An Optimist's Opinionism about the Huawei News
OK, by now you’ve already heard the news, even if you are someone who doesn’t normally follow the tech scene: Google has suspended some of its business with Huawei. More specifically, Google has suspended business with Huawei which requires the transfer of hardware, software and technical services except those publicly available via open source licensing.
This news was broken by Reuters on Sunday May 19th 2019, just under two days before Huawei’s brand Honor is due to announce and launch their Honor 20 Series of devices globally. I’m writing this piece of rampant opinionism on an easyJet flight to London to attend that very event and cover it for the Tech Travel Geeks website and the Tech Travel Geeks YouTube Channel.
Many more clever and thoughtful commentators have already explained what has happened quite exhaustively and illustrated potential ramifications. I particularly enjoyed Vlad Savov of The Verge’s take and Andrew Martonik of Android Central’s piece.
Both analyses are quite bleak in their outlook for Huawei. Vlad’s piece has a pull quote which paints a chilling protein rich metaphor: “Deprived of Google’s software, Huawei would be selling featherless chickens”.
Andrew on the other hand has a bit more of a pragmatic statement to make: “It simply isn’t reasonable in 2019 for any company to launch a phone outside of China without Google Services.”
While in the short term I agree with both views, I have a different and uncharacteristically positive outlook in the medium and long term.
Huawei is a Chinese business who have been playing the long game in the tech industry for decades. The company has been consistently investing in research and development and building technical and product know-how along the road while slowly surpassing established players both in the networking and smartphone handset industry.
Having operated in the Chinese smartphone market, Huawei have also built up services and platforms that deliver a Googleless Android experience to tens of millions if not hundreds of millions of customers.
While many commentator’s Western view that Android without Google is close to a crippling experience, in my view this may not actually be the case. I think we are already moving to an OS or platform agnostic consumer market for smartphones. More and more consumers are switching between iOS and Android because the services which are really important to them are very similar. WeChat, Facebook, WhatsApp, Twitter and other popular services are all available on multiple platforms. As long as the services are available, the average consumer will be happy, regardless of what underlying service provider is there. Ben Thompson already described this market dynamic back in 2017 when analysing the fruity brand’s performance in China.
Huawei is currently the second biggest smartphone manufacturer in the world, and if this ban is implemented, I think in the short term their growth will surely be stifled. My long term view on the other hand is, as I mentioned more positive.
Huawei is a recognisable and strong enough brand to be able to power through this within 3 years thanks to some fundamental market dynamics:
1. The majority of smartphone consumer growth in the next three years will be in regions such as South America, South East Asia and Africa.
2. Huawei’s range of smartphone hardware excels on key features consumers REALLY want: battery life, good cameras and reliable overall device hardware.
3. Huawei can produce, sell and support a Googleless smartphpone experience on their devices in those markets and continue to grow and gain overall smartphone global market share (even if other regions are negatively affected by this ban). This is in part thanks to an established and aspirational brand, existing retail and network partnerships.
This won’t be easy, obviously. Once the critical mass of consumers of Huawei devices is out there, the providers of core services consumers use will be lining up to have a presence on the platform. Just think of the lengths Facebook has gone to have a presence in markets like India, even on non-smartphones.
As I mentioned at the beginning, Huawei are in this for the long game. They can weather a few bad seasons and still remain a relevant and successful player in the smartphone market, maybe introducing another significant smartphone platform on the global stage.
Anyway, this potential future unfolding of smartphone market events is just my Six Pence (you are None the Richer) while the Airbus A320 Neo I am on is starting to descend towards St Ansted.
The bigger issue was well summarised by others, and I’m just putting a few extra words on the Internet. Daniel Bader of Mobile Nations put it nicely when referring to some of the fanperson takes on Twitter delighting in the happenings reported.
I completely agree with Dan here.
What few have mentioned is that as part of this “Trade War” between the US and China we have all been focusing on the US’ move and the consequences and outlooks for Huawei and the smartphone industry as a whole.
What will be more interesting for me to see is what the Chinese Government’s next big move is: think what would happen to the smartphone market if all exports of the autumnal Apple iPhone product release were blocked by China. 2019 could be the first year with no new iPhone since 2007. Short term Apple would truly be crippled though they too can play the long game…
Another thought to leave you with: what if the real loser in this exercise in futility is actually Google who could lose their grip on Android, the operating system they created and fostered.
This was Matteo’s rampant opinionism piece concerning Google suspending some of its business with Huawei. You can read more about it from these excellent sources below. I’ll be in London tomorrow to cover the Honor 20 Series launch. Who knows, maybe my uncharacteristic optimism will change. Keep an eye on the Tech Travel Geeks YouTube Channel and TechTravelGeeks.com for more updates.