Huawei sketches its plan: SA users won’t be left in the lurch
Trump’s bluster has raised doubts over the release date of its Mate 30 Pro, but Huawei must be pleased at SA’s enthusiastic support
Zhao Likun, Huawei’s representative in SA, would like to assure South Africans that Huawei has a plan. Two months ago, the US government slapped the Chinese telecoms giant with a trade ban.
The US has since said it will ease the restrictions on Huawei at the request of its own tech firms. But for now, they remain in place.
Huawei is entering the final month of a three-month respite given it by Google’s parent company, Alphabet. Huawei uses Google’s Android as the operating system (OS) on all the handsets it makes, and that relationship is now under threat.
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Zhao, who is GM of Huawei SA, sat down with the FM at the company’s Woodmead offices to talk about its "Plan A".
Huawei has kept up negotiations with its US suppliers.
"We hope we can continue to use the whole Android system and the whole Google ecosystem. This is our first priority," says Zhao.
"At the same time we continue to make preparations for Plan B." This refers to the implementation of Huawei’s own OS, which it has been working on since 2012. Zhao says Huawei’s OS is in the works, but he maintains that sticking with Android is a better option.
That is a choice that Google itself agrees with. The Financial Times (FT) reported last month that Google is arguing against the US government severing ties with the Chinese firm.
The newspaper said Google had warned the administration of US President Donald Trump that it risked compromising US national security if it implemented export restrictions on Huawei.
According to one FT source, Google believes a Huawei OS could be a hybrid of the Android OS but with more bugs, which would make it easier to hack.
However, given that Huawei phones make up 14.6% of Android’s global market share, Google’s view may have more to do with the bottom line than with national security woes.
If Google were to lose Huawei users to an alternative OS, it would kiss goodbye to millions of customers.
For now, there is no official word about "Plan B". No-one will say how close Huawei is to achieving a viable Android competitor, but Richard Yu, head of Huawei’s consumer business, recently told CNBC that the international version of the system would not be ready before the first or second quarter of 2020.
Huawei now has a problem — how much longer can it hold out for a solution with Android before the ban affects production further?
The launch of its new premium line, the Mate 30 Pro series, was planned for September. But a decision about an OS may delay that, as well as its plans for the launch of other devices.
"For the new products, the OS system is the main issue. This includes the next Mate and Mate X," says Zhao.
The Mate X was Huawei’s interpretation of a folding phone. And since Samsung botched its version, the Mate X had the potential to steal the show.
Even though the Mate X was announced before the US ban was introduced, the phone now sits in limbo.
The South China Morning Post in Hong Kong reported last month that Foxconn, the Taiwanese electronics manufacturer that assembles most of the world’s mobile handsets, had stopped several Huawei production lines already.
The US ban doesn’t just affect phones that we know about. Huawei’s lead designers told the FM in Paris at the launch of the P30 series that they work on several phones at the same time, at least three years ahead of their planned release. Phones scheduled for release in 2020 have already had their designs signed, sealed and delivered with the Android OS hardwired into them.
This means the decisions of the US government are holding Huawei hostage.
Still, Zhao seems optimistic. The discussions Huawei is having with its US partners are going so well, he says, that the company hopes to launch the Mate X with Android Q, the latest Android system.
On the local front, the cheeriest news for Huawei is that despite Trump’s best efforts to bully other nations on the issue, SA has come out in support of the company.
"We have found that our sales have recovered. By the middle of this year, revenue in SA has increased 30% compared to last year," Zhao says.
He acknowledges that sales took a major knock when news of the trade ban broke.
SA’s network providers have also shown their support. Cell C, Vodacom and MTN even petitioned President Cyril Ramaphosa to side with Huawei, saying the impasse would land up hurting SA consumers.
Last week Ramaphosa surprised many in the industry with his frank comments.
"[The US government] have been unable to imagine what 5G can offer and now clearly they are jealous," Ramaphosa said at the SA digital economy summit in Johannesburg.
"They’re jealous that a Chinese company called Huawei has outstripped them. And because they’ve been outstripped, they must now punish that company and use it as a pawn in the fight they have with China."
Ramaphosa said "only this company Huawei" would be able to lead SA into the 5G era. "We have to say we support the company that is going to take our country, and indeed the world, to better technologies, and this is 5G. We cannot afford to have our own economy held back."
Those comments must have had Huawei executives rubbing their hands in glee.