Had the U.S. not interfered in Huawei’s phone business in 2019 and 2020, there is little doubt that the company would be the largest smartphone manufacturer in the world right now. On May 16th, 2019, the U.S. placed the company on its Entity List banning it from accessing its U.S. supply chain that it spent $18 billion on the year before. It also blocked the company from using Google’s apps including the licensed version of Android.
Huawei is making the switch from Hardware to software as it looks to be the next Google
Exactly one year later to the day, the U.S. made a change to its export rules banning global foundries that use American technology from shipping chips to Huawei without a license. This obviously was the straw that broke the camel’s back since the U.S. essentially prevented the Chinese manufacturer from buying all of the cutting-edge 5nm Kirin chips from TSMC that it designed itself. Huawei ended up selling its Honor sub-unit so that it wouldn’t be impacted by the U.S. bans and this year Huawei could end up the seventh largest phone provider worldwide.
Huawei will reportedly use HarmonyOS 2.0 on the P50 series
CNBC reports that yesterday, Huawei introduced some new cloud computing products putting it in competition with China’s Alibaba. In a press release issued on Sunday, Huawei said that it wants the focus on cloud to “eventually increase the proportion our software and service business has in our total revenue mix.” For example, last week Arcfox launched a car that featured a cockpit decked out with Huawei’s HarmonyOS, the software that Huawei is counting on to replace the Google licensed version of Android on its phones.
Neil Shah, research director at Counterpoint Research, stated that “Huawei is doubling down on pivoting to a software/cloud and services company.” He notes that thanks to the restrictions placed on Huawei by the U.S., the firm is “unable to procure critical semiconductor components and related tech” from the states. Shah says that Huawei’s focus has turned from hardware to software “and with this effort is becoming like Google.”
Huawei says that HarmonyOS can be used to run several different products from smartphones to televisions and even automobiles. IDC research manager Will Wong says, “The smartphone business is facing challenges, they have another mobile platform which is the car for them to utilize HarmonyOS. The car could be a big mobile platform to apply and use HarmonyOS.
Will says that the U.S. doesn’t have easy pickings on Huawei now that it has already jammed up the firm’s U.S. supply chain and chip supplies. Software will be harder for the U.S. to screw around with, he says. “It will be more protected when talking about geopolitics from the U.S.,” according to Wong.
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