Earlier this week, Reuters reported that Chinese technology company Huawei will issue $286 million in bonuses to its 190,000 employees. The firm made the disbursement to thank its loyal team members for their hard work throughout its blacklisting by the Trump Administration. Indeed, the conglomerate has brought in record profits despite being cut off from its American component and software suppliers.
However, a new article from The Information indicates that Huawei is not as stable as it appears. The telecommunications company is reportedly concerned about maintaining its foreign business after losing access to Google Mobile Services.
One Big Problem
Huawei has thrived since the U.S. Department of Commerce forbade American companies from trading with it in May for one reason; it has dramatically increased its domestic market share. In Q3 2018, the firm represented 25 percent of the Chinese smartphone industry. However, in the third quarter of this year, the corporation claimed 42 percent of the same sector.
The corporation expanded its domestic business because of its high-quality products and an ingenious marketing campaign. The firm teamed with local retailers to position itself as the brand of choice of loyal Chinese citizens.
Because Beijing tightly controls the flow of information in China, Huawei’s patriotic rebranding has been wildly successful. However, the conglomerate’s domestic market dominance has papered over the fact that its foreign business is in peril.
In China, the government has blocked access to essential Google Mobile Services like the Play Store and AdMob. As such, Huawei sells Android-powered phones that use its own store and backend support. Unfortunately, the rest of the world is accustomed to using the fully enabled, Google-enhanced version of the operating system.
With stiff competition from manufacturers not hampered by trade bans, Huawei is in danger of losing its position as the world’s second-largest smartphone manufacturer.
The Information reports that Huawei’s executives are aware of the precipice the company currently sits on and have taken steps to address the problem. In August, the Sino conglomerate held a developers conference wherein it tried to sell software makers on using its ecosystem. However, the company has had limited success thus far.
For one, developers are wary of the time and money necessary to make their products compatible with Huawei’s services infrastructure. One developer, Squeaky Dog, told The Information that the corporation offered significant tech support and promotions to win his business. Though the company appreciated the incentives, it simply couldn’t justify the app customization costs.
Another issue is that some of Huawei’s support tools haven’t been well received. In September, Abacus reported that the firm released a profoundly flawed framework for an Ark Compiler intended for its Harmony operating system. The telecom company promoted the program as having the ability to retrofit Google apps for use on Harmony. However, several engineers found that the compiler could not execute its function.
Huawei has announced that it will release a full version of its new developer toolkit in 2020. However, if consumers in essential markets like Europe and the Middle East abandon the company before it optimizes its mobile services, it probably won’t be issuing any more surprise bonuses.