Google has barred the world’s second biggest smartphone maker, Huawei, from some updates to the Android operating system, dealing a blow to the Chinese company.
New designs of Huawei smartphones are set to lose access to some Google apps.
The move comes after the Trump administration added Huawei to a list of companies that American firms cannot trade with unless they have a licence.
Google said it was “complying with the order and reviewing the implications”.
Huawei said it would continue to provide security updates and after sales services to all existing Huawei and Honor smartphone and tablet products covering those have been sold or still in stock globally.
“We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally,” it added.
In a press briefing, China said it “supports the relevant company [Huawei] to defend its legitimate rights according to law.
What does this mean for Huawei users?
Existing Huawei smartphone users will be able to update apps and push through security fixes, as well as update Google Play services.
But when Google launches the next version of Android later this year, it may not be available on Huawei devices.
Future Huawei devices may no longer have apps such as YouTube and Maps.
Huawei can still use the version of the Android operating system available through an open source licence.
Ben Wood, from the CCS Insight consultancy, said the move by Google would have “big implications for Huawei’s consumer business”.
What can Huawei do about this?
Last Wednesday, the Trump administration added Huawei to its “entity list”, which bans the company from acquiring technology from US firms without government approval.
US chipmakers including Intel, Qualcomm and Broadcom are also reported to have told their workers they will stop supplying Huawei, according to Bloomberg.
Rosenblatt Securities analyst Ryan Koontz said Huawei would be “seriously crippled” if it did not have these “key US components”, although the Chinese firm is believed to have stockpiles in place.
In his first comments since the firm was placed on the list, Huawei chief executive Ren Zhengfei told Japanese media on Saturday: “We have already been preparing for this.”
He said the firm, which buys about $67bn (£52.6bn) worth of components each year according to the Nikkei business newspaper, would push ahead with developing its own parts.
Huawei faces a growing backlash from Western countries, led by the US, over possible risks posed by using its products in next-generation 5G mobile networks.
Several countries have raised concerns that Huawei equipment could be used by China for surveillance, allegations the company has vehemently denied.
Huawei has said its work does not pose any threats and that it is independent from the Chinese government.
However, some countries have blocked telecoms companies from using Huawei products in 5G mobile networks.
So far the UK has held back from any formal ban.
“Huawei has been working hard on developing its own App Gallery and other software assets in a similar manner to its work on chipset solutions. There is little doubt these efforts are part of its desire to control its own destiny,” said Mr Wood.
Short-term damage for Huawei?
In the short term, this could be very damaging for Huawei in the West.
Smartphone shoppers would not want an Android phone that lacked access to Google’s Play Store, its virtual assistant or security updates, assuming these are among the services that would be pulled.
In the longer term, though, this might give smartphone vendors in general a reason to seriously consider the need for a viable alternative to Google’s operating system, particularly at a time that the search giant is trying to push its own Pixel brand at their expense.
As far as Huawei is concerned, it appears to have prepared for the eventuality of being cut off from American know-how.
Its smartphones are already powered by its own proprietary processors, and earlier this year its consumer devices chief told German newspaper Die Welt that “we have prepared our own operating systems – that’s our plan B”.
Even so, this move could knock its ambition to overtake Samsung and become the bestselling smartphone brand in 2020 seriously off course.
What about the US-China trade war?
The latest move against Huawei marks an escalation in tensions between the firm and the US.
The company is facing almost two dozen criminal charges filed by US authorities. Washington is also seeking the extradition of Huawei executive Meng Wangzou from Canada, where she was arrested in December at the behest of American officials.
It comes as trade tensions between the US and China also appear to be rising.
The world’s two largest economies have been locked in a bruising trade battle for the past year that has seen tariffs imposed on billions of dollars worth of one another’s goods.
Earlier this month, Washington more than doubled tariffs on $200bn of Chinese goods, prompting Beijing to retaliate with its own tariff hikes on US products.
The move surprised some – and rattled global markets – as the situation had seemed to be nearing a conclusion.
The US-China trade war has weighed on the global economy over the past year and created uncertainty for businesses and consumers.Courtesy:BBC