Huawei in 2020: so many questions – Android Authority

What a decade last year was for Huawei.

In early 2019, Huawei seemed unstoppable, but the Chinese giant found its place in the government of the most powerful nation in the world.

The U.S. ban has put Huawei on the brink. For a while, it seemed like the Chinese giant couldn’t do it. With hindsight, it is obvious that an organization known for its “wolf culture” would do well. Huawei turned out to be too big to fail, or at least too big to fall without a bloody fight.

It was a crazy and complicated year for Huawei, but the company rose to the challenge. And after?

Peak huawei

If you were tracing Huawei’s trajectory on a timeline, April 2019 would probably be “Peak Huawei”. The company unveiled the P30 Pro on March 26 and the new flagship product made waves for all the right reasons. With its rugged camera, specs and battery, the Huawei P30 Pro was the culmination of Huawei’s long-term effort to become the world’s largest phone maker.

The Huawei P30 Pro has received good reviews, especially for its versatile and powerful camera. The phone topped direct comparisons with competitors from Samsung and Apple, and consumers have taken note. It didn’t hurt that Huawei spent hundreds of millions on marketing and used all the tricks in the book to make the P30 a bestseller. It worked. On June 27, Huawei sold 10 million P30 series phones, exceeding the P20 by more than two months.

Statista

Helped by strong sales of the P30 Pro, as well as the robust performance of previous hits like the Mate 20 Pro and its Honor phones, Huawei was on the way to selling more than Samsung. The only question was when exactly would this happen.

Huawei was on the right track to sell Samsung. The only question was when exactly would this happen.

It was not only the P30 Pro that consolidated Huawei’s position as the “new Samsung”. At MWC 2019, Huawei stole the thunder of Samsung with its foldable Mate X. While Samsung has long talked about foldables, Huawei kept its cards handy until the last minute. The Mate X came as a surprise to the industry and in some ways it looked like a better foldable than the bizarre Galaxy Fold.

At the end of April, Samsung carried out an embarrassing mini recall of the Galaxy Fold, after the critics literally pierced the device. Huawei executives were surely watching with schadenfreude, but their joy was short-lived. A few weeks later, Huawei would plunge into the crisis.

Government antipathy

The May 15 announcement of Huawei’s ban was shocking, but not entirely unexpected. Looking back, the signs that the U.S. government would use its nuclear option against Huawei were clear. The biggest: it happened before. In April 2018, the United States imposed a similar ban on ZTE, prohibiting the Chinese telecommunications company (and its rival Huawei) from obtaining products of American origin. The ZTE ban was short-lived, but in the few months that it was in effect, it almost closed the business. The ZTE test did not go unnoticed at Huawei headquarters. At the time of Huawei’s ban announcement, the company had put in place contingency plans.

Before imposing the total ban, the U.S. government had made it clear that it was unhappy with Huawei’s rise to the top of the tech industry. In January 2018, Huawei had to cancel its big entry into the American market. AT&T and Verizon both had to transport the Mate 10 Pro, which could potentially give Huawei a huge boost in the U.S. market. At the last minute, the two carriers left the agreement, at the request of the American authorities, citing threats to national security.

Keeping Huawei out was not enough, the United States wanted other countries to stop doing business with the company as well. He even threatened his allies to remove them from intelligence sharing agreements if they allowed Huawei to build their 5G networks. (The threat did not fully work – the UK, for example, just allowed Huawei to participate in its 5G deployment, albeit with “strict restrictions”.)

The campaign against Huawei intensified until May 15, 2019, when the U.S. Department of Commerce placed Huawei on a list of entities to which U.S. companies cannot sell.

Also read: The Huawei and US debacle: history so far

Life under the ban

What initially appeared to be bureaucratic harassment turned out to be a blow to Huawei. American giants like Google, Microsoft, Qualcomm and Intel quickly announced that they would stop selling components – hardware and software – to Huawei. In the confusion, it briefly seemed that Huawei would even lose access to basic technologies like Wi-Fi and SD memory, a death knell for any electronics company.

In the weeks and months that followed, Huawei was able to resume operations with some large companies who decided that they were not subject to U.S. restrictions. Crucially, these include Arm, which provides the architecture for the main SoCs for smartphones, including Huawei’s Kirin series.

The U.S. government granted Huawei a reprieve when it allowed U.S. companies to continue to provide maintenance and security updates to existing products. Among other things, this has allowed Huawei to continue pushing Android updates on its existing phones. The first 3-month stay was renewed in August, then again in November 2019.

Huawei’s ban came against the backdrop of a massive and growing trade war between the U.S. and China. To justify Huawei’s sanctions, the U.S. government has cited nebulous threats to national security, but many have seen the ban as leverage in the high-stakes negotiations between the world’s two superpowers.

Despite U.S. government best efforts, Huawei appears to have weaned itself from U.S. hardware

Stuck in limbo

While many expected the ban to be lifted as the U.S. and China move toward dispute resolution, little has changed in the ten months since the introduction of Huawei on the list of entities.

At the time of this writing, Huawei still could not buy from most U.S. tech companies, although some, including Microsoft, managed to obtain special export licenses in late 2019. This means that Huawei can again ship laptops with Windows, but it still can’t ship smartphones with Google apps, despite the obvious similarity between the products.

Despite the best efforts of the U.S. government, Huawei appears to have weaned itself from U.S. technology, at least when it comes to hardware. The Mate 30 Pro does not contain any components of American origin, an astonishing feat considering all the American technology in the mobile industry. And it’s not a limited product: Huawei has sold 12 million units of the Mate 30 series by the end of 2019.

Software is still the Gordian knot for Huawei. Android itself is open source, so Huawei could theoretically continue to use it indefinitely. What works on Android is the problem. Google apps are a must worldwide, and Huawei has no way of providing them to customers. The same goes for all Android apps that are only available, at least officially, on the Google Play Store.

Huawei has made noise on Harmony OS, its own operating system, considered as an alternative to Android. It is the company’s “Plan B” if all else fails. Right now, it is little more than a proof of concept, running on a few smart home devices, but one day it could give Huawei an indispensable proprietary platform for all of its products. The problem is that it will take years to develop, and even then there is no guarantee that the developers will support it.

Too big to fail

Huawei said it sold 230 million smartphones in 2019, 30 million more than in 2018. It also consolidated its lead against Apple, gaining three percentage points, according to Counterpoint Research. It’s amazing, given the circumstances. How was it possible?

Huawei’s smartphone business is split between global operations (where Google is essential) and Chinese operations (where Google is irrelevant). The latter saved Huawei in 2019. Thanks to strong sales in China, Huawei was able not only to stay afloat, but also to grow, despite the American ban.

In the third quarter of 2019, Huawei held more than 40% of the huge Chinese phone market, growing 66% year-on-year. Chinese consumers have gathered around Huawei, whom they saw as a national champion persecuted by a jealous foreign power.

Huawei’s sales in 2019 were incredible, given the circumstances.

But it was not just China. Huawei has taken advantage of the massive momentum it had accumulated in previous years to maintain the pace of sales in Europe and other markets. It was mainly on the back of previously released phones like the P30 Pro. Huawei has also modified and reissued older models, which allowed it to partially circumvent the ban on using Google apps.

The other big Huawei device of 2019 was the Mate 30 Pro. In our review, we noted its exquisite design and great camera, but the lack of Google apps overshadowed what would have been a brilliant version. Huawei showed a brave face and acted as if nothing had happened, but in the end, the Mate 30 Pro was effectively excluded from Europe and other markets outside of China. Huawei finally released the phone in parts of Europe, but in limited numbers and without serious marketing.

The big questions of 2020

Very big questions arise on Huawei in 2020. Will the American ban continue indefinitely? If not, will Huawei try to return to the status quo before the ban? And what will be the long-term consequences?

The answers to these questions could shape the fate of Huawei, the entire technology industry and, by extension, the globalized world in which we live.

We cannot really predict what will happen with the US ban. The US Department of Commerce has considered expanding it, banning exports of products containing barely 10% American technology, up from 25% currently. Ironically, the plan was abandoned at the request of the Defense Ministry, which was concerned about its high impact on American businesses.

Also read: Crazy idea: maybe Huawei should definitely abandon official Android

The reason Commerce wanted more restrictions is Huawei’s ability to source components outside of the United States. The ban is not as effective as the United States government would have liked. Although Huawei seems to have all of the hardware components it needs, the software remains an issue. Google’s suite of apps and mobile services (which many third-party Android apps rely on) is the biggest thing Huawei still needs. This is a plausible reason why Google has not received an exemption from the ban, unlike Microsoft.

Will Huawei return to the Google ecosystem?

On the other hand, Huawei could benefit from the current easing of the Sino-US trade dispute. Although neither side admits it, Huawei is too big and too important not to participate in the negotiations. There is a precedent for this. President Trump has lifted sanctions on ZTE as a sign of goodwill towards Chinese leaders.

If the ban is lifted or Google gets an exemption, the next question is: Will Huawei revert to the Google ecosystem? The answer seems obvious, but recent comments from a Huawei Austria executive cast doubt on the idea that everything will return to normal. The executive has stated, in clear terms, that Huawei do not return to using the Google platform even if the United States allows it. Huawei then claimed it was a misunderstanding. “An open Android ecosystem remains our first choice, but if we are unable to continue using it, we have the capacity to develop ours,” the company said in a statement.

The long game

In theory, Huawei could abandon Google, withdraw to China and abandon all of its efforts to expand internationally. The Chinese market is large enough to allow it to survive indefinitely, albeit on a much smaller scale. It is unlikely to happen, however. Instead, Huawei will likely start shipping phones to Google’s platform again, but will continue to diligently develop its own platform in the background.

Huawei has already announced billion dollar initiatives to encourage developers to join its platform. The company is putting a lot of effort into making its original Huawei mobile services a practical alternative to Google mobile services.

Now that Huawei has seen how easy it is to lose vital access to Google and other U.S. technologies, it will double its efforts to become independent. It is regardless of the outcome of the ban. In fact, a possible lifting of the ban would give Huawei’s ecosystem even more momentum, as developers in the United States will be able to offer their apps for free in the Huawei app store.

Huawei cannot abandon Google – which is essential for global markets at the moment – but the company will do everything it can to protect itself from future disruptions. Huawei has the means and the motivation to build an alternative to the Google platform. And other Chinese phone manufacturers can support this effort, by self-preservation for nothing else. There are already reports that Huawei, Xiaomi, Oppo and Vivo have joined forces to launch their own app store.

Huawei has the means and the motivation to build an alternative to the Google platform.

Beyond the ban

The ban has sucked the air out of all conversations, but Huawei remains a very competitive and popular consumer brand. The company should continue to do what it does well: launch beautiful phones.

The Huawei P40 Pro will arrive on March 26, 2020 at an event in Paris, and it will be a photo center. Like other P-series phones, it will push the limits of camera hardware, and we have reason to believe that Huawei will do everything. Richard Yu has already described the first entry in the series to come as “the most powerful 5G flagship in the world,” confirming both support for 5G networks and highlighting Huawei’s extreme confidence in the device.

The P40 Pro will go against the Galaxy S20 Ultra, with its feature-rich camera system (which includes a periscope optical zoom system that Huawei pioneered). Huawei won’t be able to get away with just an incremental update, it will need all new features if it is to have a chance against Samsung.

The other big reason why we are waiting for a good version is, well, because Huawei really needs to impress. Assuming it won’t get Google apps in one way or another, the P40 Pro will only have to shine on its hardware.

Evan Blass Huawei would give the P40 Pro an appropriate launch in Europe, with or without Google apps. If this is true, Huawei will market the P40 Pro much more aggressively than it did with the Mate 30 Pro.

We have already seen that Huawei is not afraid to launch new premium phones outside of China despite the ban. After MWC was canceled without warning due to health concerns, Huawei instead hosted its own virtual launch event where it unveiled the Huawei Mate XS – its second foldable phone and an upgraded version of the original Mate X . by no means a consumer product, but the launch of an Android device of almost $ 3,000 without Google Mobile Services is at least a bold demonstration of the intention.

Going forward, we expect more news from developer partnerships to fill the void left by Google’s missing apps. The agreement with the map supplier TomTom could serve as a model: Huawei would be able to use TomTom’s software and map data to create its own applications. A hypothetical Huawei Maps service would require a commitment of several years, but that’s exactly what Huawei needs if it wants to shelter from future bans.

Huawei is also likely to pay money into Huawei Mobile Services and its App Gallery store. Expect more generous incentive announcements for developers, and maybe a few big names hopping on the bandwagon.

Huawei will have to present itself as a trusted platform builder who can play the role of Google.

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Huawei has survived a challenge that would have killed almost any other company. In the coming year, the new challenge will be to convince customers – from consumers to businesses – that it will go nowhere.

In the long term, Huawei will have to present itself as a trusted platform builder who can take on the role of Google at the heart of a parallel Android ecosystem. Huawei’s job now is to fix broken bridges and build new ones, however the U.S. ban goes. Does the company measure up?