Sunday, 16 June 2019

Huawei: US blacklisting will have limited impact, despite Google and Qualcomm bans

By Chris Kelly, Total Telecom
Monday 20 May 19

Huawei's founder told members of the press that his company would not be prepared to submit to US monitoring to circumvent the ban

Huawei’s founder, Ren Zhengfei, has said that the US government’s decision to blacklist his company will have only a minimal impact on its projected growth in 2019. Huawei has managed unparalleled, double digit growth for many years, however, the company’s founder conceded that the US blacklisting could see his company’s projected growth rate dip below 20 per cent in 2019. “It is expected that Huawei’s growth may slow, but only slightly,” Reuters news agency quoted Zhengfei as saying…

Huawei’s founder, Ren Zhengfei, has said that the US government’s decision to blacklist his company will have only a minimal impact on its projected growth in 2019. Huawei has managed unparalleled, double digit growth for many years, however, the company’s founder conceded that the US blacklisting could see his company’s projected growth rate dip below 20 per cent in 2019.

“It is expected that Huawei’s growth may slow, but only slightly,” Reuters news agency quoted Zhengfei as saying.

Huawei recently overtook Apple to become the world’s second largest producer of smartphone handsets and has seen its market share increase steadily over the past two years, particularly with the launch of its flagship Mate 20, P20 Pro and P30 Pro handsets. Many analysts had subsequently predicted that Huawei would overhaul Samsung to become the world’s biggest handset supplier by the end of 2020.

President Trump’s decision to place Huawei on a trade blacklist could delay that aspiration, as China’s biggest technology producer would be banned from doing business with US firms such as Qualcomm and Intel. Huawei sources a number of components used in the manufacturing of its handsets from these companies.

The US government used similar tactics against Huawei’s compatriots ZTE last year, when a similar ban brought the company to the brink of bankruptcy, before an eleventh-hour deal was struck.

This time around, however, the US will hold considerably less leverage over Huawei than it did over ZTE, as Huawei’s supply chain is considerably more self-sufficient than that of its neighbour. Crucially, Huawei produces its own Kirin series chipset to power its handsets, rather than using those developed by Qualcomm.

Huawei will be more concerned about the possibility of being banned from doing business with Google – a move which could see future generations of its smartphone handsets lose access to the hugely popular Google Play Store. Huawei could also lose access to updates from the Android operating system.   

"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," Huawei said in a statement early on Monday. 

Later in the day, Android tweeted that Huawei smartphone users would continue to enjoy access to key services.

 

 

Zhengfei remained defiant, saying that his company would not be held to ransom by President Trump and would continue to look after its own affairs.

“We will not change our management at the request of the US or accept monitoring,” he said.

A recent report from Reuters suggested that Google’s parent company Alphabet Inc was still in the process of reviewing exactly which of the services it provides to Huawei would be affected.

 

Also in the news:

Huawei doubles down on security in France 

Trump ups the ante in his 5G trade war with China

Huawei in the UK - It's a £1.7bn per year deal

 

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