Getting blacklisted by the US government seems to be very bad for business. The trade wars between China and the United States are also not doing the Chinese tech giant any favors. Huawei recently parted ways with one of its long-time business partners Arm Holdings. The British chip designer stated that its partnership with Huawei has concluded.
Many suppliers and tech companies are quickly cutting their connections to the Chinese tech giant. This is largely attributed to the Trump administration’s decision to leave Huawei blacklisted alongside many other Chinese companies.
Google also recently took action and currently does not let Huawei mobile phones to integrate official Android updates. Additionally, Huawei smart phone users will no longer be able to host Google Play mobile applications like Youtube and Gmail.
According to the Trump administration, Huawei could potentially undermine U.S. national security. After the decision was final, many US and UK businesses quickly decided to sever all ties to the Chinese company.
Getting blacklisted is not the end
Many experts point out that Huawei will be able to survive without any support from Google. That being said, the recent partnership severance with Arm Holdings is very big issue for the company. That’s because the open-source version of Android was built and designed with Arm chips taken into consideration.
If Huawei wants to survive without Google, the new chips must be built from the ground up. Of course, this is a very complicated technical process which will probably take years. The company’s smartphones and other devices will be in for a huge standstill.
The short term effects of Trump's tough sanctions on Huawei will be negative, the long term effect is Huawei and other Chinese companies will turn away from the American market.
Some facts to support:
51.6% of its revenue originates from China.
45% of employees are in R&D. pic.twitter.com/R83Ld5QkJO
— MANI ONFIRE (@manionfire) May 23, 2019
The US Commerce Department announced that despite Huawei being backlisted: Google will work with the Chinese tech giant for 3 more months. This 3-month waiver will allow Huawei to negotiate with Google and work around their plan B before the ban is official.
There are multiple long and short-term implications. At the beginning, mobile sales will drag. Inevitably, Huawei will turn away from the US and shift towards other suppliers.
While being blacklisted by the US government is by no means a death sentence, the company will have to spend a lot to stabilize. A complete revamp will probably be required, but this is not something which happens overnight.
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