Huawei Technology Co Ltd (SHE:002502), a Chinese telecommunications equipment vendor, announced Monday that it planned to open a research and development center for smartphone and tablet software in Finland, neighboring its rival, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V).
In a move to expand its business rapidly, the Chinese vendor has planned to invest 70 million euros ($90 million) in opening up its R&D centers in Europe.
“The Finnish R&D center will be a key driver in Huawei’s research and development of new technologies for mobile devices,” the company said in a statement.
According to the Chinese vendor, the new R&D center is initially aimed to start with 30 employees and the company targets it to grow to 100 within the next five years. The chief purpose of its research and development, for starters, is the software development for smartphones, tablets, and rich media devices, using operating systems that run Android and Windows Phone.
“The open and innovative environment in Finland is an ideal place for Huawei Technology Co Ltd (SHE:002502) to strengthen our global R&D capabilities for devices, creating opportunities for both Huawei and the Finnish telecommunications industry,” said Kenneth Fredriksen, Vice-President, Huawei Central, Eastern and Nordic Europe.
It is, however, still unclear as to why Huawei chose to open its centers in Europe instead of hiring the people of its native land. Speculations, on the other hand, point at the fact that Nokia has been suffering precipitous fall in the market share for a few years. While Nokia is cutting off its own staff and shutting down facilities around the world, Huawei Technology Co Ltd (SHE:002502) sees it as a golden chance to prove that it is a major global player in technology development.
Another aspect of its decision to operate from Europe could be the security questions that the Chinese vendor has been facing in US and Australia. “Europe has proven to be quite an open business environment for Huawei,” company spokesman Roland Sladek said.
Huawei Technology Co Ltd (SHE:002502) already has a research center in Italy and is currently weighing the possibilities of opening a new center in Spain. The company aims to expand on a global scale, with an expected investment of $2.0 billion in Britain and to roughly double its workforce in the country within five years.