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Wednesday, 05 February 2020 11:41

Washington's Huawei moves will have a big impact, unlike what people claim

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Washington's Huawei moves will have a big impact, unlike what people claim Image by Clker-Free-Vector-Images from Pixabay

The Chinese telecommunications equipment vendor Huawei Technologies may derive less than 1% of its revenue from the US, but Washington's ban on its involvement in 5G networks will have a much wider impact than within American borders itself.

The analytics firm GlobalData appeared to downplay the effect that the US moves against Huawei would have in a report issued on Tuesday.

For example, GlobalData said Huawei's revenue increased, mainly due to sales in China, after the US placed it on its Entity Black List last year, preventing it from using any American components in its devices. While this is true, it is also a fact that competition within China, from the many brands there, is rising and one cannot reasonably expect Huawei's share of the market to keep increasing as it has.

Brands like OPPO, vivo, Xiaomi, and realme are making big strides there, while Apple has also taken steps to regain market share by cutting prices.

While Huawei has largely overcome the problem of parts — by buying some parts from American firms that make them outside the US and by using its own parts in other cases — the main effect of blacklisting is that it blocks Huawei from using Google's proprietary Android apps for its smartphones.

There is no need for these apps within China itself, but the Google apps — Gmail, Maps and the Play Store — are what Android users in other countries look for. And without them, nobody, apart from tech-types who can sideload these apps on their own from non-official sources, will buy Huawei smartphones.

As well-known reviewer mkhbd pointed out in a review of the Huawei Mate 30 Pro, it is "the best phone that you shouldn't buy" due to the absence of the Google apps.

GlobalData also failed to mention that the Americans plan to list both Huawei and fellow Chinese firm ZTE Corporation as national security risks, meaning that neither company would be able to trade in the US at all.

While many sanctions that Washington applies are domestic laws, the US has been able to muscle other countries into imposing the same restrictions by virtue of its political and military clout.

For example, in many cases the US applies sanctions on countries for exporting American goods to countries on a blacklist – and these sanctions are applied even when the exports take place from geographical locations outside the US.

GlobalData also mentioned that Huawei would be spending a lot on cyber security in a bid to counter the narrative spread by the US. But the fact is cyber security has nothing to do with the US campaign. Rather, these moves have been made solely to keep China from overtaking the US in the field of telecommunications and not because of any security lapses. The US wants to stay number one and will use any means to prevent others from passing it.

Additionally, while the UK has allowed Huawei to supply up to 35% of equipment for non-core parts of its 5G networks, this does not mean that the rest of Europe will follow suit. Many European countries will be muscled into doing what Washington wants by one means or another.

Any analysis that does not take these facts into account would not be providing a comprehensive picture.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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