Electronic News: Cisco under assault by Huawei

While at the American Airlines Admirals Club in San Jose last week, I ran across a copy of Electronic News, a weekly that I used to faithfully read 20 years ago when I worked for IBM. The headline on the issue read “Information Huawei” and it caught my eye. Turns out that Cisco is under assault by this Chinese company with over 22,000 employees. Cisco’s weakness has sent many of its suppliers to Huawei as they scamble to maintain their own businesses.

Analysts say Huawei routers are tough to distinguish from Cisco’s in quality and performance, and Cisco is furiously trying to stop them.

Working in Huawei’s favor is a legion of battered communications IC companies that has spent the last four years intensively developing network processors and optical speed-capable transceivers, framers and content addressable memories for Cisco to buy. But Cisco’s once robust purchasing has since slowed to a crawl, triggered by a downturn in the communications market that also hit North American rivals Lucent and Nortel Networks.

That has played squarely into Huawei’s hands. The embrace of China’s largest networking OEM and the effect its lower prices will have on the world market for routers and other Internet protocol-based communications contracts is very significant, analysts say.

In a similar story, CNET reported last week that Taiwanese chipmaker Via will be providing the processor chips for Wal-Mart’s new line of $199 PC’s.

Via got into the microprocessor market in 1999 when it acquired the microprocessor divisions of National Semiconductor and IDT named, respectively, Cyrix and Centaur. The first chips came out in 2000.

The company specializes in cut-rate processors that largely get sold in developing nations. In China, for instance, many manufacturers bundle Via’s chips with computers running Microsoft’s ancient DOS operating system.

Via’s press release on the Wal-Mart announcement is available here.

This site uses Akismet to reduce spam. Learn how your comment data is processed.