Huawei 2011 Annual Report Download - page 28

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Research and Development
We have over 62,000 product and solution R&D
employees, which comprise more than 44% of Huawei's
total employees worldwide. We have set up 23 research
centers in Germany, Sweden, the UK, France, Italy,
Russia, India, China, and other countries. In addition,
we have established 34 joint innovation centers with
top carriers to transform leading technologies into
competitive advantages and business success for our
customers.
As of 2011, Huawei had led 36,344 patent applications
in China, 10,650 under the Patent Cooperation Treaty
(PCT), and 10,978 patent applications overseas. We
have been awarded 23,522 patent licenses, 90% of
which are invention patents. With regard to cloud
computing technologies, Huawei possesses 685 patents
in China, 226 in Europe, and 107 in the US. Huawei
has played a major role in standards development in
cloud computing and is one of the DMTF's 14 board
members. In addition, Huawei led the establishment
of the ARDM work group in the cloud computing/data
center sector for the IEFT and has served as the chair for
the group. Huawei also extensively participates in cloud
computing standards organizations.
Huawei supports mainstream international standards
and contributes to the formulation of such standards.
By the end of 2011, Huawei had joined 130 industry
standards organizations, such as the 3GPP, IETF, ITU,
OMA, ETSI, IEEE, and 3GPP2. In total, Huawei submitted
more than 28,000 proposals to these standards
organizations and has served as a board member
for OMA, CCSA, ETSI, ATIS, and numerous other
authoritative organizations in which it holds more than
180 positions.
In 2011, Huawei was awarded six top LTE awards
from around the globe which served as the industry's
afrmation of our continued investment and signicant
contributions to the research and development of LTE
technology, commercial practices, standard patents,
integration of the industry chain, and other areas.
Huawei's R&D expenses totaled CNY23,696 million in
2011, and the company has spent accumulatively over
CNY100 billion on R&D over the last decade.
Interest Rate Risk
Huawei's interest rate risk arises from the company's
interest-bearing assets and interest-bearing liabilities;
consequently, interest rate uctuations affect its interest
income and interest expense. Through the quantication
and analysis of its interest rate exposures, the company
uses a combination of xed-rate and variable-rate bank
loans to manage its interest rate risks.
Credit Risk
The company has established and implemented standard
credit management policies, institutions, processes, IT
systems, and credit risk evaluation models. In addition,
dedicated credit management functions have been
established across all regions and business units. The
company uses the credit risk evaluation models to
determine customer credit ratings and credit limits, and has
implemented various risk control points over key processes
along the end-to-end sales cycle. The company's Credit
Management Department regularly evaluates global credit
risk exposures, estimates potential losses, and allocates bad
debt provisions as appropriate. In the event that the credit
risk for a specic customer or outstanding trade receivable
becomes inappropriately high, a special handling process is
initiated to mitigate the risk.
Sales nancing
The company has established a global sales financing
team committed to understanding our customers'
nancing needs and to providing customized nancing
solutions. At the same time, Huawei has set up related
operational policies, processes, systems, and standards
to manage its overall nancing business process and to
control the inherent risks.
Management Discussion and Analysis