SINGAPORE: Google is blocking Huawei from some updates to the Android operating system, in a blow to the world’s second-biggest smartphone maker.
The move comes after US President Donald Trump signed an executive order barring US companies from using foreign telecoms equipment deemed a security risk.
Google on Monday (May 20) said: “We are complying with the order and reviewing the implications.”
HOW WILL THIS AFFECT HUAWEI USERS?
Users of existing Huawei devices will not be affected for now - they will still be able to update apps and access the Google Play Store.
"Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices," a Google spokesperson said, without providing further details.
However, when Google launches the next version of Android, it may not be available on Huawei devices.
It is also unclear what this means for future Huawei phones.
Due to the business ban, Google will have to stop activities with Huawei that involve direct transfer of hardware, software and technical services that are not publicly available.
This means Huawei will only be able to use the version of Android that’s available through the open source licence, known as Android Open Source Project (AOSP).
Popular Google apps such as Gmail, YouTube and the Chrome browser that are available through Google's Play Store will disappear from future Huawei handsets as those services are not covered by the open source licence and require a commercial agreement with Google.
WHAT’S THE IMPACT ON HUAWEI’S BUSINESS?
The impact is expected to be minimal in the Chinese market. Most Google mobile apps are banned in China, where alternatives are offered by domestic competitors such as Tencent and Baidu.
But the move will hugely damage the brand's appeal to consumers outside China.
Almost half of the 208 million phones Huawei shipped in 2018 went to outside mainland China, and Europe is the most important overseas market where its devices currently have 29 per cent market share, according to technology research firm IDC.
"Having those apps is critical for smartphone makers to stay competitive in regions like Europe," said Geoff Blaber, vice president of research, CCS Insight.
The business ban may also affect Huawei’s 5G plans.
“(It) may cause China to delay its 5G network build until the ban is lifted, having an impact on many global component suppliers," said Ryan Koontz, a Rosenblatt Securities analyst.
WHAT CAN HUAWEI DO?
To get around the Google ban, Huawei would ultimately have to build its own operating system, as Apple has for its iPhones. That cannot be done in a hurry.
Software developers might feel compelled to offer a Huawei-specific version of their apps. Or the Chinese manufacturer could start a new branch of the Android family based on the open source version available now.
But that will all take time.
ARE THERE RISKS FOR GOOGLE?
The widespread mobile usage of Maps, Gmail and Google's other services has helped the US company build a market-leading position with Android alongside its crushing dominance in desktop browsing.
But in cutting off Huawei, Google risks being deprived of the revenue-generating data of all those phone owners around the world.
And other Chinese smartphone makers, such as Xiaomi, Oppo and OnePlus, will be watching closely.
Should Huawei build its own system, it's conceivable that those companies might join it, in a bid to end their own vulnerability to future actions by the US government or companies.
HOW DID THE BAN COME ABOUT?
Huawei has been the target of an intense campaign by Washington, which has been trying to persuade allies not to allow China a role in building next-generation 5G mobile networks.
Huawei founder and CEO Ren Zhengfei’s army background and his company’s opaque culture have fueled suspicions in some countries that the firm has links with the Chinese military and intelligence services.
The United States believes Huawei’s smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.
"Chinese telecom companies like Huawei effectively serve as an intelligence-gathering arm of the Chinese Communist Party," Senator Tom Cotton from the US Republican party had said after Trump's emergency declaration last week.
WHAT’S BEEN HUAWEI’S RESPONSE?
Huawei said on Monday it would continue to provide security updates and services for its smartphones and tablets.
"We have made substantial contributions to the development and growth of Android around the world," a spokesman said.
"Huawei 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," he added, without touching on what would happen with phones it would sell in the future.
Huawei previously said that the company has already been preparing a contingency plan by developing its own technology in case it is blocked from using Android. Some of this technology is already being used in products sold in China, the company said.
"We have not done anything which violates the law," founder and CEO Ren told Japanese media on Saturday, adding the US measures would have a limited impact.
"It is expected that Huawei's growth may slow, but only slightly.”