How do ICT incumbent firms embed IoT to 5G: The Huawei Case

Abstract

Application scenarios that combine technology with business intent have received increasing attention from various industry players. Fifth-generation mobile technology (5G) has been adopted by Information and Communication Technology (ICT) incumbent firms as the main measure of embedding the emerging Internet of Things (IoT) to their traditional ICT paradigm. These firms have invested a great deal of effort into the diffusion of ICT paradigm to IoT where ICT technologies are used to support application-scenario-dominant digitalization. Some studies have explained the role of political, cultural and cognitive embeddedness in formulating firms’ competitive strategies. However, few studies have investigated the role of technological embeddedness ─ the success of adopting a technology, or the influence on the configuration of a technology ─ in firms’ competitive strategy. This research takes Huawei as a representative case to explore how ICT incumbent firms may strategically use the technological embeddedness in the expansion of the ICT paradigm to the IoT era. Specifically, this paper explores Huawei's technological embeddedness strategy in the digitalization process which may substantially present the 5G technological diffusion form ICT to IoT. The study collects the data comprising patent data pertaining to Huawei's standard essential patents, patent litigation and licensing negotiations; and the digitalization contract information specifying the relations that Huawei involves with IoT firms. By analyzing the research data, the paper finds that Huawei's formulation of technological embeddedness strategy comprises categorizing Huawei's relations with IoT firms that may embed IoT to ICT in the digitalization process; finding the possible synergy driven by Huawei's 5G technology in each category; and deploying the resources and capability to make Huawei's 5G technology dominate the development of the possible synergy. The paper enhances the understanding of the interaction between ICT and IoT in addition to the possible competitive strategy of incumbent firms within this interaction.