Huawei stranded as Google suspends Android license

Late Friday, it emerged that Huawei was added to a U.S. trade blacklist, which blocks any American company from doing business with the China-based phone maker. Over the weekend, the consequences started to trickle out: Google was to revoke Huawei's Android license entirely.

Android is an open source operating system at its heart, but many of the bits that come together to make it worth using—from the Google app to the Play Store and Gmail—are released as a part of a license that manufacturers must agree to with the company. With the trade ban in place, Google suddenly wouldn't be able to service that license.

This is a Big Problem™ because it has broad consequences for consumers. Huawei, under such a ban, will lose access to all proprietary apps and services from Google, as well as Android updates—but so will consumers. Supposedly, existing devices will "continue to function" but that's a vague statement and hard promise to keep, given Google can't technically work with Huawei directly.

Future Huawei devices, like its planned foldable the "Mate X" would only be able to use the public version of Android (AOSP), which, for lack of better analysis, is junk on its own. 

What's worth keeping in mind, however, is Huawei already uses AOSP in its biggest market: China. In China, Google doesn't license its services, let alone the Play Store, so Huawei and others are forced to build out their own ecosystems. It won't hurt the company much in its home market, and it already has a number of custom apps it could distribute with a little bit of reworking to make the experience bearable. 

That isn't the point, however: Huawei has been making an enormous global push, with advertising in Europe almost everywhere, and a rapid rise in popularity over recent years. With the US' trade decision, customers that buy the high-end P20 or any other device may find themselves stranded, without updates.

The impact on Huawei doesn't end here, either. Intel, Qualcomm, Broadcom and other suppliers have also instructed employees to refuse access to software and hardware, in fear that they may breach the ban as well. That would mean Huawei finds itself stranded in the laptop and future phone hardware spaces as well—especially given Qualcomm's chipsets are arguably the only ones worth using.

Huawei is shipwrecked, caught in a global trade war that doesn't seem like it'll end well—and those in Europe, the Pacific and beyond, are caught in its wake as it loses that Android license. China is yet to make any significant strikes back, but as Huawei begins to struggle, what happens next is troubling. 

Apple, Samsung, and every other phonemaker—let alone laptops and beyond—in the world relies on Chinese manufacturing or assembly in some way. If China wanted to squeeze America, it could target the largest technology companies by constantly increasing tariffs on iPhones, laptops, and other high-end devices, which would surely reopen negotiations as those companies feel the burn and beg the administration for relief.

There's lots of rhetoric out there that if China started hurting manufacturing, U.S. based companies would try and move their production lines home—and that's probably true, if a little impossible to actually achieve. The manufacturing processes and complexities involved in making anything is so intricately tied to China that it would take years for companies to learn how to do it back home, let alone spin up factories and highly-skilled production lines. 

Hardware is hard for a reason. And China knows this—but it's played this close to its chest historically and has avoided using manufacturing as a pawn. But, Huawei is too big to fail, as the world's 7th largest tech company by revenue. It has such a global reach that it's really impossible to imagine China tolerating or sitting back and letting this play out as it did with ZTE, which came near bankruptcy after ending up on a similar list.

A tiny piece of hope appears to be found in a sudden change in policy in the US on Monday: it granted a temporary 90-day license through August, which would allow Huawei to continue to do business with US companies on existing products until then. But, after that, in lieu of a deal or a change in policy, it's very unlikely to get much better.

If the tech bubble was already near popping, Huawei, China and the US going to battle might be the thing that finally turns it into a crater. 

For more good reading: this great edition of The Margins, a newsletter I like, digs into how borders are defining the modern internet and what all this means in that context.

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