Huawei could survive without Android, but it would not be pretty

The US government may have forbids Huawei to use any software or material created by US companies, but the Chinese phone giant is convinced that the lack of support from US partners will not ruin the brand, even if its Android-based devices are cut off from Android Google cuts commercial links following the executive order of President Trump.

No stranger to the tension with the US government, Huawei proved that he does not need US carriers to develop its business. Huawei is the world's leading supplier of network equipment and the second brand of phones. The tech giant would have worked on his own operating system as an alternative to Android software (and its own Huawei app store) in the event that relations with US companies go south. And go south is east. Just today, Huawei was suspended from the Wi-Fi Alliance and removed from the SD Association, which set guidelines for SD memory cards used in phones and other devices.

"Our company will not end up with extreme shortages, we are well prepared," Huawei CEO Ren Zhengfei told Chinese journalists this week. "At the beginning of this year, I predicted it would happen … We thought we would have two years to get ready, but when [Huawei CFO] Meng Wanzhou was arrestedhe started everything. "

This is not surprising. Huawei has been in the US Government's line of sight for years, a de facto ban in 2012 (some might call this a strong incentive) effectively keep Huawei phones from US carriers despite previous relationships there.

But a look at the current smartphone market reveals how the company could fail if it tried to go it alone. Android and iOS form a duopoly, with 86% of all phones in the world under Android, according to IDC, about 14% under iOS from the iPhone and 0% under any other platform.

The days when three, four and even five mobile operating systems were fighting for dominance are far behind us, and the last hurdles – Windows Phone, BlackBerry OS and WebOS – have long been crumpled or converted to Android.

Even his rival Samsung, who was investing in his own open source operating system Tizen (which you see on Samsung smartwatches like the Galaxy Watch Active), could not make any significant effect. Huawei's chances of creating a third operating system will be more successful in its home country, China, where it sells 50% of its total phones (60%) (estimates vary by source).

However, in markets outside of China, such as Europe, Australia, the Middle East and Latin America, an operating system that does not fully support Android means that customers have to make their own farewell to basic services such as Gmail, Google Maps and Google Assistant.

"The operating system is less of an immediate problem for Huawei than the lack of Google applications," said Ben Wood, head of research at CCS Insight, in a report on the situation. "There is no doubt that Huawei must have access to the full range of Google applications and services that are critical to success in Western markets."

Temporarily relaxed restrictions mean that Huawei and Google can still work together Current Huawei Android phones, like the Huawei P30 Pro, will be powered with security updates and Google's Android services until August 19th. However, the loss of Google support by Android for future phones could spell disaster for Huawei's business and impact the global smartphone market.

"We expect trade wars to threaten a potential 5% drop in global mobile phone shipments in 2019," Wood said.

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Huawei does not need Android, but the alternatives would not be easy

Huawei phones in China are already running without Google applications and services, although Android is laying the groundwork. Google search and other software services are blocked in China. Even on Android phones, Google Play services and other apps do not work.

This means that Huawei phones in its home market already use alternative applications and software for cards, mail and video – there are no Google Maps, Google Search, Google Assistant, Gmail or Youtube. Security services such as Google Play Protect and software that synchronizes contacts and offline services are also removed.

Even on Huawei and Honor phones sold outside of China, Huawei, like many brands, uses a homemade user interface. In the case of Huawei, Emotion UI (EMUI) displays icons on the home screens, the interface of the software more like iOS than Android in some respects.

If these devices are already operating under their own rules, it's easy to see how Huawei could rip off the Band-Aid and go alone. Ren said that Huawei has between 80,000 and 90,000 engineers in research and development in the company, some of whom are preparing for "Plan B" or, as their CEO called them, "spare tires" .

"I'm not sure consumers want a third operating system," said Carolina Milanesi, an badyst at Creative Strategies. "It certainly would not help the United States, but it could make a difference in Europe as long as developers are ported and still able to get Google services, which I think , is the most delicate part. "

Even if Huawei had to go ahead, a Huawei operating system is "far from ready," The Information reported. The internal software project "has had its ups and downs and remains far from ready," sources told the publication.

On Friday, the Wall Street Journal announced that Huawei had received the "Hongmeng" trademark for its operating system from the National Intellectual Property Administration of China, after working there under the name of internal code "Project Z."

Nevertheless, it is unlikely that Huawei can be replaced immediately if the US government continues to ban future phones.

What about foldable phones?

Google support also has a hand in foldable phones. Huawei has not announced what operating system it uses on the foldable Mate X The summer release is planned, but Google works closely with the manufacturers of folding phones. It provides software that allows applications to quickly move from a smaller screen orientation to a larger screen when unfolded, and vice versa.

It's not clear whether being cut off from Google would delay Huawei's ability to compete with Samsung on this next smartphone competition front.

Samsung declined to comment.

The open-source option does not solve the problem of Huawei's application

Huawei could of course continue to base its phones on Android even without the active partnership of Google. AOSP, the Open Source Android Project, is a free code that anyone can use. But taking this route would put Huawei late by several months. Losing quick access to newer versions of operating systems like Android Q, to regular security patches and technical support.

Do not forget that the US Department of Commerce has reduced certain restrictions to allow the support by Android of existing Huawei and Honor brand phones. These are future phones – like the Huawei Mate 30 or the P40 Pro – that weigh here.

"There are workarounds for these international markets, but none are attractive because Google's services are so ubiquitous," said Wayne Lam, Senior Analyst at IHS Markit. "It was thought that Huawei could leave the boot loader unlocked and provide point-of-sale / technician tools to reconfigure the ROM to bypbad the Google brand, but that poses problems in itself."

If global buyers of future Huawei phones were to download US apps and games instead of downloading them directly from an application store, even Huawei's, there is no doubt that this would disable customers who have finally left Windows Phone and BlackBerry OS could not provide the applications and services offered by Android and iOS.

"There are so many obstacles to overcome and uncertainties for a consumer who, in the end, has other solutions," said Mr. Milanesi.

It is likely that without the Google application store and services, Huawei's customers out of China would relocate.

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Are we even going to this point?

There is a chance that China and the US government solve the problem before it materializes. President Trump has already said that he had consider using Huawei as leverage in a trade deal with Chinawhich means that Huawei could be allowed to meet with his old business friends.

The US government has already relaxed its position to protect consumers with Huawei phones. The Chinese brand ZTE was similarly cut from its US suppliers in 2018, only to get bailed out by Trump in a tweet when his business stopped.

"The goal of the Trump administration is to demand China's concessions on trade, especially on the treatment of intellectual property," Lam said. "The question of whether the Trump administration can get this result is suspicious, but as next year will be an election year, I anticipate that this trade dispute will be resolved in the near future."

"Huawei is probably hoping for a quick return to normal business," Wood said.

Huawei did not comment on this story.

Originally posted on May 23 at 9:28 PT.
Updated, 12:29 PT: Adds that Huawei and Samsung refused to comment.
Update May 24 at 6:21 am Pacific Time: Add a report on the Hongmeng brand.
Update May 24 at 11:24 am Pacific Time: Adds a report on the removal of Wi-Fi Alliance and SD Association.
Update May 25 at 16:00:
Addition of a report on the leverage effect in the trade agreement with China.