Huawei crackdown could damage consumer confidence in Chinese brand – analyst
Robie de Guzman • May 21, 2019 • 1597
The lack of access to Google services on Huawei smartphones could result in a loss of consumer confidence outside of China, chief of research at CCS Insight Ben Wood said on Monday (May 20), after news emerged that Google would comply with a U.S. order barring the Chinese company from updates to its Android operating system.
Google suspended business with Huawei that requires the transfer of hardware, software, and technical services except those publicly available via open source licensing on Sunday (May 19), in a blow to the Chinese company the U.S. government has sought to blacklist around the world.
The suspension could hobble Huawei’s smartphone business outside of China as the tech giant will immediately lose access to updates to Google’s Android operating system.
“This is a bombshell because it affects the devices, where irrespective of the problems they have had so far, the phones have kept selling. Huawei needs this to be resolved really quickly to make sure it doesn’t lose all that great momentum that it has got in the marketplace” Wood said.
Future versions of Huawei smartphones that run on Android will also lose access to popular services, including the Google Play Store and Gmail and YouTube apps.
Holders of current Huawei smartphones with Google apps will continue to be able to use and download app updates provided by Google.
“It could face a loss of consumer confidence and that loss of confidence could also extend to the retailers and the operators who are stocking their phones as well. Huawei will be hoping there is a very quick resolution so there is some real clarity on what they can and can’t do going forward,” Wood said.
“Huawei phones are cheap, it is the newest technology that is coming out. America has unfairly tried to suppress Huawei so they can boost their own inferior products. I think it is total trade discrimination. It is the sort of thing Britain used to do in the 19th century,” said Jacob Secker, a British consumer.
“If I couldn’t use Google Maps anymore, for that reason I won’t buy Huawei,” said German Consumer named Florian
Huawei said it will support its smartphones and tablets by providing security updates and services but it did not say what would happen with phones it sells in the future. (REUTERS)
Beijing on Wednesday (September 4) accused the United States of using its power to suppress a specific Chinese company without providing any evidence after China’s Huawei Technologies said the U.S. government had instructed law enforcement to “coerce” and “entice” its employees to turn against the company, as it steps up its pushback against a U.S. campaign that could threaten its survival.
Huawei on Tuesday (September 3) said the U.S. government was using its judicial and administrative powers as well as other means to disrupt its business and that of its partners.
“This kind of behavior is not only disgraceful, it is also immoral,” Chinese foreign ministry Geng Shuang said at a daily news conference, adding that the United States should stop its “irrational” pressure on Chinese companies and instead create a non-discriminatory environment for their operations.
Amid a trade war with China, Washington put the world’s No. 2 smartphone maker on an Entity List in May, in effect cutting off its access to essential U.S. components and technology, in particular, Google’s apps and services for Android devices. (REUTERS)
The status of Huawei in the United States market remains unclear after President Donald Trump announced plans to ease the trade ban against the Chinese company.
President Trump made the statement last week during the G20 Summit in Japan.
“We mentioned Huawei, I said we have to save that till the very end, we’ll have to see….One of the things I will allow however is, a lot of people are surprised, we send and we sell to Huawei a tremendous amount of product that go into the various things that they make, and I said that, that’s okay that we will keep selling those products,” he said.
However, despite the announcement, White House Economic Adviser Larry Kudlow said Huawei will remain blacklisted.
“Remember, Huawei remains on the enemy list, which is fundamentally a national security issue,” he said.
Meanwhile, trade talks between the US and China will continue next week to resolve a year-long trade war.—AAC (with reports from Mon Jocson)
The US has put Huawei on their trade blacklist and banned American companies from doing business with the Chinese firm due to security risk.
Google previously announced that Huawei’s newer smartphones will lose Android updates as well as apps including YouTube, Gmail, and Google Play.
Zhengfei alredy expressed concerns on the impact of the trade ban.
“We did not, in our initial assessment, expect it to be this serious. We had made our preparations, just like an old airplane, we had only protected our heart and our fuel tank, we did not protect the other necessary components. So in the next two years, the company will suffer a setback. Our output will drop by $30 billion and so our revenue would dip to around $100 billion this year and the next,” he said.
“Whether (Huawei’s) international smartphone shipments will drop 40%? Yes it will, drop by 40%. But the growth rate for Chinese smartphone sales is very fast, its very fast,” he added.—AAC
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