Huawei 2011 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2011 Huawei annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

68
/
Operational Risks
■Business continuity: Although Huawei strives to
avoid single-source supplier solutions, it is not always
possible. To nd an alternative supplier or to re-design
products may take significant time. As such, supply
and delivery of our products to our customers could
be disrupted if any of our single-source suppliers
were to meet with difficulties. To mitigate this risk,
we periodically evaluate and conduct audits on
our suppliers, and initiate product replacements or
redesign to reduce the risk of obsolescence.
■Rising labor costs: Increasing labor costs in China may
offset the company's efforts to reduce our product
cost and ultimately affect our protability.
■Information security: While Huawei has judiciously
adopted information security measures to protect our
intellectual property rights, they may not be adequate
to prevent infringement or improper use of our
information, patents, or licensing. Misappropriations
of this nature will cause losses to Huawei even though
we may be protected to some extent by intellectual
property law.
Financial Risks
For further information on nancial risks, see "Financial
Risk Management" on pages 22 to 23 of this Annual
Report.
Risk Factors