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28 May 19

The Huawei Ban and what it means for you and your fleet

On 15 May 2019, the US White House issued Executive Order on Securing the Information and Communications Technology and Services Supply Chain. The White House administration called the order “agnostic” and neither the word “Huawei” nor the word “China” appear anywhere in the order. Nonetheless, the order has since become known as the “Huawei Ban” and there can be little doubt that this was the intention of the White House in making it.

The day after the order was made, the US Department of Commerce placed Huawei on the Entity List, a list that requires US companies to obtain approval before trading. The list includes the advice that applications have a “presumption of denial”.

The Impact

The move follows an August 2018 order. While the direct intention of the US government appears to have been preventing Huawei from participating in the rollout of 5G networks, it will also mean that Huawei, which uses Google’s Android system for its smartphone range, will be left high and dry for an operating system.

The 5G impacts will probably be most significant for Huawei, but the smartphone implications are greater for most individuals. The news is not disastrous for individuals that already own Huawei phones as they will continue to function, but access to Google Play, the online app store, will be unavailable and the phones will gradually lag behind as Google rolls out updates.

Huawei Response – No More Play with Google?

The New York Times has reported that the order was a “clear strike against Huawei” and in the days since the announcement, Huawei argued that the move “will only serve to limit the US to inferior yet more expensive alternatives”.

Huawei’s aggressive stance and the support of the Chinese government probably mean that neither of them is going to accept the US decision passively. Huawei has already made steps toward their own operating system and app store, but that path would mean that Huawei would need to succeed where so many others have failed. Microsoft’s Windows Phone, LG’s WebOS and Samsung’s Tizen all having folded in recent years.

Huawei already uses a Google-free version of Android in China and runs its own app store there, but the likelihood of this being successful outside the Great Firewall is low at best.

What about the 5G Rollout?

Apart from its home country of China, Huawei’s biggest successes to date have been in Europe and in emerging countries, especially in Asia. So, while US allies Japan and Australia have been quick to follow suit in removing Huawei from any considerations for 5G rollout, Europe in particular, has been slower to act decisively, and for good reason.

One of the more curious aspects of the upheaval is that the effect on the US is likely to be less than that for smaller countries, including small European countries. Huawei’s major competitors in 5G technology, Ericsson, Nokia and Samsung will now be focussing their efforts on markets where Huawei is effectively banned, and the result is that those smaller countries will hold less significance.

Automotive Impact

The first and most obvious impact for automotive will be the effect on drivers using Huawei smartphones. Huawei holds under 10% of global market share for smartphones but their coverage in Europe is much higher, sitting at just under 18%. That compares to a 2.5% share of the North American market, 4% in Japan and 6.4% in Australia.

For many fleet managers, this could potentially impact on rollout of technology with telematics and similar in-car technology increasingly being dependant on smartphone connectivity. A particular concern will be where driver safety systems are smartphone dependant.

5G Connectivity

The ban on Huawei will likely have impact on rollout schedules across many Asian and smaller European countries. Any delay in the rollout of the networks will, in turn, impact on vehicle automation and connectivity in the affected countries, slowing both development and rollout of new technologies.

For developers outside Japan and the USA, this is likely to spell trouble with many of the technologies awaiting the lower latency and high bandwidth available in 5G.

Wrapping Up

The executive order issued on 15 May has been scrutinised at length, both within the US and abroad, with impacts likely to be wide ranging. Even discounting the delays to 5G and the disruption to Huawei smartphone users, a more significant problem is perhaps the fact that the US is locking out the second largest economy in the world.

Recent years have seen Chinese producers contribute enormously to mobile technology and not just by blindly manufacturing on the orders of western designers. Chinese technicians have contributed to or even invented high-speed rail, mobile payment tech, bicycle sharing and e-commerce. China has also stated an aim to become an “innovation nation” by 2020.

Delays in technology advancement caused by the fracturing of global co-operation in this space will perhaps be the biggest impact of all.

Author: Shane Curran

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