Huawei Looking to Overtake Ericsson in R&D Investment

Huawei is looking to increase its investment on R&D and could outspend Ericsson this year, the company's head of R&D, Li Yingtao has said.

The company spent US$4.9 billion in 2012 on research and development but is looking to increase that in order to persuade customers that it isn't just a vendor that competes on price, but also on quality.

"The bottom line when you talk to customers about building a network is that they will ask: 'can you do it or not?'" Li told Bloomberg News. "That ability depends mostly on innovation capacity. That's why we will continue to increase our investments."

Huawei and Ericsson spent comparable amounts in cash terms last year, both around US$4.9 billion on research. However, a percentage of Huawei's spending would have gone on handsets, which Ericsson no longer spends money on.

In terms of a percentage of revenues, Ericsson spent 14.4% of its revenues on research, compared to 13.7% by Huawei.

On the web: Bloomberg News