Less than two days after the announcement of President Trump's decree to strengthen control of commercial relations between foreign and US technology companies for the first big shoe to be abandoned: Huawei should lose access to Google applications and services completely, as well as future Android updates approved by Google. And unlike previous government intervention that only affected Huawei's ability to sell its smartphones in the United States, this decision has implications for the company's global operations. If it succeeds, it will irreparably damage Huawei's smartphone business.
By 2019, it's just not reasonable for a company to launch a phone outside of China without Google services.
Huawei, like all the other companies that are successfully selling Android phones, is relying on Google's support. Android is open source, of course, but as we have seen many times, an "Android" phone without applications or Google services is not what consumers want. (Coincidentally, this is exactly what the European Commission and Google are constantly fighting over.) The measures taken last week by the US government have meant that Google simply can not provide certification, applications and services to Huawei. And as such, Huawei seems destined to withdraw to sell only phones in China, where it does not have access to Google services in the state, and some very specific market and price segments for which Google services are not as important.
Many companies have tried to create Android devices without the Play Store and, while there are many successes in the tech space in general, there is nothing more than a long series of failures regarding smartphones. It's just not reasonable in 2019 for a company to launch a phone outside of China without Google services and to wait until it's actually sold. It can have the best cameras, hardware, specifications and basic operating system ever seen, but if it does not have Google apps, and especially the Play Store, no user will actually be interested in l & # 39; buy. I'm sure that Huawei can (and does) make a good phone with all its own services – but if it intends to compete in a market where 100% of phones have access to Google services and the Play Store, he must have them too.
It can be difficult to get out of our American perspective and realize how Huawei is a big market in the world of smartphones. Although its phones are actually no factor, Huawei's global smartphone market share is approaching 20 percent, which is now higher than Apple's. It has built the bulk of this market share by supplying value-conscious consumers around the world with phones with robust features and capabilities at exceptional prices. Even in high-income countries, Huawei has finally managed to break into the highly competitive phone space. It's a real competitor in most major countries of the world and a leader in some. Now he is destined to lose all this momentum.
Even if the ban was only in force for a short time and was overturned by a specific agreement with China or a future US administration, the damage would already be caused. Consumers are finally unstable – the first time someone buys a Huawei phone and finds that he does not have Google services, the Huawei brand name will be tarnished and you can bet that they do not will not turn to Huawei next time they improve. In the end, it will be extremely difficult to recover lost ground even after a short period of trying to sell phones without Google services; and things would not be better for Huawei who would have missed a year or two not being on the market with new devices of all kinds.
Huawei's global smartphone business will be irreparably damaged if this ban comes into full effect.
Of course, Huawei makes phones for China without Google services or support. And there are more than 1.3 billion people in China – it's a healthy market in itself. Huawei has nearly 30% market share in this market. It has set up its own operating system, services and partnerships to make its phones competitive in China, which would make you think theoretically do the same thing overall. But there are obvious differences that make this idea irrelevant, namely the history of Google services. never being available in China, Huawei was in competition with other companies that built their own ecosystems and did not adopt Google's.
You can bet that Huawei's market share in China will increase if it's actually its only market in which to invest. However, given its strong share of the global market and its sales, selling only in China would mark a dramatic reduction in its smartphone business. A lot of consolation.
The question remains how fast Huawei will choose to stop or suspend the development of its smartphone outside of China. Fortunately, we know that existing Huawei devices will continue to benefit from Google's support and receive updates, which will of course continue to move things forward. But if this US government ban on commercial operations comes into full force in the long run, Huawei will only have a few months left to make a very difficult decision as to whether it will choose to try to launch an Android phone outside of China. without Google services, or put all the operation on hold in the hope of a reversal of the decision. As painful as it may be for Huawei, my vote goes for Huawei.
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