The Mate 30 series launch vs the US-China trade war - what now for Huawei?

[Guest PaulOBrien]

On the 19th September, Huawei will launch the Mate 30 series of devices. In line with the companies 'tick-tock' release policy between the P series and the Mate series, we expect to see a new processor (the just launched Kirin 990) together with a doubling down on other key features - a great camera with a long zoom (rumours say that the sensor size will be significantly increased), lots of RAM (at least 8GB) and ROM (likely 256GB), an excellent OLED screen showcasing the latest 'waterfall' edge technology and as has become something of a Huawei signature, excellent battery life. As is customary, a number of new accessory announcements will also accompany the release, including an update to the Huawei Watch GT. The new phones will run Android 10... but of course, there's a problem. At the time of writing, Huawei remains on the US 'Entity List' with no exceptional licences issued, which means that American companies (including Google) are forbidden from doing business with the company in relation to new products. So what do Huawei do?

The platform problem

For all the talk of Android being 'Open Source', the reality is that this is a little bit of a fallacy in the majority of cases. While a bare bones version of Android is made available in the public AOSP ('Android Open Source Project') repository, this is only useful for situations where the core suite of Google software isn't required. For Amazon and their Fire devices or for handsets that will ship in China, this works. The 'missing bits' - Google Play Services, Play Store, Gmail / Photos / Drives etc. - are replaced by custom equivalents such as the Amazon Appstore or Huawei AppGallery. What about for devices that will ship in territories such as Europe where the 'Google bits' are considered essential? For these markets, there is an additional layer on top of AOSP which provides all the Google goodness. Manufacturers work closely with Google to integrate this layer and prior to release, they complete a strict certification process which deems the software build is ready. This happens not only at initial device release, but every time the software is updated. This close collaboration between a manufacturer and Google is absolutely vital and under the terms of the Entity List restrictions, can only be completed for devices that are already in the market to enable security updates and even then only for a limited period. The Mate 30 series is out of luck in this regard.

So what's Huawei's plan?

If it looks like Huawei is literally at the mercy of Donald Trump's whim, then that is probably a fair assessment right now. The status of the USA vs China trade war changes almost weekly and is certainly impossible to predict. With this in mind, I'm certain Huawei themselves don't actually know exactly what the situation will be when the launch event kicks off on the 19th. Press pre-briefs have been conspicuous by their absence and I am certain there are multiple contingency plans in place. So let's look at the possibilities.

Option 1. Ship with Google software as normal

If this is going to happen on Huawei's normal schedule (devices shipping pretty soon after announcement), then something needs to change fast. This could happen in a number of ways - Huawei could be removed from the entity list entirely (unlikely), Huawei's non-infrastructure parts could be removed from the entity list (possible) or the pending licences could be issued for Google and other companies to work with parts of Huawei (most likely). It's widely acknowledged that many US companies are lobbying the government to issue the licences because of the considerable financial impacts on US companies, but government policy is so scattergun that there's simply no way of knowing if this is going to happen. The issue would be easier to manage were the Huawei handset business to be split off from the infrastructure piece completely, which feels like a possibility in due course.

Option 2. Announce with Google software as normal with the device to be released 'at a later date'

This feels like the most likely option to me right now. The global launch event can go ahead as planned, the device can be released on schedule in China (no Google involvement required) and then 'once things are sorted out' then the global release can follow. 

But what if things don't get sorted out any time soon? What are the options? As long as Huawei needs to deal with Google as a US company, then their options are limited. But what if control of Android is no longer controlled by Google only? It's feasible that Google could transfer control of Android certification and licencing to a completely independent, non-US company that wouldn't be subject to the strict sanctions currently in place. Far fetched though this may seem, there have been discussions of this nature.

Option 3. Globally release the Mate 30 series running Android but without Google services

This option is also known as 'commercial suicide'. Consumers expect devices to have Google applications. Even if Google apps aren't pre-installed, there's no way that Huawei can provide a legitimate post-purchase option to get the apps onto devices, as the same restrictions that stop certification would stop Google (for example) putting their apps into the Huawei Appgallery. The same applies for every other US based app developer. The Huawei brand is already being damaged by the saga, but this approach would create a situation that I'm not sure even Huawei could come back from. I don't think this will happen. In a similar way to option 2, Google could find a way to allow the Play Store only to be licenced by a non-US company. One final option here would be for Huawei to work with a non-US, non Huawei owned app store provider, that Google also work with. For example, if a European company launched a new app store and allowed Huawei to pre-install it, and Google put their apps in it, that would be an option. 

Option 4. Globally release the Mate 30 running Harmony (Hongmeng) OS

Is Huawei ready to ditch Android altogether? I don't think so, although I think that they genuinely will be in the future. The biggest issue is the 'app-gap' - I am certain that Huawei could do a good job on the base OS and create compelling hardware and device pricing, but people need to go and get the apps they are used to when they buy a device (just ask Windows Phone!). This approach was already on Huawei's radar, but the latest problems have hugely accelerated development and massively increased investment.

Final thoughts

The 19th September is going to be fascinating and the Huawei PR teams are certainly going to have their work cut out. The sad thing in all of this is that US policy is likely going to stop those of us outside of the US from enjoying the latest devices from an Android market leader. It's clear to see in the phone market today that Huawei's presence and innovation has driven the market forward to the benefit of everyone.

I want that to continue and you should too. Let's hope things get sorted out soon.

 

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