Google announced that it is beginning to cut ties with China's Huawei, as per the US Government's instructions, according to Bloomberg. Google will stop selling Huawei parts it needs to manufacture smartphones and other electronics.
Washington considers Huawei Technologies Co., a Chinese state-run telecommunications equipment and consumer electronics manufacturer, as a threat to national security. As such, the Trump Administration moved on Wednesday to bar Chinese tech companies from selling their products in the US and blacklisting Huawei, especially, from buying US components.
Whether this burgeoning trade war is needed or even if it will work, time will tell -- but in the meantime, Google announced that it is complying with the Government's decision and beginning to cut ties with the Chinese company. Although Huawei is believed to have some stockpiles of parts and components, this development could severely hamstring it in the long run. Moreover, it could have meaningful effects for users themselves, as Huawei will no longer have access to Google's proprietary services -- such as Gmail and Google Maps apps -- reports AFP citing a 'source close to the matter'. Other companies are also moving to comply with the ban.
Smartfights
This all stems from growing rivalries between the US and China over the past few years. Given the company's CEO Ren Zhengfei's army background and Huawei's opaque culture, suspicions are mounting that the firm has links with the Chinese military and intelligence services. On Friday, this culminated in the Trump Administration blacklisting Huawei under suspicions of engaging in espionage for Beijing.
The trade ban imposed by the administration extends to U.S. software and semiconductor materials that are essential to Huawei. Although not unexpected, the ban inflicted a terrible blow to the company, which is the world’s largest provider of networking gear and second largest smartphone vendor. Huawei has been listed by the US Commerce Department among firms that American companies can only trade with if authorities grant permission.
Google, who owns the Android mobile operating system (OS), the most widely-used mobile OS out there, is already taking steps to comply with the ban. Like all tech companies, Google collaborates directly with smartphone manufacturers to ensure its systems are compatible with their devices -- and amid concerns of espionage, that has to stop.
While this will definitely be felt by Huawei, other companies in the US -- such as Intel, Qualcomm, Xilinx, and Broadcom -- might follow. All of them cutting trade with Huawei is undoubtedly a scary prospect of the Chinese company, as it directly relies on these other suppliers to function. "Intel is the main supplier of server chips to Huawei, Qualcomm provides it with processors and modems for many of its smartphones, Xilinx sells programmable chips used in networking, and Broadcom is a supplier of switching chips, another key component in some types of networking machinery", according to Bloomberg.
"We are complying with the order and reviewing the implications," a Google spokesperson told AFP.
On their official @Android Twitter, the comany further stated that "while we are complying with all US gov't requirements, services like Google Play & security from Google Play Protect will keep functioning on your existing Huawei device."
So, what does this mean for consumers? In the long run, probably nothing good, but we'll see how the situation develops. In the short term, it does mean that Google software and technical services that are not publicly available might stop working on Huawei devices. The Chinese company will only have access to the open source version of Android. Furthermore, it will need to manually access any updates or software patches from the Android Open Source Project, and also distribute the updates to users themselves. A company statement held that Huawei will "continue to provide security updates and after-sales services" to all existing smartphones and tablets globally, including those not yet sold.
"At the same time, the Chinese side supports Chinese enterprises in taking up legal weapons and defending their legitimate rights," said Lu Kang, a spokesman for the Chinese foreign ministry, adding that the organization is actively following developments on the ban.
This isn't a one-sided battle, however. Huawei does have some influence in the device market that it can throw around. The company is working on establishing itself as a leader in 5G technology, currently offering the most advanced and cheapest 5G capability in the world. It also outsold Apple in smartphones in the first quarter of this year, seizing its second place globally (after Samsung).
The ban could stop Huawei's ascent, with Ryan Koontz, a Rosenblatt Securities analyst, saying that it could "cause China to delay its 5G network build until the ban is lifted, having an impact on many global component suppliers," as the company is "is heavily dependent on US semiconductor products and would be seriously crippled without supply of key US components." The US has also "pressured both allies and foes to avoid using Huawei for 5G networks that will form the backbone of the modern economy," Bloomberg adds.
So on a macro, geopolitical level, things are definitely heating up. On the micro, consumer level, however, things aren't that bad right now. Some of you may have to re-think your device purchases, and those who do own Huawei devices right now might find it impossible to use certain apps. The development and implementation of 5G technology as a whole, however, will undoubtedly come bruised and battered out of the trenches of this trade war.
