Reuters states that Google has suspended any business with Huawei requiring the transfer of US-designed or made hardware, software or technical services – apart from any available via open source.
This is a direct result of US President Donald Trump’s executive order that may stop many Chinese companies, including Huawei, from selling to, or buying from US companies.
The Reuters report is here, and GadgetGuy has no further inside information apart from what it has read in recent days. The report uses terms like ‘could’ and ‘may’ but the implications are ‘will’.
Google states that it is “complying with the order and reviewing the implications” without giving many specifics.
Analysts say that means Huawei’s loss of access to Google Android OS, regular OS updates, security patches, and all Google Services, including the Play Store and its g-suite apps.
This is no different from inside China, where Google Android is OK, but the Google Play store and services are not available. Hence Huawei has its own EMUI User Interface, productivity apps and access to several local Android app stores.
Update 6 PM 21 May
For the next 90-days, Huawei can purchase ‘approved’ American-made goods and services “to maintain existing networks and provide software updates to existing Huawei handsets”. However, “The company is still prohibited from buying American parts and components to manufacture new products without license approvals that likely will be denied”. Reuters.
What could this mean to Huawei?
If Google Android is out, then it will need replacing with Huawei’s Android fork using the Android Open Source Project and for Huawei to take on patches and security updates. For the rest of the world, an Android fork – No Pie for you – with no access to the Play Store or Google’s expertise is a deal breaker.
Huawei is also a customer of Sony (camera sensors), Samsung (some screens, and memory), Japan Display (screens), TSMC (SoC), SK Hynix (memory), Nanya (memory), Leica (optics), Qualcomm, Intel, Micron, Skyworks, Qorvo and 40+ more global suppliers with US roots or technology.
Yu Chengdong, Huawei’s consumer business group chief, told media in Shenzhen (about recent component shortages).
“We are laying out plans for all our key smartphone parts. Huawei might not manufacture these components directly, but it doesn’t mean we do not own the technology to manufacture them ourselves,” said Yu.
Huawei has a huge $20b R&D budget and is better able to weather the storm – at least in China. It also has smartphone manufacturing in India although the US Executive Order is for the whole company, not its divisions or manufacturing locations.
Are other Chinese phone makers so screwed?
It would be trite to say that Trump has specifically targeted Huawei and ZTE. The Executive order uses ambiguous terms of banning, “US Telecoms from using equipment designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.” That is a very broad church!
It is likely that companies that make smartphones but not telecoms infrastructure equipment will not be affected, but we also need to take China’s Made in China 2025 policy into account which effectively mandates 100% Chinese components, technology and IP for any product made or assembled in China by 2025.
And we are going to see increasing use of Chinese designed and made components in Chinese assembled smartphones – Kirin versus Qualcomm, Chinese screens versus Samsung and LG screens etc. No doubt these will have similar functionality and made under quality assurance regimens, but there will be a perceived gap between east and west tech.
Whatever the outcome, the Executive order has 150 days to sort it out. Analysts suggest Trump will insist on adherence to the letter of the law.
GadgetGuy’s comment. This is a mess
The primary issue relates to, but is not solely about, protecting and securing the burgeoning US 5G telecoms infrastructure. It means that the US is entitled to reject Chinese technology suppliers (like Huawei and ZTE), or any goods assembled in China by any international company, from its critical infrastructure because these companies may be subject to the laws of China. Theoretically, the Chinese Government could order secret backdoors and vital information exfiltrated.
There are sub-issues about stealing technology and these relate to the inability to buy US tech or components which Google is caught up in.
But for the most part, it is about protecting critical infrastructure, and this could go further to cover sea and airports, transport corridors, agriculture, mining and anything the US relies on.
The US and its five-eye neighbours (including Australia and many more) are wholly within their rights to protect national security in any way they see fit. Why? Because you and I have no clue about the security issues of critical infrastructure. We should demand such vigilance and be very grateful for that.
But Huawei is a huge conglomerate of interests. Its consumer smartphone business growth has been spectacular rising to the #2 global supplier by market share, knocking Apple off its #2 place and tapping on #1 Samsung’s door.
It has done that by continually lifting the bar, over specifying and keenly pricing its gear. No one can argue that last year’s Mate 20/Pro and P30/Pro this year have the best camera technology at the time and the phones are ‘Galaxy’ class.
Whether the Google incident is an unintended casualty of the US Executive Order or a carefully planned grand scheme to put good old US-based Apple back on top is immaterial.
Why? Any government has the right to make any decision for its sovereign territory and its citizens, and we vote for them to do so.
If the action is unintended, then Huawei et al. will solve this rationally and quickly and get back to business as usual.
GadgetGuy has asked Huawei for considered comment but in all
Update: 10.15 AM, 21 May
Huawei has provided a quick response.
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 benefitted both users and the industry.
Huawei will continue to provide security updates and after sales services to all existing Huawei and Honor smartphone and tablet products covering those have been sold or still in stock globally. We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally.
Update: 11.14 AM, 21 May
Jeremy Mitchell, Director of Corporate Affairs, Huawei Australia:
We want to assure Huawei customers in Australia that the US actions involving Google will not impact consumers with a Huawei smartphone or tablet or those that are planning to buy a Huawei device in the near future from an Australian retail outlet.
Consumers with Huawei devices will still receive security updates and be able to use Google apps. Huawei will continue to provide after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally.
Australian consumers will be able to continue using Google services like Google Play and Gmail on their Huawei phones as they normally would.
Google Android updates will continue to be provided for Huawei EMUI and Google apps will not be affected.
We thank Huawei for its prompt response. In essence, nothing changes for existing Huawei owners or those who buy from existing stocks. You can use Google services.
While Huawei says it will continue to provide Google Android Updates via EMUI that really only relates to the existing version of Android you have. The ban affects all Huawei phones manufactured from this point forward and we look forward to seeing how Huawei handles that.