Huawei's "Getting on the Car" Note: Why are car companies pursuing it?

Text?|?Zhang Maomao

Editor?|?Shi Zhiliang

On December 4, 2013, Huawei held a Huawei vehicle-mounted module exhibition at the Four Seasons Hotel in Pudong, Shanghai. At the new product ME909T launch conference, more than 100 representatives of the Internet of Vehicles industry chain companies and media were invited to witness the event. At the meeting, Liu Xiaobin, Vice President of MBB (Mobile Broadband Business) Product Line of Huawei Terminal Co., Ltd., excitedly announced that Huawei will officially enter the Internet of Vehicles.

This is the beginning of Huawei’s entry into the field of Internet of Vehicles. "Huawei terminals will only focus on the Internet of Vehicles communication solutions that they are good at, and will not cross this boundary. The rest will be left to partners." At that time, Liu Xiaobin said that Huawei has strong global communication technology support capabilities and Global operator access capabilities, with its advantages in the communications field, can help customers quickly develop other applications in the Internet of Vehicles industry chain and lower the threshold for using wireless technology.

On November 25, 2020, Huawei's internal website Xinsheng Community released Huawei EMT Resolution No. 2020007 "Resolution on Smart Automotive Components Business Management" (hereinafter referred to as the "Resolution") signed by Huawei founder Ren Zhengfei . In the "Resolution", Huawei reiterated that it will not build cars, focus on ICT business, help car companies build good cars, and become an incremental component provider for intelligent and connected cars.

It is understood that Huawei mainly provides car companies with ICT technologies including 3G/4G (future 5G) networks, communication modules, Internet of Vehicles platforms, and cloud data centers. "In the past two years, although the external environment has been changing, we must be clear that building ICT infrastructure is Huawei's historical mission. The more difficult the period, the less we can waver." Ren Zhengfei wrote in the "Resolution".

There have been constant rumors about Huawei building cars, and Huawei executives have repeatedly denied it in public. Only a month ago, on October 30, Wang Jun, President of Huawei Smart Car Solutions BU, once again reiterated at the smart car solution HI brand launch conference that Huawei does not build cars, but its goal is still to help car companies build good cars. This time, Ren Zhengfei's denial was even more decisive: "Whoever plans to build cars in the future and disturbs the company can be transferred from his position and find another position."

"Huawei does not build cars, but helps car companies build good cars." This is the target boundary that Huawei has reiterated many times since it entered the field of Internet of Vehicles. In the past seven years, Huawei has sorted out its automotive business many times, and the importance of the automotive business within Huawei has also repeatedly increased. Facing the huge blue ocean of Internet of Vehicles, Huawei is not just a bystander, but an in-depth participant.

Irreversible Strategy: Not to Build Cars

In addition to the top-level reiteration of not building cars, the "Resolution" also made two decisions:

1. The business jurisdiction relationship of Intelligent Automotive Solutions BU (IAS?BU) was adjusted from the ICT Business Management Committee to the Consumer Business Management Committee, and Wang Tao was appointed as a member of the Consumer Business Management Committee.

2. Reorganize the Consumer BG?IRB (Product Investment Review Board) into the smart terminal and smart car parts IRB, and adjust the investment decision-making and portfolio management of the smart car parts business from the ICT?IRB to the smart terminal and smart car parts Smart car parts IRB. Yu Chengdong was appointed director of the IRB for intelligent terminals and intelligent automotive components.

The "Resolution" emphasizes that the Intelligent Terminals and Intelligent Automotive Components IRB and the Consumer Business Management Committee must adhere to Huawei's strategy of not building cars and have no authority to change this strategy.

Through this department adjustment, Huawei’s automotive business has moved to a more important position. Prior to this, Huawei had sorted out its automotive business many times.

Not long ago, on October 30, Huawei held a much-anticipated new product launch conference in Shanghai - its most powerful smartphone, the Mate40 series, announced the domestic price and was officially launched. At the launch, Wang Jun launched the smart car solution brand HI (full name in English: Huawei Intelligent Automotive Solution), which aims to cooperate deeply with car companies with full-stack smart car solutions to create intelligent connected electric vehicles.

It is understood that HI’s full-stack smart car solution includes a new computing and communication architecture and five major smart systems: smart driving, smart cockpit, smart electric, smart network and smart car cloud, and A complete set of intelligent components such as lidar and AR-HUD.

HI brand will also provide new computing power and operating systems, including three major computing platforms, intelligent driving computing platform, intelligent cockpit computing platform and intelligent vehicle control computing platform, as well as three major operating systems AOS (intelligent Driving operating system), HOS (intelligent cockpit operating system) and VOS (intelligent vehicle control operating system). Wang Jun said that with the support of computing power and operating systems, cars can achieve software definition and continue to develop new functions.

Some people believe that the release of HI, the smart car solution, means that Huawei has further improved its layout in the smart car field, moving from the original scattered products to a systematic and branded solution. Prior to this, Huawei's automotive business was more fragmented. As Huawei deepens its layout in the smart car field, the integration and adjustment of Huawei's internal automotive business is also accelerating.

In 2014, Huawei established the "Internet of Vehicles Laboratory", which is dedicated to technological innovation in automotive interconnection, intelligence, electrification, and sharing, extending Huawei's "end, management, and cloud capabilities." "ICT" capabilities, and reserve technologies for application scenarios of intelligent connected electric vehicles. After several years of development, Huawei has reached strategic cooperation with many car companies such as Dongfeng, SAIC, and BAIC. In 2018, Huawei's strategy department announced that the Internet of Vehicles would become Huawei's strategic focus.

In 2019, the development of Huawei’s Internet of Vehicles business has accelerated significantly. In May 2019, Huawei officially established the Smart Car Solutions Business Unit (BU), and attracted Zheng Gang, former member of the Standing Committee of the Party Committee of BAIC Group and General Manager of BAIC New Energy, to join, and he served as Vice President of Huawei Smart Car Solutions Business Unit (BU) . In the same year, Huawei officially released its transitional solution HiCar system.

It is foreseeable that with Yu Chengdong personally taking charge of the IRB Director of Intelligent Terminals and Intelligent Automotive Components, the pace of subsequent development of Huawei's smart automobile business will be further accelerated. Reviewing the entire process, we can find that Huawei is constantly clarifying the positioning and boundaries of its automotive business, and the importance of the automotive business is also constantly highlighted.

In this regard, Huawei’s rotating chairman Xu Zhijun has publicly stated that he has invested US$500 million in Huawei’s automotive business this year and will not consider profitability within eight years.

Why has Huawei become a publicity point for car companies?

Huawei is not the only one competing for the intelligent connected car pie. The depth of cooperation between Huawei and various car companies also varies.

Chang'an Securities divides the cooperation between Huawei and car companies into three levels: 1. Ecological level, Hicar is grafted onto Huawei's ecosystem. At this level, Huawei realizes the connection between mobile phones and cars based on Hongmeng OS and application framework. , equipped with the pre-installed product HMS for Car combined with the AI ??engine, and the hardware product car smart screen of Hongmeng OS 2.0 system. 2. At the incremental component level, Huawei can cut into the hardware supply through its cost advantage in components. Among them, Huawei's technology accumulation in 5G, radio frequency, and electric fields makes it highly competitive. 3. At the platform level, Huawei provides the autonomous driving computing platform MDC to deeply integrate its sensors, actuators, and application algorithms with its partners.

A phenomenon has already formed. If the smart solution provider for car companies is Huawei, this matter itself is enough to become a publicity point.

Give two examples of Huawei’s in-depth cooperation: ARCFOX and Changan Automobile. BAIC New Energy's high-end brand ARCFOX uses Huawei as one of its three core genes when building new cars. ARCFOX believes that "software-defined cars" and deep binding with Huawei have become ARCFOX's core selling point and differentiation.

On November 14, Changan Automobile Chairman Zhu Huarong publicly revealed that it would join hands with Huawei and CATL to create a high-end smart car brand and high-tech high-end products. Changan Automobile has positioned the new car brand jointly created by the three parties as a high-end smart car brand, which shows the importance of Huawei.

Currently, Huawei’s “circle of friends” is constantly expanding. In May this year, Huawei announced that it would join the first batch of 18 car companies to officially launch the "5G Automotive Ecosystem" to accelerate the commercialization of 5G technology in the automotive industry and jointly create 5G cars that consumers can perceive.

The first batch of lists includes FAW Group (FAW Hongqi, FAW Besturn, FAW Jiefang), Changan Automobile, Dongfeng Group (Dongfeng Passenger Vehicle, Dongfeng Xiaokang), SAIC Group (SAIC Passenger Vehicle, SAIC-GM Wuling), GAC Group (GAC New Energy), BAIC Group (BAIC New Energy), BYD, Great Wall Motors, Chery Holdings, JAC, Yutong (bus), Cyrus, Nanjing Iveco, T3 Travel, etc.

In addition, Huawei HiCar has cooperated with more than 150 models, and more than 5 million cars will be pre-installed with Huawei HiCar in 2021. The new cars cooperating between car companies and Huawei have not yet been launched, but they have become a key publicity point for car companies. The reason is that on the one hand, Huawei's advantages in technologies such as 5G have penetrated deep into the consumer level; on the other hand, the architecture and model developed by Huawei are subverting the current highly customized automobile business model.

Sinolink Securities Research believes that from the long-term design concept of Huawei’s CCA+VehicleStack architecture, the goal is to achieve the upgrade and reuse of software across models and car companies, as well as the scalability of hardware , replaceable, and even plug-and-play sensors. In addition, this architecture strives to build a credible security system, specifically including the digital security, network security, functional safety and privacy protection of the entire vehicle, making the vehicle a platform for continuous value creation. When cars are sold to consumers, more applications and services can be purchased on the car platform just like smartphones, providing OEMs and developers with room for continued profitability, thus forming a positive business cycle.

Based on this, Huawei has become the leader of Tier 1 in automotive intelligent solutions and the core selling point of cooperative vehicles.

Can Huawei be disrupted?

In fact, Huawei’s automotive business does not develop independently. Huawei is trying to create a “1+8+N” full-scenario experience model.

The so-called "1+8+N" full-scenario experience, 1 refers to mobile phones, 8 refers to cars, speakers, headphones, watches/bracelets, tablets, large screens, PCs, AR/VR , N is a pan-IoT device. The rich products will build a complete 5G service ecosystem for Huawei, covering Huawei's full-scenario life model.

In the previous Huawei organizational structure, Huawei was divided into three major BGs and two major BUs: Carrier BG, Enterprise BG, Consumer BG and Cloud&AI BU (cloud business), Smart Car Solutions BU. At the beginning of this year, Ren Zhengfei personally signed company documents, elevating Cloud & AI to Huawei's fourth largest BG, and Hou Jinlong served as the president of Cloud & AI BG. After the divestiture of Honor's mobile phone business, there will be a gap in Huawei's consumer BG business. After the new adjustments, Huawei's automotive business has just filled this gap.

Huawei’s dominance in the mobile phone business will also provide more room for imagination for its automotive business. At the 2020 Beijing Auto Show, Huawei demonstrated the three major platforms of Hongmeng Automotive OS software platform, Hongmeng Automotive Ecosystem Platform and cockpit intelligent hardware in the smart cockpit. The main features are: system platformization, hardware modularization, and interface standardization; hardware is replaceable, The software can be upgraded and applications can be expanded; it reduces the difficulty of integrating and developing cockpit systems for car companies.

Some people believe that because the Hongmeng system connects the Internet of Things and mobile operating systems, Hongmeng’s great opportunities also lie in the field of Internet of Vehicles, which has huge room for development. According to a McKinsey research report, China is likely to become the world's largest autonomous driving market in the future. By 2030, autonomous driving-related new car sales and travel services will exceed US$500 billion.

In fact, in 2013, when Huawei entered the Internet of Vehicles, Internet of Vehicles has become one of the hottest keywords in the automotive industry. At the launch of Huawei's new automotive module ME909T in 2013, Roger Lanctot, a senior analyst in the global automotive industry from Strategy Analytics, said: "If new energy has created the current automotive industry revolution, then the Internet of Vehicles will set off the next revolution. "The automobile revolution."

Today, the automobile revolution initiated by the Internet of Vehicles is still in its infancy.

The "New Energy Vehicle Industry Development Plan (2021-2035)" issued by the General Office of the State Council in November 2020 pointed out: "The new energy vehicle industry faces unprecedented development opportunities from 2021 to 2035 and has become an important engine for continued growth of the world economy. The transformation of automobiles from simple means of transportation to intelligent terminals, energy storage units, and digital spaces has driven the transformation of energy transportation and information and communication infrastructure, effectively promoted the optimization of energy consumption structure, intelligent transportation systems, and smart city construction. It has broad market prospects and huge potential. Growth potential."

In general, the strong position and sense of superiority that traditional OEMs have had over the years in the face of parts companies are no longer suitable for the field of Internet of Vehicles, and their Tire?1 status in the field of Internet of Vehicles will also be lost. further highlighted. But the fact that cannot be ignored is that the automotive industry still lacks Internet of Vehicles products that are attractive enough to users, and most car users are still unable to get rid of their dependence on mobile phone navigation.

In the future, the industry will wait and see whether the full-scenario automotive model created by Huawei can subvert the field of Internet of Vehicles.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.