China tech firms focus on region

The Middle East is becoming an important market for Chinese technology firms. More and more users log on to work on Lenovo PCs and laptops, make calls on ZTE-manufactured phones through a mobile network built by Huawei.

This year, 130 Chinese companies exhibited at Gitex Technology Week in Dubai, up from 96 last year. The region has become a focal point for these firms to tap into the burgeoning telecoms and technology market.

In the third quarter of this year, Lenovo's market share in the Middle East and Africa grew 46 per cent year-on-year, and now accounts for 7.5 per cent. Its market share in Saudi Arabia grew 97 per cent to 8.8 per cent. Lenovo is the world's biggest PC manufacturer, although it still lags behind HP in the region.

"We have done very well in the Middle East. This is a significant market for us with a lot of room for growth," said Oliver Ebel, the executive director and general manager of Lenovo Middle East & Africa.

Lenovo opened an office in Cairo last year amid the political uncertainty that followed the removal of Hosni Mubarak as the president, and reported its market share reached 11.9 per cent in the third quarter this year.

Perhaps the biggest success story is telecoms vendor Huawei, which reported sales of US$3.22bn (Dh11.83) from its Middle East operations last year.

One third of the world's telecoms networks use equipment from Huawei.

It was Huawei that built the UAE's first third-generation (3G) network and built Qatar Telecoms' fibre-to-the-home network to provide high-speed internet connectivity to residential and commercial buildings. Huawei has agreements with eight mobile operators in the GCC to launch Long Term Evolution (LTE) a super-speed mobile broadband technology.

"What's made Huawei boom has been the focus on LTE. When they entered the market, they were effectively under-cutting the competition significantly, but they were offering similar if not better technology," said Andrew Baul-Lewis, the director of information and communication technologies practice at Frost & Sullivan.

It was thanks in part to Chinese government subsidies, which enabled Huawei to lower its prices. This has sparked fears and accusations that Huawei is using its networks to spy for China.

"It hasn't had a massive effect on our business in the region, it is very much a political, China-bashing move by the US. If we had insecure or dodgy equipment used for spying, it would be commercial suicide," said Andrew Childs, the marketing and business development director at Huawei.

Rival Chinese telecoms vendor ZTE has also been caught up in the accusations.

The company is currently being pressured to pull out of Iran in order to continue partnering with US companies.