Siemens continues to deepen its ties with Chinese rival Huawei Technologies. The engineering and manufacturing conglomerate agreed Friday to resell routers and switches from Huawei's Quidway product line just eight months after the two companies formed a joint venture for manufacturing new mobile broadband systems in China.
"The deal is part of our multivendor strategy to supply enterprise network infrastructure," said Siemens spokesman Thomas Schepp. "In Huawei we have found a partner that offers enterprise equipment at attractive prices and has a powerful market position in Asia, particularly its home market in China."
Numerous enterprise customers have been asking Siemens -- which operates today as a systems integrator -- for less expensive network equipment, according to Schepp. "Our partnership with Huawei will allow us to offer a range of routers, bridges and other networking systems at lower prices," he said. "Although we expect most demand for Huawei products to come from Asia, we assume customers in some of our other markets will be interested in this alternative as well."
Huawei joins three other preferred suppliers of enterprise equipment to Siemens: Cisco Systems, Enterasys Networks and Extreme Networks.
Siemens abandoned the enterprise manufacturing business in May 2003 when it sold its network subsidiary Unisphere Networks, which made routers, gateway devices and other equipment, to Juniper Networks. The German company has a minority stake in Juniper.
In February, Siemens took a significant step toward expanding its operations in China by teaming with Huawei to develop, manufacture and sell high-speed mobile network systems based on the TD-SCDMA (Time Division Synchronous Code Division Multiple Access) technology. The technology, which has been largely developed in China, is being promoted by the Chinese government as a 3G (third-generation) standard, alongside W-CDMA (Wideband CDMA) and CDMA2000.
The venture aims to participate in 3G pilots organized by China's Ministry of Information Industry during the year. Siemens, which has been developing TD-SCDMA systems since 1998, is currently testing the technology in several network pilots in China.
Siemens and Huawei, which is located in Shenzhen, China, plan to invest more than US$100 million in the venture.