The Huawei Ban — How the Trade War is Hurting Tech

Last week, the U.S Government blacklisted Huawei from doing business with U.S. companies as a product of the escalating trade war with China. Huawei is a consumer electronics giant, most notably prevalent in the smartphone industry. It’s the fastest growing smartphone vendor, having already taken the title of second largest by market share from Apple and quickly closing in on the number one spot, occupied by Samsung. Huawei’s devices rely on U.S. companies for hardware (Qualcomm, Intel, Corning, etc.) as well as software (Android). The biggest headline to come from this ban, of course, is that Google, in compliance with the new executive order, has pulled their Android license from Huawei. After 90 days, Huawei phones will stuck with their current software version, unable to receive updates or interact with Google services.

What does this mean for Huawei? The hardware isn’t much of an issue; Huawei is fully capable of building its own parts despite the higher cost compared to buying components from the U.S.. Replacing Android, though, isn’t so easy. Assuming the ban continues, Huawei will have to move to their own operating system. Rather than being able to just tweak the existing OS, Huawei will need to take on the task of building an OS from the ground up. This in itself is not an impossible task, and it seems that Huawei has already developed a “Project Z” OS in anticipation of a falling out with the U.S. (source). Still, a completely new operating system can be a turnoff for consumers who are already used to the Android OS and will have to acclimate to a new interface.

Even more intimidating is the challenge of developing an entirely new ecosystem. Without Google’s support, Huawei’s phones will need to adopt a native app store, populated with native apps. Not only does this venture require getting users to buy into the new app store, but it will also entail persuading app developers and companies to build and publish their apps for the new Huawei app store.

So what are the implications of this for tech, and is the ban unreasonable? Huawei’s stance is clear:

And frankly, we’ve seen no evidence of Huawei phones posing a greater security threat compared to any other Android device. Rather, this ban is a result of the squabble with China, which partly aims to reduce our deficit and partly hopes to call out China for supposedly violating international trade rules with respect to IPs.

Ultimately, we’re trading innovation and technological advancement for national pride, an economic tug-of-war, and intellectual property discrepancies.

Even though Huawei’s presence in the U.S. is slight, it still competes with U.S. companies on a global scale. For tech, this means more competition and more incentive for manufacturers and developers to come up with cutting-edge technologies. We’ve seen this between Huawei, Samsung, and Apple — each year, a new gimmick appears on a flagship. Soon enough, every company is aiming to implement a better version of that feature on their own devices (think facial recognition, in-screen fingerprint readers, pop-up cameras, and foldable smartphones). In this way, ingenuity evolves.

So what happens when we eliminate competition? Corporations no longer feel the same pressure to develop products at such fast rates. Monopolies on consumer products strengthen and technology becomes complacent with staying still. When it comes to industry, competition is the key driver of innovation.

The goal of technology is to advance the quality of life. Devices contribute to societal good: they solve global issues, keep us safe, and allow us to communicate on a global scale. With better technology, humanity blossoms. Under what conditions, then, should we be okay with sacrificing this development? How much do we value technology’s ability to improve the well-being of individuals and societies?

In the case of the Huawei ban, it’s probable that technology won’t take a hit. Even though Huawei will effectively die outside of China, competitors will continue to vie for buyers within China. However, we have to look beyond the present and apply the implications of the ban to the future. If the blacklist is implemented at much larger scale, to what extent can such political actions obstruct the growth of tech and, in effect, the enhancement of quality of life? Keeping this question in mind when considering global affairs is imperative, since ultimately, we are the people who are affected.

The Huawei Ban — How the Trade War is Hurting Tech

Research & References of The Huawei Ban — How the Trade War is Hurting Tech|A&C Accounting And Tax Services
Source

Leave a Reply