandemic. For the year through March 31, Toyota reduced its production goals to 9 million vehicles representing a reduction of 300,000 units. In addition, the pandemic has significantly impacted components required to build its vehicles sourced from Malaysia and Vietnam.

Toyota says that a decline in COVID-19 infection rates in southeast Asia will allow chip manufacturers to increase output for the remainder of the year. Toyota wasn’t as impacted as some automakers by the chip shortage and pandemic because it had a stockpile of components allowing it to continue manufacturing operations.

The automaker has asked its component suppliers in southeast Asia to boost its allotment of chips and other components in December to allow it to ramp production significantly and meet its goals. Toyota spokesperson has stated that the total loss production for the automaker between September and November will be as high as 910,000 vehicles. In North America specifically, the reduced production in November will mean between 45,000 and 55,000 fewer vehicles produced.

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Porsche deliveries climb significantly despite chip shortage

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The global chip shortage impacts most automakers and has resulted in reduced shipments and production stoppages. While most automakers are seeing their deliveries decline, Porsche has seen deliveries increased by 13 percent in the first three quarters between January and September 2021. Porsche says it has delivered 217,198 vehicles around the globe.

The automaker notes that demand for its vehicles rose across all sales regions, but increased demand was particularly strong in the US. While deliveries have increased for Porsche, the automaker still says the coronavirus situation is dynamic, and it is facing challenges in procuring semiconductors. The most popular model for Porsche is the Cayenne, with deliveries of 62,451 units.

Porsche’s second most popular model was the Macan delivering 61,944 units, working out to a 12 percent increase in deliveries for that model. Its third most popular model may be a surprise to some. The electric Taycan sports car delivered 28,640 units to customers. 2021 is only the second year that model has been available, and it’s already surpassed deliveries of the iconic 911. So far, the 911 has delivered 27,972 units in the first three quarters of the year, which represents a 10 percent increase.

Porsche says the 718 Boxster and the 718 Cayman delivered 15,916 units. The four-door Porsche Panamera remains popular, delivering 20,275 units. In the US, Porsche says it delivered 51,615 vehicles in the first nine months of 2021. Those numbers represent a 30 percent increase compared to deliveries made during 2020. Across the entirety of the American continent, Porsche delivered 63,025 vehicles for a 29 percent increase compared to last year.

Interestingly, the largest single market for Porsche is China, with 69,789 vehicles delivered, representing an 11 percent gain compared to 2020. In addition, Porsche delivered 56,332 vehicles across Europe.

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AAA study finds vehicle safety systems are negatively impacted by rain

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Researchers from AAA have published a new study looking at how moderate to heavy rain affects the ability of modern vehicle safety systems to function. AAA conducted testing in a closed course environment simulating rainfall and discovered that test vehicles equipped with automatic emergency braking they were traveling at 35 mph collided with stopped vehicles 33 percent of the time during rain. Other vehicle safety features were also impacted during rain.

Other tested features include lane keeping assist, which allowed the vehicle to depart their lane 69 percent of the time during grade. AAA says that vehicle safety systems called advanced driver assistance systems are typically tested in ideal conditions. AAA believes testing standards need to be changed to incorporate real-world conditions that drivers would typically encounter.

Safety systems rely on cameras and sensors to visualize markings on the road, cars, pedestrians, and other obstacles. AAA’s Greg Brannon says people don’t always drive around in perfect sunny weather and test methods need to be changed to take real-world conditions into account. AAA says its research found rain had the biggest effect on vehicle safety systems.

However, they also stimulated other environmental conditions, including bug impacts and dirt. The results found that driving in simulated moderate to heavy rain impacted both safety systems. Automatic emergency braking engaged while approaching a stopped vehicle in the lane ahead at 25 mph but resulted in collision 17 percent of the time.

When speeds were increased to 35 mph, collisions occurred 33 percent of the time. Overall, during testing, lane keeping assist veered outside of lane markers 69 percent of the time. Researchers said that when testing systems with a simulated dirty window stamped with a concentration of bugs, dirt, and water, only minor differences in performance were noted. However, cameras can be influenced by a dirty windshield, and AAA says it’s important that drivers keep the windshield clean.

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