Since the beginning of the week, Huawei – one of the most promising tech companies on the market – is in danger of losing huge amounts of money and the ability to compete on an equal footing with other major smartphone manufacturers, such as Samsung. Huawei has in fact lost its license to use the Android operating system in its richest and most complete version, following a suspension decided by Google to comply with the provisions imposed by the US government against Chinese companies. The decision, which is causing much debate, could have major consequences for the entire telephony sector and affects millions of owners of Huawei smartphones, not only in the United States.
United States vs Huawei
To understand how we got this far, it is necessary to take a few steps back to last week, when US President Donald Trump has signed an executive order to give the government the power to prevent companies in the United States from purchasing telecommunications equipment manufactured by those who pose a threat to national security. The measure was in fact addressed to Chinese companies, and in particular to Huawei, which has already been under the attention of Trump for some time.
We know Huawei above all for its smartphones, of good quality and which have invaded the market in a few years, making the company the second largest producer of mobile phones in the world after Samsung (Apple with its iPhones is third). But the Chinese company is active in numerous other sectors related to the production of repeaters, submarine cables and other telecommunications equipment. Customers are hundreds of fixed and mobile operators around the world, who use its products to expand their networks and build new and more powerful ones, such as 5G under development.
Huawei has existed since 1987, was born to bridge the technological gap between China and the West in the telecommunications sector and, like many Chinese companies, has a controversial past, with an opaque management of employees and some history of infringed patents. It is also one of the few large Chinese companies to be completely privately owned and generated over $ 108 billion in revenues in 2018.
The United States believes that Huawei is spying on behalf of the Chinese government, and that its products therefore pose a threat to national security, as they could be used to build networks over which sensitive data passes. The allegations have never been proven with concrete evidence and Huawei has always claimed to respect safety standards and to work transparently, as confirmed by its customers mobile operators and its presence in many markets, starting with the European one. .
Huawei and Android
Huawei has built its fortune in the smartphone industry not only thanks to the quality of its products, but also thanks to the growing success of Android, the the world's most popular mobile operating system developed by Google. The two companies have been collaborating for years to make sure that Android works best on Huawei's smartphones and tablets, with obvious benefits for both: Huawei is able to sell more devices, Google is able to further spread its services such as Gmail, Maps and YouTube. , from which he derives thanks to advertising. A similar logic is applied by Google with other large smartphone manufacturers, starting with Samsung, the largest of all.
The source code of Android is open (open source): it is developed privately by Google, which then makes it available to everyone to modify and adapt it to their needs. It is a basic version of the operating system, but without all the proprietary software made by Google, and which the company offers with paid licenses agreed with individual manufacturers. It is with these agreements that Gmail, Maps and the numerous other Google applications can be found on smartphones. The company also provides security updates of the operating system, its new developments and a system to more easily manage updates from smartphone manufacturers. This version of Android is what we are used to seeing on our phones and has unsurpassed features compared to the basic version.
Why Google has suspended the Android license
Huawei has been dealing with the hostility of the United States government for months, so much so that it has already stopped the sale in 2018 of their smartphones in the country. Things plummeted further with last week's executive order, which empowered the Commerce Department to impose a substantial ban: No US company can do business with Huawei unless there is explicit government permission.
Google had no alternative and had to terminate relations with Huawei, thus suspending the Android license that allowed the Chinese company to sell smartphones with Google's services above. The loss of the license does not imply that Huawei can no longer use Android, but binds its use to the basic version only, therefore without the pre-installed Google products and with complications to keep the operating system updated, both in terms of security and for future editions of Android.
Temporary license
Following the announcement of the suspension, the US Department of Commerce announced that it has issued a kind of temporary license, which will allow Huawei to continue to send updates and provide assistance to those who own their smartphones. This bridging solution, the department explained, should allow users and companies using Huawei smartphones to organize themselves, possibly to switch to other suppliers, before their devices stop offering current features.
The temporary license will expire on August 19, but it is not clear what will happen in the meantime. The initiative against Huawei is part of a broader series of measures by the United States on China, including tariffs and restrictions on the possibilities of doing business between the two countries. Trump believes this is the right way to push the Chinese government to give in on some points of trade relations between the two countries, but as many observers have pointed out, it is a dangerous tactic that could damage the US economy.
Trump has shown that he does not have very clear ideas about his own trade war, so within a few weeks the blockade against Huawei could be removed, or maintained as it is, damaging not only the Chinese company, but also all the owners of the its smartphones around the world.
Other companies
Google is not the only company to have been effectively forced to terminate relations with Huawei. Intel, Qualcomm and other component manufacturers are in a similar situation and will not be able to continue supplies of their microchips, which Huawei uses to build smartphones, tablets and computers. However, the Chinese company had been ready for this eventuality for some time: it uses fewer and fewer imported components and directly produces them, reducing its dependence on US companies. Huawei had also stocked up on components in recent months, securing material in stock for the production of new devices for at least three months.
What happens to my Huawei?
In the short term, for those who own a Huawei smartphone, or have just ordered one, nothing will change. On phones already sold, Android is present in its full version and with Google's services, which will continue to function normally, as well as the system to receive security updates. This applies both to devices already sold and to those already manufactured and available in stores and warehouses. However, updates to the next versions of Android will hardly be installed, which in the future could cause some compatibility problems with the most recent editions of some applications.
Huawei is currently evaluating the consequences of the suspension of the license, but yesterday issued a statement trying to reassure its customers about the assistance and functionality of its smartphones. It should be noted that the word Android is never mentioned in the release, and that the information is rather vague.
Plan B?
The problems for Huawei are not so much related to smartphones already sold, but to those that the company will sell in the future. The suspension of the license implies that on new products, not yet in stock, the version of Android with Google services cannot be installed. This is no small problem, considering that Huawei presented the P30 and P30 Pro smartphones at the end of March, its most valuable smartphones, which had received excellent reviews and intended to compete with the Samsung Galaxy S10.
Huawei still has the ability to use the basic open source version of Android, from which Google services are lacking, however, as users are used to having them on their smartphones. In China, where Google is substantially absent, Huawei is already doing something similar by selling mobile phones without the Play Store, from which to download applications. For the Chinese market this is not a particular problem, considering that almost all the user experience is concentrated on a single application, WeChat, which in fact behaves as if it were an operating system above Android. Huawei would instead have huge problems in the rest of the world, where it could not compete on an equal footing with other manufacturers.
Huawei could have a completely alternative operating system, but the history of those who tried it is full of failures: Windows Phone, Tizen, BlackBerry OS and Palm OS, just to name a few. All of these failed because they simply weren't widespread enough to convince developers to invest in them, creating versions of their applications that also worked on their operating systems, in addition to Android and iOS. And things have not gone better with those who have tried to work on the basic open source version of Android, like Amazon: their tablets are cheap, but they are not very successful and it is difficult to find quality applications.
What happens now
No option outside of Android with Google services is a good option for Huawei, which could therefore suffer severe economic damage and a unprecedented downsizing of its entire smartphone division. The company is preparing for the worst, but several analysts are confident that the situation can be unlocked in the event of a new agreement between the United States and China, which brings things back to the way they were before: Huawei unable to sell in the United States, but however, it is free to work with US companies for its supplies, starting with Google's Android license. The problem is that Trump has shown that he is making impulsive choices and today there is no coherent strategy in his trade war against China.
Moreover, the ban on Huawei does not only harm the Chinese company, but also numerous US companies that are no longer able to do business and sell their products in China. Google itself has certainly benefited in recent years from the collaboration with Huawei, for the development and expansion of the compatibility of its Android. It is therefore likely that the US government is receiving heavy pressure from these companies to bring the situation back to normal.
For now, the Chinese government does not appear to be interested in responding with countermeasures, which could further complicate negotiations on trade relations with the United States. China could go the extreme route of preventing Apple, one of the richest companies in the world, from continuing the production of its smartphones in Chinese factories, with serious consequences for its finances. It is a possibility that seems rather remote, however, considering that the millions of iPhones produced every week in China bring hundreds of millions of dollars to Chinese companies.
I wanted to buy a Huawei, now what?
The Huawei smartphones that are now in stores or that are available online, because they are already manufactured and shipped by the company, contain Android in its full version with Google services and will receive updates. If however the block were to continue for a long time, Huawei smartphones could be excluded from the transition to future editions of Android. If you do not have an urgent need to replace your smartphone, and you had found a Huawei one that you liked a lot, the advice is to wait a few days and see how the situation evolves. It may not leave you very quiet, but in a sense the future of your smartphone depends on what Trump decides.
The “technological cold war” does not start now
