Huawei Aims to Pass Cisco in Life-Size Video Conferencing

Huawei Technologies Co. said it plans to overtake Cisco Systems Inc. in three years to become the world’s biggest seller of telepresence equipment as the company expands to markets beyond gear for telephone networks.

Huawei’s sales of the equipment that can beam a life-sized video image around the world doubled to about $200 million last year, giving Huawei about 20 percent of the global market, Li Jun, general manager of such products at Huawei’s Enterprise unit, said in an interview today in Beijing. Cisco has 50 percent of the global market that’s about $900 million, Li said.

The push into video conferencing services is part of Huawei’s plan to more than triple revenue to $100 billion by 2021, from $32 billion last year. It also comes as Huawei in July posted a 22 percent drop in first-half operating profit to 8.79 billion yuan ($1.39 billion) as competition intensified in the telecommunications industry.

China’s largest maker of telephone equipment increased sales of computing services and video equipment to large businesses by 57 percent to $1.5 billion last year, Li said.

Huawei’s top-of-the-line telepresence system, the TP3106, costs $160,000, compared with $300,000 for a similar product sold by Cisco (CSCO), Li said. The TP3106 displays high-definition life-size images across three flat screen televisions to convey the feeling of being in the same room.

Cisco’s Beijing-based media contact Chunbo Wang, U.K.-based Caroline De Souza and Bangalore-based Bipasha Chakrabarti didn’t immediately respond to phone calls and e-mails seeking comment.

Huawei, based in the southern Chinese city of Shenzhen, still expects to meet a full-year target set in April of expanding sales this year by between 15 percent and 20 percent, the company said in July. Privately-held Huawei is owned by its employees.

The company will boost research spending by 20 percent this year as it expands into cloud computing and mobile devices including tablet computers and smartphones, Huawei said in April. Spending this year will rise to $4.5 billion, from $3.76 billion last year, it said.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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