Nearshore Americas

Chinese Tech Giant Huawei Bets on LatAm App Makers in $50 Million Mexico Move

Chinese telecom gear maker Huawei is set to invest US$50 million in Mexico as it begins persuading Latin American software writers to develop applications for its devices.

A portion of this fund will go towards building a lab in Mexico, which will serve as a helping-hand for app makers, supplying them with cutting-edge new technology tools as well as advisory services.

The Mexican lab is one of the 10 such facilities being erected around the world, stated the company’s Mexican PR Manager Carlos Morales, adding that more details will be disclosed in the coming months.

Huawei has not identified the place for installing its lab, and Morales has denied disclosing how my developers are already working on apps for the company.

“We can not disclose how many developers are working with us nowadays in Latin America, but we are working to add more of them and I’m sure that 2020 will be the year that this initiative ramps up and will become a platform for digital and economic progress for the region,” Morales said.

According to local media reports, the Chinese firm is hoping to engage with hundreds of app makers across Latin America – particularly Brazil – where it is gearing up to build 5G networks.

When asked as to what kind of toolkits the company will provide to its developers, Morales said: “Today Huawei Mobile Services – or HMS, one of the two pillars of our strategy – offers 9 service kits that span from user authentication to maps and location, to payments and analytics. We will launch more kits during the first quarter of 2020, with one aimed to take advantage of the AI capabilities built-in our devices.”

On its website, Huawei claims to have supported more than 1.3 million developers around the world.

Chinese Firms & Latin America

“So far, we have not seen Chinese firms executing with local people. In most cases they bring talent from China,” says Mario Tucci, Co-founder MVD Consulting, a business consulting firm in Latin America, expressing surprise at Huawei’s search for Latin American talent.

A viewpoint of this kind about Chinese firms is quite common in many Western countries. That’s because in Africa, where blue-collar laborers are easily available, many Chinese firms have employed men from their homeland to carry out infrastructure projects.

There are similar concerns in Latin America as well. In the past few years, some Latin American IT services providers set up offices in China hoping to cash in on its red-hot economic growth. Despite years after operations, they could not close a single deal with any Chinese firms.

Gone are Those Days

Huawei can no longer afford to refuse collaboration with foreign workers as it has been struggling to portray itself as an international business firm having been caught in the crossfire of a razing trade war between the U.S. and China.

The Donald Trump administration has put the company on a blacklist, in addition to urging other nations to keep it at bay, saying its devices are vulnerable to Chinese espionage activities.

As a result of the ban, American technology firms – including Google, Microsoft, and Qualcomm – are cutting ties with Huawei.

Today, Huawei is almost on the verge of being pushed out of Google’s Android mobile operating system. Without Android, Huawei may find it hard to allow its phone customers use popular apps such as Google Maps.

The Chinese firm has now developed its own app gallery (Huawei App Gallery) and a mobile operating system called HarmonyOS. With the trade war threatening to push it out of the Android ecosystem,  Huawei is no doubt focusing on getting its operating system up and running as quickly as it can.

But Morales dismisses such statements. “Since April of 2018, developers have the chance to develop for our Huawei App Gallery (HAG), our own app store. HAG is not here to replace Google’s PlayStore, but to complement it offering a more secure and customized experience to all our users, and a more comprehensive set of tools and ways to monetize to developers.”

Mario Tucci
Mario Tucci, Co-founder MVD Consulting.

The Shenzhen-based company last month posted US$86.8 billion in revenue for the nine months ending September 30. And its annual revenue is expected to exceed US$100 billion this year. Therefore,  Huawei has set aside more than US$1 billion for developing apps for its digital ecosystem.

“While Mexico is a good and talented location, it usually looks north. But Latin innovation happens south. Argentina, Brazil, Colombia, Chile and Uruguay. It will be key if they have the right person focusing on the non-Mexican market,” Tucci said with reference to Huawei’s plan for Mexico.

“In any case, I see this as a good positive behavior. If you compare with Indian firms, they started 15 years ago in Latin America and are probably giving jobs to more than 40,000 people,” Tucci added.

Latin America and Huawei

In Latin America, many countries, including Brazil, Mexico, Argentina and Chile are counting on Huawei’s ability to build their 5G networks.  Many analysts say that Huawei has the best equipment for 5G, and there are no U.S. suppliers able to compete with it in the region.

Tucci says Huawei’s business strategy will indeed work well for the company as well as for the region. “It’s a good strategy to sell hardware but also open to local innovation. Cisco and others should probably announce something similar if they are not already doing this,” he said.

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Huawei has long been cozying up with Latin America. It is now considering building a submarine cable network linking Latin America with China.

“The proposed route would connect Chile with mainland China, with numerous other landing stations across Latin America and the Pacific territories,” reported Total Telecom in August this year.

Andrew Williamson, Huawei’s Vice President of marketing insights, told Bloomberg in Mexico last week that his company is working with almost all telecom operators in the country, including the US carrier AT&T.

Reports say that the company has even launched a bid to acquire trademarks for its new mobile operating system, which is expected to be installed in mobile phones early next year.

And not for just cell phones: the operating system will power wide-ranging devices including computers, tablets, TVs, cars and wearables.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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