The tech trade war is heating up.
The tech trade war is heating up.

Huawei’s bold plan to win back dominance

Chinese tech giant Huawei, and the millions who use their popular smartphones, could soon be relying on a second rate "plan B".

Huawei has found itself at the centre of an escalating trade war that has extended to smartphone users around the world after Google announced it would comply with a new order issued by the White House that effectively bans US firms from selling Huawei technology without government approval.

If Trump doesn't budge, this could force the Asian tech giant - which was founded by former People's Liberation Army engineer Ren Zhengfei - into a desperate position.

Google said it would continue to support existing Huawei smartphones but future devices will not have its flagship apps and software services, including Google Maps, Gmail and Google Search.

When Google launches the next version of Android later this year, it may not be available on Huawei devices. Only basic services would be available, making Huawei phones much less desirable, and forcing Huawei to compete with its own software, which would be a very tall task.

RELATED: Espionage fears dog China's biggest smartphone makers

A Chinese couple browse their smartphones as they walk by the new Huawei P30 smartphone advertisement. Picture: Andy Wong
A Chinese couple browse their smartphones as they walk by the new Huawei P30 smartphone advertisement. Picture: Andy Wong

WHAT IT MEANS FOR SMARTPHONE USERS

Google's Android and Apple's proprietary iOS have a stranglehold on smartphone operating systems, accounting for about 99 per cent of the global market.

On the hardware side, Huawei's smartphone technology has come along in leaps and bounds in recent years, rocketing the company into the second largest smartphone maker in the world in terms of global shipments.

The company's latest flagship phone - the Huawei P30 Pro - received widespread positive reviews for its standout hardware features, including from news.com.au. But analysts predict consumers will abandon Huawei for other smartphone makers if the company can only use a stripped-down version of the Android software that powers the user experience.

Some Huawei smartphone owners have reportedly been panic selling their devices with an influx turning up on Gumtree in the past 24 hours.

Huawei Australia's director of corporate affairs, Jeremy Mitchell, has told Australians their devices will not be affected.

"We want to assure Huawei customers in Australia that the US actions involving Google will not impact consumers with a Huawei smartphone or tablet or those that are planning to buy a Huawei device in the near future from an Australian retail outlet," he said.

"Consumers with Huawei devices will still receive security updates and be able to use Google apps. Huawei will continue to provide after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally."

 

HUAWEI'S PLAN B

Huawei has publicly acknowledged several times since 2012 that it has been developing its own mobile operating system as an alternative to Google's Android OS should it be forced to need it.

"We have prepared our own operating system, if it turns out we can no longer use these systems, we will be ready and have our plan B," Huawei's mobile chief Richard Yu Chengdong said in an interview with German publication Die Welt in March.

That operating system is reportedly called HongMeng OS but it remains to be seen if Huawei will be forced to deploy it on the future devices it ships outside China.

 

 

Huawei phones sold in China already lack the Google Play Store, Google services and many popular third party apps, but expanding its Chinese app store alternative outside the country would come with huge challenges.

Even if Huawei is able to strike out on its own with a great operating system, it would still need to convince app developers to bring popular apps to Huawei's own app store.

Samsung has previously tried to do this with its self-developed operating system dubbed Tizen but it completely failed to catch on, largely because it lacked the apps people wanted.

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.

In the near term, it's very possible Huawei can rely on the open-source and bare-bones version of Android coupled with its own interface software that runs on top of Android called EMUI, formerly known as Emotion UI.

For now, "Australian consumers will be able to continue using Google services like Google Play and Gmail on their Huawei phones as they normally would," Mr Mitchell said.

"Google Android updates will continue to be provided for Huawei EMUI and Google apps will not be affected."

A FIGHT FOR TECH DOMINANCE

The Trump administration's move ups the ante in a trade war between Washington and Beijing that partly reflects a struggle for global economic and technological dominance.

Huawei's telecom infrastructure division which develops equipment to build out cable broadband and wireless mobile networks has been plagued by espionage fears held by the West.

It's one of the world's leading vendors for telecom equipment but relies on US components including computer chips meaning the business will need to look elsewhere.

The Australian government took the step of banning Huawei's equipment from 5G networks being rolled out in the country but if the US ban stays in place, the pace of 5G mobile technology will likely be slow in countries relying on Chinese equipment.

Huawei's smartphone arm has also laboured under a similar suspicion, albeit to a much lesser degree, but hadn't really suffered until now.

Google (which has been ramping up its own smartphone efforts in recent years) could seek exemptions from the White House mandate but has not commented on whether it planned to do so.

Google may lose some licensing fees and opportunities to show ads on Huawei phones but it wouldn't be a major financial concern for the company.

Meanwhile, other US tech companies including chipmakers such as Intel and Qualcomm have reportedly told workers they will stop supplying Huawei.