Huawei Now the Second-Largest Wireless Equipment Vendor: ABI

The news comes after a rough March for the Chinese networking vendor, where it was banned from a major project in Australia and saw its alliance with Symantec end.

Networking vendor Huawei Technologies finally got some good news, with market research firm ABI Research saying the Chinese company grabbed second place in the global wireless equipment market in the fourth quarter of 2011.

ABI analysts said April 3 that Huawei generated $2.53 billion in revenues during the quarter, a 38 percent increase over the same period in 2010. That was enough to edge into second place, moving past Nokia Siemens Networks, which generated $2.4 billion in wireless equipment sales during the quarter.

Ericsson remained at the top of the list, with about $3.5 billion in sales, according to ABI.

The fourth quarter was the strongest for the market overall in 2011, according to ABI analysts. Still, it was not as strong a fourth quarter as in previous years, as customers continued to deal with the volatile economic environment, said Jim Eller, principal analyst of wireless infrastructure at ABI.

€œIn general, fourth quarter 2011 revenues were down year-on-year from fourth quarter 2010,€ Eller said in a statement. €œWireless network operators did not spend as much in the fourth quarter as they have in past years, presumably taking a cautious approach due to the uncertainty of the macroeconomic situation.€

Despite the overall market numbers, Huawei executives had to have been happy to see how their company did, particularly in light of how things have gone over the past few weeks.

In March, it was learned that the Australian government had banned Huawei from bidding on a $38 billion fiber-optic network in that country. While government officials had not said why the networking company was banned, media sources in that country said the decision came after Australian intelligence officials had brought up concerns about recent computer hacking attacks that had allegedly been tied to China.

Similar, security concerns reportedly prompted security software vendor Symantec to end its four-year alliance with Huawei that was created to develop network security solutions. Symantec officials announced in November 2011 that they were looking to sell their 49 percent stake in Huawei Symantec Technologies, and on March 30 announced that they had completed the sale of that stake to Huawei for $530 million.

In an announcement about the completion of the sale, Symantec officials said that after negotiations with Huawei, it was determined that the best course for the business was to go forward with a single owner, rather than both.

However, in a March 28 article, The New York Times reported that Symantec officials were worried that Huawei€™s strong relationship with the Chinese government would make it difficult for Symantec to get classified information from the U.S. government regarding cyber-security threats.

In January, the U.S. government expanded who could receive classified information from the National Security Agency regarding security threats. Before, the plan was to share the intelligence with military contractors. However, now such information also will be shared with antivirus vendors€”such as Symantec€”and network providers, according to the story.

Quoting two unnamed people briefed on the Symantec-Huawei deal, Symantec officials worried that their alliance with Huawei would preclude them from getting access to the classified information.

Also according to unnamed sources, Huawei plans to shut down its offices in Silicon Valley and move the entire operation out of the United States, due in large part to the oversight it was getting from the U.S. government.