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LONDON – Europe is one of Huawei's biggest successes. It is now at the forefront of the trade and technology war between China and the United States.
Google's decision this week to cut Android support for phones manufactured by Huawei, the Chinese telecom giant, will hinder their European users and highlight how the continent depends on US and Chinese companies for their gadgets, applications and services Internet.
From its beginnings in the sale of equipment to mobile operators, Huawei has grown at an extraordinary pace in Europe, capturing more than a quarter of the smartphone market. Google's action is "potentially catastrophic" for Huawei's hopes in Europe, said Ben Stanton, senior analyst at Canalys, a research firm.
The Trump Administration's Order Prohibiting US Telecommunications Companies from Using Foreign-Made Equipment That Could Constitute a National Security Threat – What Washington Criticizes Huawei – Could Affect the Experience Significantly smartphone users. Google Maps and other applications, for example, will not be supported.
European customers will be more affected than those in the United States or China. Huawei phones are largely unavailable in the US and Google's services have long been blocked in China by the government.
But they are the best sellers in countries like Greece, Portugal and Spain. These phones, along with strong sales of telecom equipment, have made the market covering Europe, the Middle East and Africa Huawei's second largest market after China. It accounted for 28% of Huawei's revenue in 2018, compared to 7% in America.
The pressure has risen. Since the order of the administration, one company after another has decided to suspend its activities with the company, which is the second largest manufacturer of smartphones after Samsung.
Google has announced its withdrawal on Monday. The Commerce Department announced that it would grant a 90-day extension to businesses to determine how to support existing cellular networks and handsets, but Google has announced its intention to comply with the decision. once the time has elapsed.
Huawei will be unable to recover quickly, analysts said.
"It would be extremely unlikely that they will use their own operating system here in the short term," said Dario Talmesio, telecommunications analyst at Ovum, a research and consulting company based in London. "And that means that existing Huawei device users will gradually see Android-dependent devices deteriorate because they will not be able to perform certain upgrades."
It is unlikely that customers who buy a handset will buy one that does not come with the latest version of Google's Android, applications like Gmail or the Play Apps Store. The decline in demand for Huawei phones could also affect European operators "who rely heavily on the quality, relatively low prices, of Chinese devices" to bring their customers on the new hyperfast networks to come, said Mr. Talmesio.
Huawei's net results could be hurt by the loss of sales of its more expensive phones, with their high profit margins, said Steve Tsang, director of the China Institute at the School of Oriental Studies and African Studies in London. And the reduced prospects in Europe could hinder Huawei's ability to expand elsewhere.
"Being able to succeed in Europe means that it's a lot easier for Huawei to succeed in the rest of the world," Tsang said. "Success in Europe is important for Huawei, both in terms of revenue and future growth."
To succeed in Europe, Huawei has been working hard for almost two decades to work with network operators and allow governments to test equipment for security breaches. Huawei started by providing cheap equipment to build telephone networks in countries such as Britain, Germany, France and Poland. The company has become the world's largest seller of telecommunications equipment, surpassing Nokia and Ericsson.
Huawei deepened its reach when it started selling mobile devices, first as inexpensive alternatives to a Samsung Galaxy or Apple iPhone, then with more expensive models, respected for their technology. Huawei offers carriers and retailers better financial terms than their competitors by enabling them to earn money with each handset sale. Industry analysts said retailers are being encouraged to display and promote Huawei phones.
This strategy allowed Huawei to sell more than 42 million smartphones in Europe last year, according to Canalys. "Huawei has been the darling of the European smartphone industry for three or four years," said Stanton of Canalys.
Huawei's growth shows how much Europe's influence in the technology sector has faded.
European policymakers have tried to feed the region's technology sector, which has played an important role in the growth of the global technology sector. In Finland, Nokia was once the world's largest seller of mobile phones, and Skype, founded by Scandinavians, helped launch the now common ability to make calls over the Internet. But Europe could not follow Silicon Valley or Shenzhen, where Huawei's headquarters are.
For months, Washington warned its allies of the security risks associated with Huawei, but many of them hesitated during his assessment. The Trump administration has threatened its intelligence-sharing relationship with Germany, Britain and other allies while Huawei was looking to set up its fifth-generation network, or 5G. Networks promise not only faster cellular service, but also better wireless connections for "Internet of Things" devices such as autonomous cars, security cameras and industrial equipment.
The Trump administration's order shifted the debate on Huawei beyond the more obscure equipment needed to create wireless networks to which consumers can buy phones and apps they can use.
"It's not under our control," Talmesio told Ovum. "We are stuck in the middle of this trade war and we are really becoming a kind of proxy war territory."
Google's decision surprised potential phone buyers in Europe and many hesitated. The security risks were not their concern. They wanted to know that their phones would work anywhere.
"Apps like YouTube and Google Maps are vital," said George Kirmizidis, an official who is navigating a BASE mobile phone store in Brussels. "If I can not access it via my smartphone, what is the point of buying a smartphone?"
"As a customer, I would of course be able to choose between different products. Huawei is no longer on the market for me, "said Kirmizidis, 44. "I have a limited choice of products, which is not fair if we support capitalism."
Solongo Unurbat was examining a Huawei phone with a selling price of more than $ 1,000 in the Berlin shopping center. The 34-year-old was not worried about Google's loss of functionality.
"For me, everything is about the camera," she said.
Keerthana Annamaneni wrote reports from Brussels and Christopher F. Schuetze in Berlin.
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