Ren Zhengfei's mid-year conference speech: AI/VR/AR is a big opportunity for Huawei

Recently, Ren Zhengfei said at the 2016 Mid-Annual Market Conference of Huawei: "The road ahead will not be covered with flowers." He pointed out that the transformation of human society into a smart society is an objective law, and no one can stop it. It is necessary to see the positive effects of artificial intelligence on society. "We must have strategic self-confidence and bravely embrace the challenge. The first confidence is that there is a window of opportunity, and the expansion of the pipeline and the increase in traffic create great opportunities; the second confidence is that our team can pick it up. Form this The team is very difficult. After 28 years of hardships, I have also planted a head and have climbed up from the mud pit. How many mistakes have we made to correct the situation today, and is the correction today scientific? Who knows. The miracles of the past were created by our group of people, and then we have to create even bigger miracles. Of course, today I will also talk about some shortcomings, which is the guide for everyone to upgrade to the general."

The following is the full text of Ren Zhengfei's speech:

Huawei Ren Zhengfei

First, opportunity, risk, strategic confidence

1. Opportunity: Clearing the image requires the low cost of broadband; AI, VR, and AR require low latency of the network.

The emergence of a smart society requires two basic conditions: First, high-definition images require low-cost broadband; second, AI, VR, and AR require low latency of the network. The two are not required to be implemented at the same time. The low cost of bandwidth will be urgent in the next 3-5 years; the low latency of the network may be urgently needed in the next 5-10 years. This is the two window of opportunity for the times. How do we achieve it?

The world's largest computer is used to study protein molecules. Now it is necessary to study the human brain. It should be more powerful than the research molecules. You can imagine how much artificial intelligence should be transmitted. If half of the seats are real people, the brain is counted and not transmitted; the other half is the robot, which is calculated to be sent to the data center, which gives us a huge flow of opportunities. Is it in the "brain" of the chip, or put the "brain" in the chip? This is another concept.

So, what is the big opportunity for Huawei? Big information traffic, the opportunity window has been opened to us, and the demand should be huge.

Why do we repeatedly emphasize the need to focus on the main channel? It is because we are confident that our assumptions about the big opportunities and opportunities in the future are correct. We will not lose sight of small profits and immediate interests, and lose big opportunities.

2, strategic self-confidence: 28 years of "strive out a hole, benefit a hole" of the accumulation of thin, capital and labor sharing mechanism, the spirit of collective struggle is uniquely competitive.

First of all, we would like to thank Apple, when the network traffic began to approach the period of very slow growth, if there is no mobile Internet promoted by Apple, Huawei may have collapsed. Now is the era of the big Internet, the future of the Internet of Things will replace the Internet, and its traffic is even greater. Assuming that this goal is correct, assuming that the transmission of large information traffic is correct, assuming that we will not succeed in content processing, we should stick to the pipeline of traffic transmission, and the traffic pipeline is getting thicker and thicker, which gives us The opportunity. The efforts of Huawei in the past 28 years have made it possible to accumulate today. In the field of large information transmission, we are likely to reach the no man's land. Therefore, we must establish a strategic confidence. We believe that in this era of great opportunities, we will be able to seize opportunities; we believe that our team will be able to carry the target of 200 billion US dollars in sales revenue in the future. Of course, our team should not be tired of the slogan of 150 billion yuan and 200 billion dollars. Don't wear red shoes. The company's goal is to guide the company's structural reform, mechanism reform, process reform... In order to adapt to the future, our capabilities can be adapted to it, not indicators, not KPIs, but core competitiveness. Otherwise we are Ye Gong Hao Long.

(1) The construction of a “customer-centered” market competition system, the organization of 170 countries, and a heroic team have been formed.

We spent twenty-eight years establishing a global market system, implementing organizational development, and the process is basically in place. But our ability has not yet fully activated, and if activated, we will have greater hope.

I have been to the representative office of a tough country and I feel that everyone is making progress. Now the IT department has given good support to the hard areas and the network is relatively developed. Working in hardships is a hero. Heroes also need to strengthen their learning. They use various methods to transform hero loyalty into ability. Huawei needs many cadres with comprehensive capabilities. It is difficult for a big country to integrate its own capabilities because the vertical sectors of the big countries are clearly divided. And working in a small country is more conducive to comprehensive growth, just like the "Northeast chaos stew", it will be sales, financial, installation, and clear solutions. If we go to those small countries and hardship areas, just to get high subsidies and accumulate some money, how can we call it responsible for our future?

There are few people in small countries, and they drink a cup of coffee every day after dinner. One person prepares a case. You are preparing for the case of ultra-wideband in Korea, and I am preparing for the case of Tibet. The network topology map of the responsible area is repeatedly deduced, and the satellite image is superimposed and then looked at. Analyze and analyze how the advanced case falls on this superimposed topological map. Doesn't the opportunity come? Does the operator welcome you, don’t you become a general? I heard that a young man is constantly measuring a Juke model and using this method to improve himself.

We must care for employees in small countries and hardship areas, and give them more training, which will help them transfer from heroes to schools.

(2) Objectively, R&D has made a great contribution to the development of the company. R&D must face the exploration of new technologies, and it must face the integration of customer needs and the sensitivity of demand. Be sure to manufacture products and services that meet your needs.

Yesterday, everyone raised a lot of questions about R&D. The spirit of “customer-centric” research and development is deteriorating, but we still have to objectively affirm the tremendous contribution made by R&D. Although we have invested in world-class R&D, why have we not produced world-class results? But part of it is to cultivate talent. After so many years of growth, we have spent a lot of money, such as IMS went the wrong way, and then SDN "started early, catch a late set." This is the difficult place for no one, because no one leads the way, and they groping forward. It is easy to go the wrong way when they leave, and then the people behind us have surpassed us. Now they are in a hurry. Don't be depressed because you made these mistakes. After all, most of us are still "farmers". Americans have been educated in advanced culture and have developed over 200 years. At this stage, it is natural to grow up in the forefront of the world. And we are "farmers" and can achieve the current level, which is actually much more difficult than them. We are actually westernized in the technical soul. Here, we would like to thank all the staff for their contributions, including the departing employees.

The goal of R&D is to shift from product development to support for business realization. What customers need is not products, but services and operations. Products need to be able to enable operations and services to achieve business realization. We should not simply pursue the indicators, but also consider the actual experience of the network. The products must be competitive and must support commercial realization.

The times require us to take a step forward, and research and development should further increase the sensitivity to customer needs. Whether our organization can move from technology classification to customer-oriented and demand-oriented collection. We need to think about how to turn hope into reality, how to combine technical idealism with realism of customer needs to meet customer needs. I must also affirm that I have been to many research institutes and see that the Institute has a lot of things ahead of the current society in theoretical research and future composition research. We still have great hope for the future.

(3) The management department has made great progress. It is difficult to imagine such a large turnover of a Chinese company. The problem is not that big. After 28 years, the process is basically formed, the electronic is being perfected, and the simplification is going on.

We are a company that really has no money. Others can produce $2 in value for five dollars, and we have a value of $4-5 for one dollar. Such an efficient global capital operation cannot be assured that we have a quality management team.

Our management system has made great progress. We have 241 subsidiaries around the world, and our business covers 170 countries. With such a large turnover, the problem is not that big. Of course, the sentence I said, the audit may not accept, they said that they saw a lot of problems. However, from the perspective of total business volume, our problems are not very large, and it is not easy to do this. Auditing and internal control have contributed a lot.

After 28 years, our process has basically taken shape, electronic support is improving, and our process simplification is still underway, so we believe that the company will support the company's sales revenue of 200 billion US dollars in the next 5 years.

(4) The continuous improvement of the supply chain over the years is in the right direction. The supply chain should be more open and proactive, creating a steel supply chain that is not bad and unscrupulous.

There is only one supply chain in our company, we can't get rid of it, and we can't run continuously without the company. In the past few years, the supply chain has established a fast supply network close to customers. The accounts are consistent, the five ones, the inventory ITO has been significantly improved, and the ability of lean manufacturing and procurement industry chain management has also been greatly improved.

The supply chain should be actively extended to product design and project operations. It is possible to promote a group of people in the first line, set up a “supply scene teacher” like the market, form a team of experts, focus on the management uncertainty work, be responsible for the design and management of supply scenarios, and solve the supply problems of products and contracts. This will make the PO accurate at one time.

Noah's Ark's artificial intelligence needs to enter the supply chain business, GTS service, we need to use artificial intelligence to solve the automation of another part of the deterministic work, and a part of the uncertainty work intelligent. We have a trillion-dollar network inventory, where are you going to find such a large artificial intelligence market!

(5) The terminal catches up with the communication and the image. After three years, the software must also catch up with the world's advanced.

In the past two years, the terminal has obviously made great progress. We caught up with a good time, the terminal is making structural adjustments, and the terminal staff is working hard. In terms of communication functions, we must be the world's number one; in terms of image capabilities, we should be the world's forefront in three years; in software, we must strive to catch up with the world's advanced in three years. I have seen that the coverage of terminals in all corners of the world is very strong, and the progress of the quality of the terminal products is also gratifying. In the future, the frontier R&D investment is also good, and the collaborations given by the various research departments of the company are also realistic.

I hope that the terminal will be assembled into the best mobile phone in the world with the best lens, the best sound, and the best computing power in the world. These components do not need to be developed by ourselves, and all of our research systems and strategic cooperation supplier platforms are fully integrated and fully integrated to share benefits. Even if most of us are researching, we must let our partners integrate production and component supply. Never farmer. We can share benefits for our employees. Why can we not share our benefits with our strategic partners? We must not be "independent" and become international orphans.

Some people say that the terminal has no future, and many manufacturers can catch up. But we think, how can you experience the progress of the network? You are now raising your hands and grabbing a piece of advanced software. Whoever caught it, I will award it. It is impossible to do it, and it depends on the terminal. The future of the terminal is infinite, but the market demand may be wave-like. I don't know where the demand will go. MarkeTIng should keep up with it.

Of course, the terminal does not exactly refer to the mobile phone. The terminal must be the most important tool for smart devices, but I don't know what to do with this tool. I believe that we will seize the opportunity in the era of opportunity.

3. Risk

(1) The world black swan event is flying, the world will produce fluctuations that we can't imagine, and our strict internal and external compliance has not been fully established. The effectiveness of management and the health of finance still need to be worked hard.

In the next three to five years, the company has great risks. Huawei must comply with laws and regulations and respond to the uncertainty of international politics with certainty of legal compliance. The whole world is changing, but we can be sure that we are law-abiding and do not violate the law in all countries of the world.

Subsidiary directors should dare to expose problems and manage internal and external compliance boundaries. Don't break the rules, don't pay bribes, don't accept bribes, don't breed corruption inside, don't violate the laws of the countries involved, UN laws, and do not violate US laws in sensitive areas. To be strictly controlled within this range, we are businessmen, we are only doing business.

Every delegate should not play politics. Representation of public relations that can be done, based on the appropriate public relations based on the purpose of the sale. If someone likes to do this, they can transfer to the public relations department.

All representative offices must strictly control the quality of contracts and continuously improve the effectiveness of their operations.

(2) The accumulation of economic problems in many countries is difficult to return; each representative office must be firmly established on the basis of high contract quality. Now, the pace of shifting from sales center to comprehensive construction is still unsatisfactory. We must survive this crisis.

Due to the global economic environment, the credit risk of major customers may break out and may not be able to repay the debt due: in the first half of the year, Brazil’s Oi filed for bankruptcy and India’s Reliance debt risk, which gave us a very clear request: Huawei’s growth should be established. In terms of high contract quality. If there is a crisis in the international political situation, our company still has the money to buy the "old-faced hoe" and it will survive. What if there is no money? Therefore, we cannot rush to the past, we must strengthen contract management, and emphasize efficiency and efficiency in the market. In particular, the management of high-risk countries. Increase the proportion of advance payment to account, reduce the proportion of final inspection, so that this year's growth process can ensure quality growth. Opportunities, risks, we have to put risk ahead of sales. Countries that do not see opportunities for the time being can withdraw their employees to the strategic reserve team to reduce expenses.

We used to resell in the past, and now we have to change to the comprehensive construction of the representative office. The growth of the benefits of each representative office must be firmly established on the basis of high contract quality. Our contract must have a second approval. The first contract is called configuration, the price clause is confirmed, and the second contract is the contractual commitment clause. The regional management department has to do a guide: the contract will be reviewed and the terms will not be saved. How did the Bank of Bahrain get rid of it? The authorization system is not clear. The second contract review, first of all, on the saleable list, whether all the products sold are authorized to be sold, not in the list can not promise; second, to check whether the contract terms have start and end, deferred payment There are late fees and interest, whether the law is complied with.

In fact, some quality customers, we have not made a good customer. If you think about this kind of risk, if we continue to commit it, we may not be able to survive this crisis era. The representative office in Thailand has a reflection. I only write three words "true heroes". There is no need to write more words to evaluate. They dare to "see the red bayonet" and dare to shoot at themselves. I sincerely praise them as true heroes. I hope that every representative office and every department will dare to expose their own problems. As long as they can be revealed, there will be improvement measures and they will move toward a better tomorrow.

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