Huawei has a new role model in Google
Had the U.S. not interfered in Huawei's phone business in 2019 and 2020, there is little doubt that the company would be the largest smartphone manufacturer in the world right now. On May 16th, 2019, the U.S. placed the company on its Entity List banning it from accessing its U.S. supply chain that it spent $18 billion on the year before. It also blocked the company from using Google's apps including the licensed version of Android.
Huawei is making the switch from Hardware to software as it
looks to be the next Google
Exactly one year later to the day, the U.S. made a change to
its export rules banning global foundries that use American technology from
shipping chips to Huawei without a license. This obviously was the straw that
broke the camel's back since the U.S. essentially prevented the Chinese
manufacturer from buying all of the cutting-edge 5nm Kirin chips from TSMC that
it designed itself. Huawei ended up selling its Honor sub-unit so that it
wouldn't be impacted by the U.S. bans and this year Huawei could end up the
seventh largest phone provider worldwide.
CNBC reports that yesterday,
Huawei introduced some new cloud computing products putting it in
competition with China's Alibaba. In a press release issued on Sunday, Huawei
said that it wants the focus on cloud to "eventually increase the
proportion our software and service business has in our total revenue
mix." For example, last week Arcfox launched a car that featured a cockpit
decked out with Huawei's HarmonyOS, the software that Huawei is counting on to
replace the Google licensed version of Android on its phones.
Neil Shah, research director at Counterpoint Research,
stated that "Huawei is doubling down on pivoting to a software/cloud and
services company." He notes that thanks to the restrictions placed on
Huawei by the U.S., the firm is "unable to procure critical semiconductor
components and related tech" from the states. Shah says that Huawei's
focus has turned from hardware to software "and with this effort is
becoming like Google."
Huawei says that HarmonyOS can be used to run several
different products from smartphones to televisions and even automobiles. IDC
research manager Will Wong says, "The smartphone business is facing
challenges, they have another mobile platform which is the car for them to
utilize HarmonyOS. The car could be a big mobile platform to apply and use
HarmonyOS.
Speaking of Huawei, we have put together the names of
Chinese built Android phones that you should buy this year.
Will says that the U.S. doesn't have easy pickings on Huawei
now that it has already jammed up the firm's U.S. supply chain and chip
supplies. Software will be harder for the U.S. to screw around with, he says.
"It will be more protected when talking about geopolitics from the
U.S.," according to Wong.
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