Last week, President Donald Trump issued an executive order banning U.S. companies from doing business with “firms posing a national security risk.” As the government has repeatedly made clear, it considers Chinese-based telecom Huawei to be a threat to America. On May 19, Google and Intel announced they would comply with the edict by cutting ties with the smartphone maker.
The Implications of Google’s Decision
The Trump Administrations’ ban does not apply to existing Huawei devices, only models it releases in the future. As such, owners of the Chinese firm’s smartphones will still have access to Google’s applications and services. However, the government has disallowed the Asian conglomerate from using the official version of Android on its forthcoming handsets. Consequently, if the company begins utilizing an open-source version of the operating system (OS), it won’t have access to Google’s app store or services.
If Washington banned Huawei devices from being used in the United States, it wouldn’t be a significant loss. Because the U.S. government has had issues with Huawei for years now, the company has taken steps to prepare for its exit from the American marketplace. For one thing, the corporation has been developing its own operating system (OS) since 2012.
Huawei has also being a major mobility player in China. The firm has produced a range of low-end hardware that’s allowed it to become the world’s second-biggest smartphone retailer. It has also inked contracts to provide various nations with 5G networking equipment.
The problem is that rAndroid is the mobile OS of choice in major markets like India and Europe. The company will now have to convince consumers and app developers to invest in its ecosystem-less products. In a press statement, Huawei noted it will continue providing after-sales support and is preparing new in-house holistic software.
Since the entire tech industry has used interoperability as a significant selling point for years now, Huawei doesn’t have an easy road ahead of it.
U.S. Chipmakers Abandon Huawei
The Trump Administration sanctions against the Chinese tech corporation have also had a significant impact on its supply chain. American-based semiconductor firms Intel, Qualcomm, Broadcom, and Xilinx have confirmed they’ve cut ties with Huawei. German manufacturer Infineon Technologies has also suspended deliveries of its U.S.-made components to the device manufacturer.
As with the Google ban, the organization wasn’t unprepared for a disruption to its components sourcing. Huawei has been producing its own smartphone modems and processors for some time. It’s also been stockpiling chips for the past three months. However, the company has depended on Intel to provide chipsets for its laptops.
Huawei founder Ren Zhengfei had a mixed response to the U.S. governments devastating blows to the firm international business. The executive said Washington’s sanctions won’t hurt his company’s core business and wouldn’t affect its 5G rollout. He also expressed gratitude to U.S. companies for developing products that have helped Huawei flourish.
President Trump escalated America’s trade war with China to get the Asian superpower to accede to his demands. However, the conflict between governments is increasingly harming the global tech sector. Washington’s latest sanctions have inflicted severe damage on Huawei, and its U.S. partners haven’t been left unscathed.
Following their Huawei announcements, Google, Intel, Broadcom, and Qualcomm experienced market share declines of 1 to 6 percent.