U.S. ban could strip Huawei of Google technology services
Huawei could lose its grip on the No. 2 ranking in worldwide cellphone sales after Google announced it would comply with U.S. government restrictions meant to punish the Chinese tech powerhouse.
The Trump administration move, which effectively bars U.S. firms from selling components and software to Huawei, ups the ante in a trade war between Washington and Beijing that partly reflects a struggle for global economic and technological dominance.
Google said basic services would still function on the Android operating system used in Huawei’s smartphones and existing smartphone owners would not lose access to its Google Play app store or security features.
But unless the U.S. Commerce Department grants exceptions, the ban announced last week on all purchases of U.S. technology would badly hurt Huawei, analysts say.
Washington claims Huawei poses a national security threat, and its placement on the socalled Entity List by the Trump administration last week is widely seen as intended to persuade resistant U.S. allies in Europe to exclude Huawei equipment from their next-generation wireless networks, known as 5G.
“This is a major crisis for Huawei. Instead of being the world’s largest handset manufacturer this year, it will struggle to stay (at) two, but probably fall behind,” analyst Roger Entner said. “How competitive is a smartphone without the most wellknown and popular apps?”
Huawei will likely use its own, stripped-down version of Android, whose basic code is provided free of charge by Google. But it’s not yet clear what other Google software and services — such as maps, Gmail or search — it will be able to use.
Entner, founder of Recon Analytics, said Google itself won’t have a large direct impact, “as consumers will shift to other Android devices. The biggest concern is not to be caught in the crossfire of two governments.”
Gartner analyst Tuong Nguyen said 48 per cent of Huawei’s phone shipments last year were outside of China and the company will need to scramble not to lose market share.
Samsung led global smartphone sales in the first quarter of this year with a 23.1 per cent share. Huawei was second with 19 per cent, followed by Apple at 11.7 per cent, according to IDC.
Huawei’s smartphone sales in the U.S. are tiny — and the company’s footprint in telecommunications networks is limited to smaller wireless and internet providers — so any impact on U.S. consumers of a Google services cut-off would be minor.
Hardware suppliers led by Qualcomm, Broadcom and Intel would also be forced to halt shipments to Huawei under the Commerce Department rule, which requires all U.S. technology sales to the company to obtain U.S. government approval unless exceptions are made.
The global risk assessment outfit Eurasia Group said the Commerce Department was expected to set a 90-day grace period this week.
Google, a unit of Alphabet Inc., said in a statement Sunday that it was complying with and “reviewing the implications” of the requirement for export licences for technology sales to Huawei, which took effect Thursday.