After a US government order that will limit or end trade with any foreign company that is regarded as a security risk Google (Alphabet) cut off Huawei's license to use Android proprietary apps and services on its Android phones.
The US government order
A recent Digital Journal article notes: "In the midst of a trade war with Beijing, President Donald Trump has barred US companies from engaging in telecommunications trade with foreign companies said to threaten American national security. The measure targets Huawei, a Chinese telecoms giant in Washington's sights that is listed by the Commerce Department among firms with which American companies can only engage in trade after obtaining the green light from the authorities. The ban includes technology sharing."
Google's response
Google said that it is complying with the order as well as reviewing its implications. Google will need to halt much of its business activity with Huawei. It will not be able to transfer hardware software and technical services that are not publicly available. It will only be able to use the open source publicly available version of Android but with none of the popular proprietary apps and services according to a source close to the matter.
Chinese consumers respond
The Google license cutoff is less of a problem in China as most of the services and apps do not function in China anyway. But social media posts on Weibo and Douyin exhibit strong support for Huawei according to the site What's On Weibo.
Chinese customers are posting on social media that they will continue to buy Huawei phones and other devices in the future. Hashtags such as "Huawei doesn't need to rely on America for its microchips" and "Huawei's Self-Developed Operating System Hong Meng" were trending on Chinese social media. The posts highlight that Huawei has already developed its own components for its phones and it has been developing its own operating system for just such a contingency as is happening now.
In a recent interview with the German magazine Die Welt Huawei executive Richard Yu said: “We have prepared our own operating system, if it turns out we can no longer use these systems, we will be ready and have our plan B.”
Huawei began working on its own operating system in 2012 when the US began an investigation into Huawei as well as ZTE. It was still developing the system in 2016. If Huawei is not able to get technology from the US that it licenses, it will no doubt quickly transfer to using its own technology.
US order will hurt US tech companies
Many US firms are part of China's supply chain. Last year US firms sold an estimated $11 billion worth of components to Huawei.
Trump's executive order could in effect ban makers of US hardware and software from selling to Huawei by requiring a special license to do. There are 90 days before the order goes into effect.
Bloomberg News reports that the US-based chipmakers, Intel, Qualcomm, Broadcom and Xilinx have all indicated that they would halt shipments to Huawei. This will help hasten Chinese development of its own chip technology as well as removing an important large and no doubt profitable markets from the US firms. Other companies selling in China such as Apple may also suffer as a result of more Chinese supporting their national products. This will be exacerbated by Chinese retaliatory tariffs that will make US products more expensive.
Previously published in the Digital Journal
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