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Nov 16, 2019, 09:25am
Huawei Warns Trump And Google: You’re Running Out Of Time
Zak DoffmanContributor
Cybersecurity
I write about security and surveillance.
Huawei’s well-orchestrated media campaign continued this week, as the Shenzhen tech giant continued to battle the unprecedented U.S. sanctions and campaign levelled against it. In recent weeks, the focus of that campaign has been continued growth across both network equipment and consumer products, sending the message to Washington that the blacklist is not working as planned. Yes, it is having an impact—but not one that is going to change the global technology landscape anytime soon. Well, at least not in a way the U.S. would want to see. And that is the deeper context behind that message Huawei is sending to Washington—be careful what you wish for.
The greatest blacklist impact so far on Huawei has been the loss of Google from its new consumer devices. This has proven to be the one piece of tech it can’t “un-Americanize.” On the one hand, this has introduced risk into Huawei’s sales growth outside China, but on the other hand it is becoming apparent that U.S. technology giants, in particular Google, may pay a long-term price if Huawei’s isolation continues, if Huawei is forced into a genuine Plan B. And if that happens, the U.S. risks losing its monopoly influence over key elements of worldwide technology standards.
The issue here is that if Huawei is forced to build a Google-free future, it raises the possibility of a third-way alternative to full-fat Android and iOS that is controlled in China and not California. If that happens, if an app ecosystem can be nurtured that competes with the two global operating systems, and if manufacturers from China and South East Asia jump onboard, the tech landscape will have changed materially. None of the U.S. tech giants want to see this, a new landscape driven by Washington that has a drastic impact on the country’s own tech sector.
There were echoes of this deeper context again this week, with a Huawei exec hinting—or threatening, depending on how you view it—that the company will have to decide its future within the next few months: Continue with Google or take that different path. The threat centres on Huawei’s IoT operating system, HarmonyOS, which was designed for smart TVs and appliances, but which (Huawei execs have hinted since the blacklist hit) could become a Google Android alternative on smartphones.
In truth, the HarmonyOS badge can mean many things. Despite company execs stressing that it could become a short-term Android replacement when the blacklist first hit, this was soon revised down, with an admission that it was not designed for smartphones after all. But now a fudge has been found—the restricted elements of Android—Google Play, Maps, Gmail, Pay—can be replaced, but the open-source and unrestricted Android can remain. “Harmony is not a replacement for Android," Huawei VP Vincent Pang told the press. “It's a next generation of Android."
If that was a hint as to the latest thinking in Shenzhen, it came with an implied threat: Time is fast running out for a return to business as usual. "We cannot wait more, we missed one flagship,” Peng said, referring to the Google-less Mate 30 that launched in September to a flat international sales response. The clear implication is that before the company’s next product launch cycles, starting in the Spring and running to the Fall, some certainty will need to be found. And Google badly wants back in the mix.
In May, when the U.S. stripped Huawei of its U.S. supply chain, the company’s CEO Ren Zhengfei told Bloomberg that “it's good enough for us to just survive—you can come back to interview us in two or three years and see if we still exist.” But it has not worked out as expected. Huawei has continued to grow its consumer business, leaving Apple further behind and chasing down Samsung for the global crown. Huawei also still leads the pack for network equipment sales, despite a relentless U.S. campaign claiming the company is a national security risk.
Huawei’s smartphone resilience has been driven by China’s insatiable demand for its devices, its networking resilience has been supported by Europe, where it has signed half of its recent contracts. Both those markets have shown resistance to U.S. pressure, which tells Washington that it needs to decide which battles to fight. Ultimately, given the U.S. blacklist has failed to reverse Huawei’s growth, would Washington be better served using it as leverage in wider negotiations with Beijing?
A reading of the news coming out of Washington does suggest something like this is now in mind. The Commerce Department has confirmed that it is preparing to grant exemption licenses for U.S. companies to sell to Huawei. And, as reported by my colleague David Phelan for Forbes, a wider, temporary blacklist blacklist exemption that expires on Monday is under review. When the last extension to this wider exemption was granted, U.S. officials said it would be the last such move. Now, though, there is talk of a longer extension—perhaps after a two week grace period.
What is clear is that the U.S. line on Huawei—rhetoric apart—is much more complex than it was two months ago. The company is proving resilient, and its use as a bridge between Beijing and Moscow has unnerved certain watchers. As things stand, Shenzhen has reason for optimism that it may have ridden out the eye of the storm. For the U.S., though, there is still much to play for. Its key decision now is around what it extracts from Huawei or Beijing in return for continuing this direction of travel.
Follow me on Twitter or LinkedIn.
Zak Doffman
I am the Founder/CEO of Digital Barriers—a company providing advanced surveillance tech to the defence, national security, counter-terrorism and critical infrastructure sectors. I write about the intersection of geopolitics and cybersecurity, as well as breaking security and surveillance stories. Contact me at zakd@me.com
Huawei Warns Trump And Google: You’re Running Out Of Time
Zak DoffmanContributor
Cybersecurity
I write about security and surveillance.
Huawei’s well-orchestrated media campaign continued this week, as the Shenzhen tech giant continued to battle the unprecedented U.S. sanctions and campaign levelled against it. In recent weeks, the focus of that campaign has been continued growth across both network equipment and consumer products, sending the message to Washington that the blacklist is not working as planned. Yes, it is having an impact—but not one that is going to change the global technology landscape anytime soon. Well, at least not in a way the U.S. would want to see. And that is the deeper context behind that message Huawei is sending to Washington—be careful what you wish for.
The greatest blacklist impact so far on Huawei has been the loss of Google from its new consumer devices. This has proven to be the one piece of tech it can’t “un-Americanize.” On the one hand, this has introduced risk into Huawei’s sales growth outside China, but on the other hand it is becoming apparent that U.S. technology giants, in particular Google, may pay a long-term price if Huawei’s isolation continues, if Huawei is forced into a genuine Plan B. And if that happens, the U.S. risks losing its monopoly influence over key elements of worldwide technology standards.
The issue here is that if Huawei is forced to build a Google-free future, it raises the possibility of a third-way alternative to full-fat Android and iOS that is controlled in China and not California. If that happens, if an app ecosystem can be nurtured that competes with the two global operating systems, and if manufacturers from China and South East Asia jump onboard, the tech landscape will have changed materially. None of the U.S. tech giants want to see this, a new landscape driven by Washington that has a drastic impact on the country’s own tech sector.
There were echoes of this deeper context again this week, with a Huawei exec hinting—or threatening, depending on how you view it—that the company will have to decide its future within the next few months: Continue with Google or take that different path. The threat centres on Huawei’s IoT operating system, HarmonyOS, which was designed for smart TVs and appliances, but which (Huawei execs have hinted since the blacklist hit) could become a Google Android alternative on smartphones.
In truth, the HarmonyOS badge can mean many things. Despite company execs stressing that it could become a short-term Android replacement when the blacklist first hit, this was soon revised down, with an admission that it was not designed for smartphones after all. But now a fudge has been found—the restricted elements of Android—Google Play, Maps, Gmail, Pay—can be replaced, but the open-source and unrestricted Android can remain. “Harmony is not a replacement for Android," Huawei VP Vincent Pang told the press. “It's a next generation of Android."
If that was a hint as to the latest thinking in Shenzhen, it came with an implied threat: Time is fast running out for a return to business as usual. "We cannot wait more, we missed one flagship,” Peng said, referring to the Google-less Mate 30 that launched in September to a flat international sales response. The clear implication is that before the company’s next product launch cycles, starting in the Spring and running to the Fall, some certainty will need to be found. And Google badly wants back in the mix.
In May, when the U.S. stripped Huawei of its U.S. supply chain, the company’s CEO Ren Zhengfei told Bloomberg that “it's good enough for us to just survive—you can come back to interview us in two or three years and see if we still exist.” But it has not worked out as expected. Huawei has continued to grow its consumer business, leaving Apple further behind and chasing down Samsung for the global crown. Huawei also still leads the pack for network equipment sales, despite a relentless U.S. campaign claiming the company is a national security risk.
Huawei’s smartphone resilience has been driven by China’s insatiable demand for its devices, its networking resilience has been supported by Europe, where it has signed half of its recent contracts. Both those markets have shown resistance to U.S. pressure, which tells Washington that it needs to decide which battles to fight. Ultimately, given the U.S. blacklist has failed to reverse Huawei’s growth, would Washington be better served using it as leverage in wider negotiations with Beijing?
A reading of the news coming out of Washington does suggest something like this is now in mind. The Commerce Department has confirmed that it is preparing to grant exemption licenses for U.S. companies to sell to Huawei. And, as reported by my colleague David Phelan for Forbes, a wider, temporary blacklist blacklist exemption that expires on Monday is under review. When the last extension to this wider exemption was granted, U.S. officials said it would be the last such move. Now, though, there is talk of a longer extension—perhaps after a two week grace period.
What is clear is that the U.S. line on Huawei—rhetoric apart—is much more complex than it was two months ago. The company is proving resilient, and its use as a bridge between Beijing and Moscow has unnerved certain watchers. As things stand, Shenzhen has reason for optimism that it may have ridden out the eye of the storm. For the U.S., though, there is still much to play for. Its key decision now is around what it extracts from Huawei or Beijing in return for continuing this direction of travel.
Follow me on Twitter or LinkedIn.
Zak Doffman
I am the Founder/CEO of Digital Barriers—a company providing advanced surveillance tech to the defence, national security, counter-terrorism and critical infrastructure sectors. I write about the intersection of geopolitics and cybersecurity, as well as breaking security and surveillance stories. Contact me at zakd@me.com
