Phone business

Huawei’s phone business would be decimated without Google’s Android

Sunday night’s news that Google would comply with a US government executive order and suspend business with Huawei is one of the most dramatic moments in Android history. Huawei, China’s most prolific smartphone vendor, had started 2019 with explosive double-digit growth and was on track to eclipse Samsung as the world’s top phone maker by the end of the year. Without Google’s Android support, however, that just won’t happen – not in 2019 or 2020 or any date in the future.

Whether this turns out to be the most important moment in Android history remains to be seen. This could all be just a short-lived scare tactic from a Trump administration trying to demonstrate to the Chinese government its willingness to take drastic action. Or Huawei could be left on the US blacklist indefinitely, spawning a wide variety of potential scenarios, none of which bode well for the company’s future as a smartphone vendor.

As it stands, Huawei is losing its license agreement with Google for the provision of Google Play Services and access to the Google Play Store on new Huawei Android devices. Existing customers won’t be affected, but without Google resuming business with Huawei, they won’t receive any further Android OS updates either. (Honor, the 100% subsidiary of Huawei, seems to suffer the same fate). This is devastating to Huawei’s hopes of selling smartphones outside of China.

Huawei still has the ability to use the open source variety of Android, but Google has been gradually cutting back all of the attractive components of the Android Open Source Project (AOSP). Today’s true full Android experience – with Google Maps, YouTube, and most importantly, the full ecosystem of third-party Android apps – depends on Google’s licensing agreement. Deprived of Google’s software, Huawei would sell chickens without feathers to smartphone buyers accustomed to having access to the Play Store. In Europe, even the best hardware wouldn’t convince consumers to buy a phone without an app ecosystem. Google wields enormous market power through its Play Store, big enough for the European Commission to conduct an antitrust investigation.

In its native China, Huawei already operates without the Play Store, due to Google’s absence from the market. But even there, Huawei would suffer from not having a close working relationship with Google. All of its Chinese rivals would get early access to the next version of Android while Huawei would have to wait until the AOSP code is made available to the public. The Chinese consumer is probably the least responsive to OS updates and upgrades, given that WeChat has evolved to be an OS and ecosystem above Android, but Huawei would still disadvantaged in one of the most competitive telephone markets in the world.

There is no positive twist to this situation for Huawei. Trying to sell smartphones without Google’s cooperation in the modern era is a spectrum that ranges from bad to disastrous. Windows Phone, Palm OS, MeeGo, Symbian, Bada (later Tizen), and BlackBerry OS are just a few of the mobile operating system corpses that the rise of Android has produced. Appless operating systems simply don’t stand a chance against today’s iOS-Android duopoly.

Putting a brave face on the situation, Huawei’s official response was to highlight its contributions to Android’s global popularity, reassure current owners of Huawei and Honor phones that they will continue to receive security updates and to promise to “continue to build a secure and sustainable software ecosystem. Notably, there is no mention of Android in Huawei’s closing remarks.

Huawei has been aware of the possibility of hostile action by the US government for years, and its consumer division boss Richard Yu recently revealed that it has been developing its own alternatives to Android and Windows. On the mobile front, it could be a fork of Android’s AOSP flavor or an entirely new operating system, built from the ground up. Either way, Huawei would struggle to convince app developers to build apps for its separate platform. If Amazon, with all its weight and influence, couldn’t do it for the Amazon Appstore on Android, Huawei is even less fortunate. Rational app developers are hardly going to flock to a new platform born out of adversity and engulfed in a whirlwind of political strife.

As for the Huawei Mate X foldable phone, the company would be well advised not to release it until it has all its Android privileges restored. If that is the case.

The best outcome of the current situation, which might be considered the most likely were it not for the volatility of the current US leadership, is for China and the US to reach a new trade deal that thaws relationships and give Huawei a break. punitive sanctions. To have a healthy smartphone business, Huawei Needs Android support by Google. Google also benefits greatly from Huawei’s breakneck pace of innovation, and let’s not forget that Apple’s iPhone business is literally built in China. Any reasonable incentive pushes the United States and China to collaborate. However, the US president seems determined to play the biggest fool.

So what if the trade hostilities between the United States and China don’t improve? Huawei’s internal OS efforts would redouble, and whether that OS is complete or not, we’ll likely see it distributed on the company’s next flagship. Selling old-school Android phones isn’t an option without Google as a collaborator. The undesirable externality would be that a large number of people across Europe and Asia, who might have rightly expected at least one more Android OS version update, would end up with fewer devices than they paid for. Samsung would be among the few beneficiaries of this confrontation, having lost market share to Huawei in global phone markets.

The world’s two major economies are clashing in an unprecedented way, and Huawei finds itself in the middle of this clash. The company’s global reputation will suffer from this incident, no matter how quickly it is resolved, as consumers and business customers will be wary of buying a company that could at any time find itself without a recovery plan. operating system upgrade. A resolution to the ongoing trade dispute between the United States and China is now more urgent than ever. However, China is unlikely to react positively to US bullying tactics. And that means Huawei’s phone business could be in limbo for some time to come.