Business

Huawei exudes calm confidence as US ban hits home

2019-05-21 16:05

Huawei has found itself smack-bang in the middle of a trade war between the United States and China.

The Chinese telecommunications manufacturer, popular for its high-end smartphones at relatively affordable price points, has been banned from doing business with US companies, including Google – which provides Huawei with its Android operating system (OS).

So what does the ban mean for Huawei users in South Africa? Nothing to be concerned about ... for now, that is.

Huawei’s short statement after these developments took place said that it “will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally”.

Android said the same in a tweet:


Huawei, which relies heavily on Google for its OS and app store features, has already said that it anticipated this course of action from the Trump-led administration and has been working on developing its own OS for some time now. However, this will still take a while to roll out and in that time Huawei – which is the second most sold phone in South Africa – might have its market share decimated.

Read: It folds! But this smartphone will cost you R37 000

Analysts from Momentum Securities provided some analysis on the matter, stating that “should other countries follow the US’ decision to not use Huawei products in their networks (so far Australia, New Zealand and Japan have banned Huawei usage on their networks)”, this could leave Huawei vulnerable.

Google, albeit a major supplier to Huawei, is not the only US company that provides goods and services to the Chinese manufacturer. Intel and Qualcomm also provide chips for the devices and have said they won’t provide critical software and components to the company in accordance with the ban.

For now Huawei says it has a contingency plan should these companies also pull out, reportedly saying that it can develop “better” chipsets.

Huawei believes its 5G network is its trump card. Picture: Dado Ruvic/Reuters

Momentum says that this trade war won’t hit consumers too hard becauses there is still a bit of choice in the markets that Huawei plays in ... and one company in particular stands a chance to benefit immensely: American telecoms company Apple.

“The trade war is the base of this break up, and could allow Apple to regain some market share that was taken by Huawei and other flagship killers.”

With many already calling for the funeral pyres for Huawei to be built, the company itself is playing its cards close to its chest – releasing very limited information, and what it is releasing seems to have a tone of confidence attached to it.

Speaking to Chinese media, Huawei founder Ren Zhengfei said that US politicians have underestimated Huawei and that, even though it doesn’t make sense to ban Huawei, the company was prepared for any eventualities.

“We shall not narrow-mindedly exclude US chips. We shall grow together. But when there is a supply shortage, we have a backup,” Zhengfei was quoted as saying.

Huawei’s research and development in 5G also gives it a huge advantage, making it the industry leader, and Zhengfei made this clear.

“The most advanced field won’t be affected. At least 5G will definitely not be affected. Others won’t be able to catch up with us within the next two or three years.”

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July 21 2019