GE and Huawei develop smart machines in China
General Electric Co has announced that it will enter into a partnership with Huawei Technologies Co Ltd to develop smart machines. These will boost productivity as part of a drive to promote the company’s "industrial internet" operations in China.
The US company announced the partnership while it launched an $11 million digital space in Shanghai, which will incubate start-ups and enable developers to work on new software applications.
The move is part of GE's plans to lead a productivity revolution in global industry by combining machinery with analytics, after selling off its financial assets while undertaking a major restructuring.
Chief Digital Officer Bill Ruh said the world's biggest maker of jet engines and diesel locomotives had already made $500 million in productivity savings for itself this year by using smarter machines, and he expected this to grow to $1 billion in total by 2020.
"Once we got it right for ourselves we take it to our customers ... We're bringing this to China, we're open for business in China today to be able to do this."
GE is investing $500 million a year in software as part of the digital drive, and Ruh said the company expected the products to bring in about $6 billion in revenue this year. In September, it said its portfolio of software-related products would yield more than $5 billion in revenue in 2015, swelling to more than $15 billion by 2020. The company posted about $150 billion in revenue in 2014.
GE says it is crucial for industrial firms to digitise their production lines to remain competitive at a time when productivity has fallen from 4 percent to 1 percent globally. The technology promises to connect machines and produce data that can be analysed, for example, to reduce carbon emissions, lower maintenance costs or improve safety.
GE Vice Chairman John Rice said it was difficult to calculate the potential size of the "industrial internet" market: "It's potentially bigger than any estimates I've seen, because these capabilities are all going to be developed."
The partnership with Huawei would see the Chinese tech firm adopt GE's Predix operating system, which is already used by China Eastern Airlines Corp, China Telecom and on Tianjin city's street lamps grid.