Will the Huawei ban create a third way for smartphones?

“Hypocritical” actions could spawn Android rivals and lead to international retaliation, reports Stewart Mitchell

“Hypocritical” actions could spawn Android rivals and lead to retaliation, Stewart Mitchell reports.

the us’s move to ban companies from dealing with Huawei could have serious repercussions for the mobile market – and the wider tech industry.

Concern has grown after President Trump signed an order targeting Chinese companies that allegedly pose security threats, with Huawei added to an “Entity List” that prohibits US firms from working with it.

Google responded quickly, saying that it would withhold Google Play Services from Huawei, along with any non-open source Android updates. Intel followed suit with a similar declaration, while Microsoft removed Huawei laptops from its website.

All of this will cause short-term pain for Huawei – but many believe the move could backfire, by fostering the growth of competition outside of the US, as well as provoking statelevel retaliatory action from China.

“Huawei has been anticipating this scenario,” said Ben Wood, chief of research at CCS Insight. “It’s previously stated that it’s working on its own OS as an alternative to Android, although it’s highly unlikely that Huawei has anything that could immediately replace Google’s OS.”

Wood noted that Huawei was also working its own HiSilicon range of chipsets to reduce its dependence on suppliers such as Qualcomm. “These endeavours are part of a desire to control its own destiny,” he said. “The emergence of a new OS would bring some variety to the smartphone duopoly of Android and iOS.”

Apple and Google could thus find themselves competing with an

The emergence of a new OS would bring some variety to the smartphone duopoly of Android and iOS

emergent third mobile platform forked from Android – a scenario that would “introduce fragmentation to the market on a scale that developers and content owners could not ignore, given the size of the market in China alone,” Wood predicted.

Double standards

The crisis comes as the White House applies trade pressure on China in a number of areas, leading critics to suggest that the Huawei ban is chiefly an exercise in geopolitical rivalry. And while the US warns of potential Chinese government interference in the tech industry, some see a double standard.

“Part of the justification for the alert is that the Chinese government can

force a company based in the country to do its bidding,” said Fennel Aurora, a security advisor for F-Secure.

“What we actually saw was that an announcement went out from the US government, and a few hours later Google, Intel and Broadcom all said they would stop working with Huawei. It comes across as more than a little hypocritical.”

Nor are the security experts convinced that snooping concerns justify the severity of the response.

“You would have to make a really compelling case to be cutting Huawei off from service and security updates that are so important,” said Aurora. “As far as I am concerned, they have clearly not made that case.”

He concluded with a warning that China could well hit back – even though doing so might be harmful to its own interests. “People from the outside assume people aren’t that irrational, that governments can’t really be that irrational,” he explained. “But sometimes they are. And then the world has problems.”

Short supplies

Given the massive proportion of manufacturing undertaken in China by US companies, any retaliatory measures could wreak havoc with global supply chains.

“You can imagine the Chinese government saying ‘right, no iPhones can be made here’ – or what if the Chinese government said that nothing that’s manufactured in China can be exported to the US or its allies?” asked Alan Woodward, a cybersecurity expert at the University of Surrey’s Department of Computer Science. “90% of the world’s PCs are manufactured there and 75% of the handsets,” he continued. “Donald Trump seems to have a benign vision that somehow America can supply it all, but most countries do not have the capability to manufacture certain things, and you don’t set up fabrication plants overnight.

“Not only would there be huge delays and shortages, there would be an impact on the economy. Everybody loses in this kind of trade war.”

The situation was fluid as we went to press, with Arm the latest company to tell employees to stop working with Huawei – leaving the company without chipset partners.

Huawei might, however, cling to the hope that the US will perform a U-turn, as it has done before. “The US previously reversed a decision to block ZTE,” observed Woodward. “The dispute was supposed to be about security, but what it was actually about was ZTE not paying some fine. Once it paid up, it was allowed to do business again.”