Huawei has reiterated its warnings to the U.S. government and Google that the time is fast running out for a return to business as usual, that once the company launches an alternative operating system, there will be no turning back. The implications for the U.S., the company says, will be stark. If Huawei is forced to “resort to alternatives” to Google, CEO Ren Zhengfei told CNN, if a Plan B gains momentum, returning to previous versions of its OS and software will become less likely. And we know that any return would, at best, be in parallel with the newer alternatives. At issue is the loss of Google—the theme of the blacklist. Ren described this as “a critical moment for all of us,” suggesting “the U.S. government considers what's best for American companies.”
In an interview with CNN, released on November 26, Ren also warned Samsung and Apple that it still intends to capture the global top spot for smartphone shipments—despite the U.S. blacklist. “I don't think this will be a problem, but it will take time.”
Google is the one technology Huawei can’t “un-Americanize.” This has softened sales outside China, but, Huawei is now emphasizing, may hit Google harder in the long term. If Huawei is forced into a Plan B, the company and the U.S. more broadly risk losing their monopoly influence over key elements of worldwide technology standards. Six months after the blacklist hit, Huawei should have been reeling, that was the plan. But the company has been shored up by sales in China, where it has built a 42% market share. This has become the new theme of Huawei’s message platform—the blacklist isn’t working, and you will now pay the long-term price.
As I reported on November 22, Microsoft has now secured a U.S. Commerce Department license to renew its mass-market software supples to Huawei. There remains no word as to whether Google will receive the same, but Ren confirmed that the Google situation remains wait and see, with no decision one way or the other on its license. The lobbying continues and Google has not commented.
And so to the warning. Ren talks of a backup plan. What he means is significant investment in Huawei’s own mobile services to compete with Google’s—the Play Store, Maps, Gmail, Pay. And underpinning this, an ecosystem of app developers and service providers creating a third-way alternative to full-fat Android and iOS. Huawei has committed more than $1 billion to the incubation of this ecosystem, and importantly has signalled that it will offer price breaks to app developers—essentially asking for as little as half of the commissions taken by Google and Apple in their own stores.