President Trump sent shockwaves throughout the tech industry last week with an executive order that declared a national emergency and barred American companies from doing business with companies deemed a national security risk. Days later, the effects have started to become apparent as companies from Google to Intel have taken action to comply, shutting Huawei out of supply chains and stopping it from using US software.
This development could have major, long-lasting repercussions for the entire tech industry, but there are still several questions without definite answers. Here are some of our most immediate:
1) What if you own a Huawei device right now?
Google has said that Google Play Services and the app store itself will continue to work on Huawei devices, so your phone should continue to operate as normal. You almost certainly shouldn’t expect an update to Android Q or other platform-level upgrades, however, as that would require Google’s sign-off.
If you were thinking of buying a new Huawei phone, meanwhile, we wouldn’t advise it until we have more information. But if you’re sure you want that P30 Pro camera, for example, you can at least rest assured that it shouldn’t lose any out-of-the-box functionality.
2) Is this situation likely to be resolved?
The action taken by Google and others is the direct result of an executive order from one of the least predictable US presidents of all time, so it’s anyone’s guess as to what might happen next. Much will hinge on China’s reaction. Huawei is the biggest smartphone vendor in China, and even though Google’s ban itself won’t affect that market, the company still relies on components from other US suppliers that are now refusing to do business.
Outside its home market, Huawei is arguably the most successful Chinese consumer brand so far. It’s usually the second largest phone vendor in the world, depending on how it competes with Apple in a given quarter. China has the nuclear option of reciprocating with action against Apple, which sounds outlandish but could prove to be a useful bargaining chip if normality is to be restored.
3) What is Huawei’s plan B?
It’s long been known that Huawei has been working on a backup OS that it would switch to in precisely this eventuality. How that OS would look like in practice, however, is less clear. Huawei already ships a Google-less version of Android in China, where Google services are banned, and the obvious move would be to ship that elsewhere too. But some reports, as well as Huawei itself, have implied that the plan-B OS could be a more radical break from the open-source Android code base.
Since Huawei makes its own smartphone CPUs through its HiSilicon subsidiary, it’s possible that the company could seek to gain a technical edge through vertically integrated development that leverages a tight marriage between hardware and software. It’s unlikely, however, that the company’s sway outside of China would be enough to gain support for a new OS outside of the Android ecosystem. It’s hard enough getting developers to put their apps on Amazon’s Fire devices. Huawei would also, of course, have to find non-American replacements for the various other components it relies on in its phones.
4) What about Honor?
Honor is a smartphone brand operated independently from Huawei’s own smartphone division, but it’s still wholly owned by Huawei and makes heavy use of the parent company’s technology and supply chain. There’s no real reason to think that it wouldn’t fall under the same scrutiny as Huawei, but it’s possible that Google might treat it as a separate OEM for licensing purposes. We’ve reached out for comment.
5) What about Microsoft?
If Google considers itself legally unable to do business with Huawei, it’s hard to see how Microsoft wouldn’t reach the same conclusion. Huawei’s Windows laptops are very well-regarded, and unlike its phones, they’re actually sold in the US. We’ve reached out to Microsoft for comment, but if there’s a loophole that will allow the company to continue to sell Windows 10 licenses to Huawei, we’re unaware of it.
6) Are other Chinese companies next?
The executive order didn’t target Huawei specifically, and since some of the concern around the company relates to Chinese law that demands local firms cooperate with the government, other Chinese companies could theoretically be affected. But the US Department of Commerce did single out Huawei last week for inclusion on the Bureau of Industry and Security’s Entity List, which details companies considered to be a potential national security threat.
ZTE, a telecoms equipment and smartphone maker that competes directly with Huawei, has run into its own trouble with the US government already. But the company was caught clean violating trade sanctions and then failed to comply with the terms of its own punishment, leading to a severe but somewhat less controversial response from the US. The two parties ultimately struck a deal to let ZTE get back on its feet. The two situations aren’t directly comparable, but Chinese companies like Oppo and Xiaomi will likely be on edge nonetheless.
7) What does this mean for the rollout of 5G globally?
Huawei is a leading provider of 5G networking equipment, at least in countries that the US hasn’t persuaded not to use it, and much of it relies on American suppliers like Intel, Broadcom, and Xilinx. The ban on trade could certainly delay Huawei’s moves to supply 5G equipment to countries around the world, and the American companies’ business, in turn, could be adversely affected.
Bloomberg reports that Huawei has stockpiled at least three month’s worth of components in anticipation of this situation, but beyond that the company may need to seek alternatives.