Google is complying with Trump’s administration banning of Huawei, the world’s second biggest smartphone manufacturer. If this isn’t remedied in the short term, it may open a divide that may prove fatal to the platform and also have a lasting effect on other companies, like Apple.
The effect on Huawei users
Google — as Qualcomm, Intel, Microsoft, Corning, even companies like Dolby and many others — are US-based companies bound to US law. That means that this company has to stop any business with the Huawei: from selling them the glass for their screen to the OS for their computers and phones, to processors and modems, to apps and services like YouTube and Gmail.
According to Avi Greengart — founder of consumer electronics market analysis firm Techsponential — this effectively puts Huawei out of business outside of China. In an email interview, Greengart told Tom’s Guide that “Huawei cannot sell smartphones outside China without Google’s Android operating system, Google’s PLAY store, and regular software and security updates. Inside China, Huawei can use the portions of Android that are open source and its own app store.”
The impact on Huawei: 'Crippling' but good for Samsung
According to Greengart, Xiaomi and OPPO, two other Chinese companies expanding around the world, should immediately pick up sales. “Samsung could see a small uptick in flagship sales as well, particularly if Huawei is not able to resume sales and support when the Galaxy Fold and the next Note start shipping later this summer,” Greengart says.
But that is “short term”. Perhaps Huawei will get out of its blacklist status as soon as China and the US reach a trade agreement. Or perhaps the blacklist will continue and Xiaomi and Oppo will be added.
Impact on U.S. companies
Many US companies will feel the impact, not big — like Intel, Microsoft, Qualcomm — and small firms — like Corning glass and Dolby. “Technology companies that count Huawei as a large customer will lose out on revenue and growth,” says Greengart, “Huawei’s device sales have been rising rapidly, which ripples throughout its supply chain.”
Android: Google’s worst case scenario
One of the possible outcomes of this is that Huawei may decide to release their own operating system. This will count with the potential involvement of the Chinese government — and its economic resources —and the rest of the Chinese Android manufacturers. After the ZTE debacle and this, it’s clear that the Chinese can’t afford to depend on the US for a crucial part of its infrastructure and business development.
Companies like Xiaomi and Oppo can see the writing on the wall and decide to switch away from Android before they are too shunned by Trump or whoever in the next US government decides to ban as a political and economic bargaining chip.
It’s not crazy to think that other companies through the world may join that effort, too. Remember that Europeans do not agree with US arguments and will not not follow any Huawei ban based on what they believe is questionable US intelligence. Their authorities and companies will not want to depend on the whims of the American government.
Apple: Potential collateral damage
But the cluster-you-know-what doesn’t stop there. Like Greengart says, the indirect damage may be even worse. “Huawei is not just a large company, it one of the few Chinese companies with an international brand, and it is a source of national pride for the Chinese,” he says, “if the Chinese government wants to retaliate for trade restrictions crippling Huawei, it could target Apple.”
Add to that the fact that 17% of its revenues come from sales inside greater China. Greengart says that, while Apple can afford a temporary drop in sales, “any damage to its brand appeal in China could have a terrible long-lasting impact for the company.”
Reference: Tom's Guide
Read more: https://www.tomsguide.com/us/huawei-ban-impact-android-apple-google,news-30116.html
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