What Google's breakup with Huawei means

Wednesday, 22 May 2019

OPINION: The news that Google has suspended business with Huawei is huge. And, if this decision becomes permanent, I'd even go as far as suggest that this could be the end for Huawei smartphones in the West.

Make no mistake. Huawei is the big loser here. Its smartphones run a modified version of Android, which as you know, is owned by Google. And from now onwards, Google won't be supporting Huawei with its future versions on Android.

Kiwi phone companies tell customers to think twice before buying Huawei phones.

This is unprecedented in the technology world.

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There won't be any immediate effects for Huawei smartphone users in New Zealand (and the rest of the world). Any smartphone that's already in use, or is currently on the shelf, will continue to enjoy access to Google's apps and the Google Play store.

US President Donald Trump issued an executive order apparently aimed at banning equipment from Chinese telecommunications giant Huawei from US networks.

However, future Android software updates - which contain security updates - will no longer make their way to Huawei smartphones.

This leaves Huawei with a big decision to make. It can use a watered down version of the mobile operating system (OS), known as the Android Open Source Project (AOSP). But this won't give it access to key Google apps such as Google Maps and YouTube. Meaning consumers will have little appetite to buy the hardware.

Alternatively, it could choose the nuclear option, and launch its own mobile operating system and compete directly with Android and Apple's iOS.

This would be a bold move. Microsoft spent the best part of a decade trying to launch its own mobile operating system and wasted billions of dollars before admitting defeat.

Have you ever heard of Tizen? That was the Linux-based mobile OS that Samsung tried hard to push. Symbian? That was Nokia's attempt. BlackBerry? Ha.

There have been several more attempts to launch a challenger to Andoird and iOS.

They have all failed. And the consensus in the tech world suggests that they all fail because app developers don't build apps for their platforms because they're too niche.

If Huawei were to launch a brand new OS for its phones in Western markets it would face the exact same problem that Windows, Samsung, Nokia and BlackBerry all faced. And it would be starting from scratch.

Which, in real-world terms, means no Facebook, Twitter, Instagram apps. No Google Maps. No Whatsapp. No ANZ, BNZ or Westpac banking apps. no Trade Me. The list is almost endless.

And who wants a phone with no apps? Not me.

How have we got here?

In a word, Trump. Google's decision wasn't much of decision at all. It had to stop working with Huawei when Trump upped the stakes in the US' trade war with China.

On Monday morning (NZ time), Trump signed an executive order, declared a national emergency that essentially forced Google to suspend its operations with Huawei. How long this will last is anyone's guess.

But, Trump will argue it's been coming for decades.

As well as Chinese companies (such as Huawei) allegedly presenting a security risk, The Great Firewall of China, he'll argue, has blocked US company access to the Chinese market for over two decades.

And he's not wrong. The lack of Facebook, Google, Whatsapp, Instagram, Twitter and company in China has left a considerable gap in the market. And, as we know, that market is a big one — the biggest in the world.

And the gap has been filled exclusively by Chinese companies. Would WeChat be as big in China as it is now if it was competing with Facebook, Google and Twitter? We'll never know.

What we do know is that China won't simply swallow this. In fact, the country is already flexing its muscles.

Ever head of Lanthanum, Cerium, Neodymium and Praseodymium?

No. Fair enough. And nor should you. But they're important 'rare earths' which are vital minerals for the manufacturing of smartphones, hybrid cars, weapons, TVs, and camera lenses. And much more.

And yep. You've guessed it. China is a global leader at mining these minerals. Over the past decade, China has produced more than 90% of the world's rare earth elements.

President Xi Jinping was less-than-subtle with his message to the US when he visited one of his country's top rare-earth mines following the news regarding Google and Huawei.

Watch this space. This is far from over.