Huawei 'Open' to Opportunities in North America, Executive Says

By Olga Kharif

The Chinese telecom equipment maker is looking to broaden U.S. operations as Palm looks for a buyer
Huawei Technologies, China's biggest maker of phone equipment, is "open to all the possible opportunities" for North American expansion, said Charlie Chen, a senior vice-president at the company.

Chen, who works in marketing and product management for the company's North American division, was responding to a question about whether Huawei may be interested in purchasing Palm the maker of the Pre smartphone. He declined to comment specifically on Palm in the interview with Bloomberg BusinessWeek.com.

Based in Shenzhen, China, Huawei has struggled to make inroads in the U.S. handset market. A purchase of Palm would help a foreign buyer compete with smartphone makers including Apple (AAPL) and Research In Motion (RIMN)"The attraction of Palm to the various Asian companies is that Palm would provide them with some entry into the U.S. market," said Lawrence Harris, an analyst at CL KING &ASOCIATES who has a neutral rating on Palm.
Palm is working with Goldman Sachs Group (GS)and Frank Quattrone's QATALIST PARTNER to find a buyer for the company, three people familiar with the situation said earlier this week.

Palm's stock rose 3.1% on Apr. 14 after Philip Falcone's Harbinger Capital Partners reported buying 9.5 of the company common shares . It gained 16¢ to 5.32 on the Nasdaq Stock Market.

North American Ambitions

Huawei is eager to expand North American phone sales, Chen said. "We see it's more and more important to have smartphones in this market," he said.
Huawei sells smartphones based on Google's(GOOG)Android software in countries such as the U.K. The Chinese company expects to increase its North American employee base by 50% to about 1,500 this year, Chen said. Closely held Huawei has nine North American offices, including in Toronto, Chicago, and San Diego.

Palm approached Huawei in February through an investment bank for "preliminary discussions" about a possible acquisition, Reuters reported on Apr. 13, citing a person familiar with the matter. Palm spokeswoman Lynn Fox didn't immediately respond to requests for comment.

Last year, Huawei's North American sales rose 63% to $408 million as the company began supplying equipment for Clearwire (CLWR)a provider of high-speed wireless Internet access. Other customers in the region include MetroPCS Communications(PCS)which sells one touchscreen Huawei phone. "In the handset business, we see tremendous potential and growth," Chen said.