On Tuesday evening, two Chinese websites reported that Huawei is set to launch its alternative to the Android operating system sooner than expected, as it battles Google’s removal of Android from its next generation of smartphones following the U.S. blacklist. Richard Yu, Consumer Business CEO, revealed that the Huawei OS “designed for the next generation of technology,” which has reportedly been in the works since 2012, “will be available in the fall of this year and at the latest next spring.”
Huawei needs to calm the market and reassure its user base that they can continue to trust the brand. On Tuesday, the South China Morning Post published a gloomy outlook on the company’s likely ability to maintain its hard-fought number two slot in the global smartphone market. “Google’s restriction of business ties with Huawei,” the newspaper reported, “could obliterate demand for the Chinese company’s devices overseas and give market leader Samsung a leg up in cementing its lead in Android devices.”
The SCMP article quoted Bryan Ma, vice-president of client devices research at IDC Asia-Pacific, saying that “as far as overseas markets go, this move just turned Huawei’s upcoming phones into paperweights. The phones won’t be very useful any more without Google apps on them, and other apps will be unable to call on Google Play services.”
Now, according to Yu, the new Huawei OS “is open to mobile phones, computers, tablets, TVs, cars and smart wearable devices,” critically the “unified operating system” is also “compatible with all Android applications and all web applications.” Yu also claimed that “if the Android app is recompiled, running performance is improved by more than 60%.”
There have been conflicting reports in the media as to how viable the new operating system is, with the implication that this might be more PR crisis management than product announcement. According to the Information, the OS project “has had its ups and downs and remains far from ready.” But, even so, the company has broken cover and so we can expect more detail in the coming days. There was also some uncertainty about whether Yu’s comments on app compatibility were entirely accurate, or whether apps would need to be repurposed for the new OS.
“I can’t believe that the U.S. government has limited Android,” Yu told the Information. “It’s a consumer product that has no relationship to network security issues.” Yu added that the U.S. blacklisting came as a “big surprise for me,” and means “really a very tough time” for the consumer business. Yu acknowledged that, unless the sanctions are lifted, it will be extremely difficult for the company to hit its consumer business targets, which rules out targeting Samsung’s crown and may even mean ceding the number-two slot back to Apple.
According to reports last year, Huawei “started building its own operating system after a U.S. investigation into Huawei and ZTE in 2012.” Huawei also has its own OS for tablets and personal computers.” Back in April 2018, SCMP commented that the U.S. ban on ZTE from using American products and services “has served as a reality check for China’s technology ambitions – the prospect that ZTE could lose its license to use Google’s Android operating system for smartphones has also raised the question: does China need its own smartphone OS as a backup?”
It does indeed, and Huawei founder Ren Zhengfei had told a Chinese state media broadcast on Tuesday that the U.S. ban will not impact company plans with rivals “at least two to three years behind.” He also said that “the current practice of U.S. politicians underestimates our strength.”
On Monday, the U.S. government confirmed a 90-day grace period for Huawei to maintain and support existing customers, it aligns with confirmation that existing smartphone users will not be cut off from updates and services. The main battleground for Huawei is Europe, not the U.S. And it is the risk that the U.S. move damages its European business that is most feared in Shenzhen.
Google “has zero motivation to block us. We are working closely with Google to find out how Huawei can handle the situation and the impact from the U.S. Department of Commerce decision,” Huawei’s representative to the EU told Reuters on Monday. “Huawei is becoming the victim of the bullying by the U.S. administration. This is not just an attack against Huawei. It is an attack on the liberal, rules-based order.”
Huawei launched its new Honor smartphones on Tuesday. George Zhao, president of the brand, told his audience that “no matter what happens, no matter what kind of challenges, smile and overcome them. Reuters reported a company spokesperson saying that “the new smartphones had already been certified by Google before it announced any restrictions.”
As I commented on Tuesday, all eyes should now turn to China, to see what Beijing does next. They may hold significant trade negotiation cards to seek to unlock Huawei as was done for ZTE. “We believe this is a wrong practice of the U.S. side,” a Foreign Ministry spokesperson told reporters on Friday. “It is only natural for China to take all necessary measures to safeguard the legitimate rights and interests of Chinese companies.”