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General Electric Co. said it would partner with Huawei Technologies Co Ltd to develop smart machines designed to boost productivity, part of a drive to promote its "industrial internet" business in China.
GE announced the partnership as it launched an $11 million digital space in Shanghai, where it plans to incubate start-ups and have developers work on new software applications to make machines more intelligent. The move is part of GE's ambitious plans to lead a productivity revolution in global industry by combining machinery with analytics, after selling off its financial assets and embarking on a major restructuring.
GE is investing $500 million annually in software as part of the digital drive, and the company expects 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.
Industrial Revolution
GE says it is crucial for industrial firms to digitize 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 analyzed, for example, to reduce carbon emissions, lower maintenance costs or improve safety.
The tie-up with Huawei would see the Chinese communications technology 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.
GE would in turn "leverage" Huawei's product portfolio and "co-create end-to-end applications for customers", the companies said in a statement.
Keywords: Smart Machines, Industrial Internet, Machinery, Analytics, Communications Technology, ARC Advisory Group.