Chinese tech giant, Huawei, becomes first major affectee of the US-China trade war as a number of American firms including Google announced that they would no longer be selling hardware, software and other technical expertise to Huawei until further notice. The move comes right after Washington announced its ambition to create an ‘Entity List’ which means American firms must get a license in order to sell products or services to Chinese companies.
As much as 49% of Huawei’s smartphones are shipped into international markets while remaining sold in mainland China. The latest development means that half of Huawei’s smartphones will no longer be able to have Google’s Android Operating System.
Huawei may still use open source Android software, which is the public version of the same operating system, but it offers lesser services and inferior user experience. This may not be a viable option for the tech giant who is aiming towards becoming the biggest manufacturer of smartphones by 2020.
A Google spokesperson mentioned that the company was merely complying with government orders and reviewing its likely implications. Further, it was clarified that existing users will continue to experience the same Google services on their smartphone devices.
While inside China Huawei uses a modified version of Android for its smartphones, it relies heavily on Google’s operating system for all its internationally shipped devices. In addition, as much as 30 American firms are included in the core supplier list of Huawei and all of them cutting business ties is seen as a massive blow for the Chinese tech company. In fact, some experts have gone so far to term it as an ‘instant kill switch’ for Huawei.
Huawei Has Been Preparing For This Emergency
As per Huawei, it has been preparing for this sort of scenario for some time now. In March, it was announced that Huawei has developed its own operating system for its smartphone devices. However, analysts are divided on the viability of the newly developed operating system. Huawei is also reportedly working on its in-house chip technology but it may not be enough to offset the impact.
Moreover, Huawei has been building up its stock for the last six months in anticipation of any such move. Hence, these restrictions may not completely halt Huawei’s operations and provide it with some breathing space. But it is only a matter of time before the company runs out of its stock unless it is successful in securing alternate supplies for all of its core parts.