This is a crippling blow: What Google's decision to cut ties with Huawei means for the Chinese tech firm
- Google has banned Chinese tech firm Huawei from accessing some updates to Android, the most widely used mobile operating system in the world.
- Huawei is the second-biggest phone maker in the world behind Samsung, and the restriction is probably a death knell to its smartphone business outside China.
- Unless Google u-turns, Huawei will have to create its own Android fork without critical Google apps and services, or build a fully proprietary alternative.
- Even if Huawei puts a backup plan into reaction, user confusion and suspicion is a huge and possibly fatal blow to its international consumer business.
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Google has just dealt one of the biggest smartphone makers in the world a crippling blow.
The company has revoked Chinese tech giant Huawei's Android license, meaning the firm is now limited to using Android Open Source Project (AOSP), the barebones and Google-free version of Android. The move follows the Trump administration effectively barring Huawei from doing business with US firms.
The sudden change means new Huawei phones won't have access to the most popular Google apps and services, and Huawei will only be able to push Android security updates once they're available on AOSP, according to reports from Reuters and The Verge.
As yet, neither Google and Huawei have explained the precise implications for future phones. Google stated on Twitter that existing Huawei users will still continue to access Google's Play Store, and the app store's built-in malware protection.
But from what we do know at this stage, it looks like Google and the US have dealt a fatal blow to Huawei's smartphone business outside China. Here's why:
Huawei is dead outside of China without the world's most popular app store
Huawei doesn't offer Google services in China, where the search giant is largely banned. But outside of China, Huawei's now-revoked Android license allowed the company to offer popular Google apps and services and, most importantly, Google's app store on its phones. And Huawei's international business is huge, with 49% of its first-quarter phone shipments going to markets outside China, according to Canalys figures cited by CNBC.
Google's Play Store is the biggest app store in the world and, along with Apple's App Store, the only real way for legitimate app developers to market and distribute their apps. Android users are particularly reliant on the Play Store because Android apps are more likely to be malicious thanks to the open nature of the ecosystem. Going through the official app store gives users access to Google's built-in malware protection, Play Store Protect, and makes it less likely they'll download something nasty.
The change to Huawei's license means the company will no longer be able to offer the Play Store on new phones.
Huawei can always try and create its own app store, but similar efforts from other manufacturers have been almost universally unsuccessful. Samsung offers its own apps, including the much-panned smartphone assistant Bixby, through its Galaxy Store but, according to Statista, it doesn't offer anywhere close to the same number of apps as Google.
Huawei is also dead without Google services
Huawei has lost access to some of the most popular Google services, and that includes Chrome, Gmail, and YouTube, according to Reuters.
Chrome is the world's most popular mobile browser, according to StatCounter, with almost 60% of the market. Gmail has more than 1.5 billion active users, while YouTube has 2 billion users.
In short, a substantial percentage of the world's population rely on Google services in some way or another. Huawei's business inside China likely won't be affected but, as mobile analyst Francisco Jeronimo noted, Google services are a huge driver for Android phone purchases internationally. It's unlikely Huawei can continue its massive growth outside China without access to those services.
Huawei's backup operating system isn't ready
Huawei executive Richard Yu said in March that the company was relying on a plan B in case it was locked out of the US. Yu said at the time that the company had "prepared our own operating system" for its phones, tablets, and laptops. According to local news reports, the alternative OS has been in the works since 2012.
Having a backup plan is smart, given Google's tight control over Android and the ongoing trade war. But if there really is a backup operating system, there is no sign of it and nor is it clear that Huawei can really create an ecosystem to truly rival Android.
It also isn't clear whether app makers would be keen to create apps for yet another system.
Again, there is precedence here. Samsung created the Tizen operating system, but it has failed to disrupt the dominance of iOS and Android. Nokia likewise created a forked version of Android called the Nokia X platform, which replaced Google's services with alternatives or duplicates, which lasted only a few months.
Consumers are now confused about whether to buy Huawei devices at all
The first consumers knew of Google bowing to US pressure over China was a Reuters story on Sunday night, citing sources who said that Google had revoked Huawei's Android license. Google and Huawei frantically followed up with official statements suggesting current device owners would be unaffected for now.
But the story will cause massive consumer confusion, and that will be bad for business. Even a cursory search for "Huawei" on Twitter shows users frantically asking whether they should return their devices, and worrying their phones will be useless. That's bad news for sales, given Huawei has just released its flagship P30 series to the market.
Google's actions also now mean Huawei's smartphone business is being impacted by separate security concerns over its telecommunications equipment business for the first time. As yet, suspicions that Huawei installed backdoors into its kit hadn't split over into its smartphone business in a major way and the company's market share continued to shoot up. That will likely change thanks to the US and Google.