The United States trade ban has been creating quite an impact on businesses, the stock market and other sectors of the economy. The most recent impact has been felt by Huawei, the number two smartphone maker in the world.
Huawei is launching its next flagship smartphone. Unfortunately for consumers, it will not be able to use Google apps and services because of the current US trade ban. The device will be launched without licensed access to the number one smartphone operating system in the world – Google’s Android – or any of Google’s universal apps.
According to Arjun Kharpal,
“The Mate 30 will be showcased at a September 19 launch event in Munich, Germany, the source said. It will be powered by Huawei’s latest processor called the Kirin 990 which is yet to be unveiled. The Mate 30 will be able to connect to next-generation mobile networks known as 5G which promise super-fast data speeds. Huawei is pushing ahead with the launch despite being on a U.S. blacklist known as the Entity List.” (1)
The 5G-capable Mate 30 is scheduled to be revealed on September 19th at an event in Munich, Germany. This is the first major phone released by the company since the U.S. trade restrictions were established. This launch is by a premium company that has seen its shares of the European smartphone market soar by 55.7% in 2018, and now the company is experiencing a blanket of uncertainty due to the impact of the US trade war with China.
Details of the Clash
Discontinuing Trade Activities
Under the new trade restrictions instituted by the US, Google says it would not be possible for the new Huawei phone to be able to host Google services including Maps, YouTube, Pay, Photos, or the Play Store.
Apart from the ban that was extended to software products and services like Google’s Android, the operating system used by Huawei’s smartphones was also affected and has caused other American companies to also stop trade activities with Huawei. As soon as Huawei was placed on the entity list, several American chipmakers confirmed they would stop supplying Huawei with their products, including Intel, Qualcomm, Xilinx, and Broadcom.
As per Sneha Nahata,
“With Huawei’s ban, many US chip companies that supply Huawei also suffered as they derive a large part of their revenue from the telecom company. The PHLX Semiconductor Index fell ~4.02% yesterday.
Chip makers Intel (INTC), Qualcomm (QCOM), Xilinx (XLNX), and Broadcom (AVGO) have reportedly stopped supplying Huawei until further notice. Broadcom stock fell ~5.9% yesterday, and Qualcomm, Xilinx, and Intel fell ~6%, ~3.6%, and ~2.9%, respectively. Memory chip makers Micron Technology (MU) and Western Digital (WDC) fell ~4% and 6%, respectively, while semiconductor stocks Marvell Technology (MRVL), Advanced Micro Devices (AMD) and NVIDIA (NVDA) fell ~3.9%, ~2.98%, and ~3.05%.
NeoPhotonics (NPTN), another US supplier that depends on Huawei for revenue (it contributes ~47% of its total revenue), has fallen 32% since Huawei was blacklisted. Qorvo (QRVO) and Skyworks Solutions (SWKS), which earn ~10% of their revenue from Huawei, fell ~4.16% and ~2.9%, respectively, yesterday.” (2)
The U.S. government blacklisted the Chinese firm in May over claims that it was a threat to U.S. national security because of its close ties with the Chinese military. The US government also fears the company could provide the Chinese government with a backdoor into foreign communications networks. Huawei has denied all such claims.
The Way Around
The US government had already issued a temporary license in the summer and renewed it again last week. This particular license is for Huawei to maintain its existing device. However, Google says that the license does not extend to new products released by the company such as Mate30. U.S. companies have the liberty to apply for exemption from the ban for specific products. Google has not released any information regarding the matter.
Huawei plans to continue using the Android OS and ecosystem if the U.S. government allows them to do so, if not they will carry on with their development process to nurture their operating system and ecosystem. The company unveiled its very own operating system, HarmonyOS, which can be used if it no longer has access to Android. However, Huawei maintains that Google’s platform would be its first choice.
As per Gareth Beavis, Basil Kronfli,
“Huawei has also said to TechRadar that it will continue to do all it can to support the phones currently out in the wild, and is looking at other implications of Google’s decision.
The company told us: ‘Huawei has made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefited both users and the industry.’” (3)
Huawei has created a website to answer the concerns customers may have about the Google licensing issues called Huawei Answers. The Managing director of Huawei also stated that nothing has changed for the company and despite the ban, they will continue to provide software and security updates for Android in the short and long term.
The Road Ahead
The way forward for the new smartphone device by Huawei, Mate30 is unclear. It is unclear if Huawei will use its recently launched operating system HarmonyOS on Mate30 or use the Android platform. So far, all sources suggest that Huawei wants to maintain its relationship with Google and still relies on Google.
However, if the company chooses to use the open-source version of Android on the phones, users in some parts of the world may be able to download Google apps themselves; however, the apps will not come pre-installed.