Huawei crackdown could damage consumer confidence in Chinese brand – analyst
Robie de Guzman • May 21, 2019 • 1700
The lack of access to Google services on Huawei smartphones could result in a loss of consumer confidence outside of China, chief of research at CCS Insight Ben Wood said on Monday (May 20), after news emerged that Google would comply with a U.S. order barring the Chinese company from updates to its Android operating system.
Google suspended business with Huawei that requires the transfer of hardware, software, and technical services except those publicly available via open source licensing on Sunday (May 19), in a blow to the Chinese company the U.S. government has sought to blacklist around the world.
The suspension could hobble Huawei’s smartphone business outside of China as the tech giant will immediately lose access to updates to Google’s Android operating system.
“This is a bombshell because it affects the devices, where irrespective of the problems they have had so far, the phones have kept selling. Huawei needs this to be resolved really quickly to make sure it doesn’t lose all that great momentum that it has got in the marketplace” Wood said.
Future versions of Huawei smartphones that run on Android will also lose access to popular services, including the Google Play Store and Gmail and YouTube apps.
Holders of current Huawei smartphones with Google apps will continue to be able to use and download app updates provided by Google.
“It could face a loss of consumer confidence and that loss of confidence could also extend to the retailers and the operators who are stocking their phones as well. Huawei will be hoping there is a very quick resolution so there is some real clarity on what they can and can’t do going forward,” Wood said.
“Huawei phones are cheap, it is the newest technology that is coming out. America has unfairly tried to suppress Huawei so they can boost their own inferior products. I think it is total trade discrimination. It is the sort of thing Britain used to do in the 19th century,” said Jacob Secker, a British consumer.
“If I couldn’t use Google Maps anymore, for that reason I won’t buy Huawei,” said German Consumer named Florian
Huawei said it will support its smartphones and tablets by providing security updates and services but it did not say what would happen with phones it sells in the future. (REUTERS)
Toronto – The extradition trial of the chief financial officer of Chinese telecommunications giant Huawei kicked off on Monday in the western Canadian city of Vancouver.
Meng Wanzhou is being sought by the United States on charges that she committed bank fraud and violated US sanctions on Iran by misleading banks about the business Huawei allegedly carried out in that Middle Eastern country through a subsidiary called Skycom.
The proceedings at the Supreme Court of British Columbia began at 9 am local time and are being presided over by Judge Heather Holmes.
Attorneys for the 47-year-old Meng are expected to argue that the accusation she faces in the US does not constitute a crime in Canada because Ottawa removed sanctions on Iran in 2016.
If the court agrees, the legal concept of “double criminality” will prevent her from being extradited.
The trial is initially scheduled to last four days, but it could take much longer for there to be a definitive outcome.
Even if the British Columbia court rules in favor of extradition and that decision is upheld on appeal, the daughter of Huawei founder Ren Zhengfei could take the matter to Canada’s justice minister and attorney general, David Lametti, who has the power to deny an extradition if he deems it to be “unjust or oppressive.”
Meng’s case has sparked a diplomatic row between Canada and China.
The Huawei CFO was arrested by Canada at the request of the US on Dec. 1, 2018, in Vancouver, where she was making a stopover on a trip from Hong Kong to Mexico City.
In a multi-count indictment unsealed in January 2019, the US Department of Justice said the charges against Huawei, two Huawei affiliates (including Huawei USA and Skycom) and Meng “relate to a long-running scheme by Huawei, its CFO, and other employees to deceive numerous global financial institutions and the US government regarding Huawei’s business activities in Iran.”
“As alleged in the indictment, beginning in 2007, Huawei employees lied about Huawei’s relationship to a company in Iran called Skycom, falsely asserting it was not an affiliate of Huawei.”
After Meng’s arrest, China froze diplomatic and trade relations with Canada and accused that North American country of violating the human rights of one of its citizens.
Shortly after her arrest, Beijing also apprehended two Canadian citizens – former diplomat Michael Kovrig and businessman Michael Spavor – and continues to hold them on charges of endangering China’s national security.
Canada has launched an international diplomatic campaign aimed at securing the release of Kovrig and Spavor, further increasing tensions with Chinese authorities.
The Supreme Court of British Columbia released Meng on 10 million Canadian dollars ($7.6 million) in bail on Dec. 11, 2018.
Meng, who is assumed to be the heiress of a fortune valued in the billions of dollars, currently is living with her family in one of two mansions she owns in Vancouver.
Under her bail conditions, Meng must wear a GPS ankle bracelet and pay for her own 24/7 surveillance. EFE-EPA
Beijing, China – Survival will be the “first priority” for Huawei in 2020, the Chinese tech giant said on Tuesday after its sales projections were hit hard in the wake of a ban by the United States.
“Any risk that undermines our business continuity must be treated as a matter of life-and-death,” Huawei’s chairman Eric Xu said in his New Year message.
“We need to race against time and cast away all manner of unrealistic hope,” Xu said.
He said the company’s sales revenue saw an increase of 18 percent year-on-year in 2019 and is estimated to be at 850 billion yuan ($121.79 billion), much lower than its initial projections.
Xu asked his colleagues to take the US measures against the company as “a great opportunity for us to motivate ourselves and build up some muscle.”
Describing 2019 as “an extraordinary year,” Xu said: “Despite concerted efforts by the US government to keep us down, we’ve made it out the other side and continue to create value for our customers.”
He said Huawei would continue to be on the US entity list next year and warned that it would not grow as rapidly as in the first half of 2019.
“It’s going to be a difficult year for us. We will have nothing to rely on but the hard work of our people, as well as the ongoing trust and support of our customers and partners.”
In May, Washington had put Huawei on a business blacklist of firms amid alleged threats from the company’s 5G network on its national security.
However, American companies can continue doing business with the Chinese firm until February after US President Donald Trump allowed a new extension on Nov. 18.
Xu dismissed Washington’s security concerns and said compliance with all applicable laws and regulations had always been “the tone at the top and the foundation of our global operations”.
The telecom major has also faced snooping allegations from the US and some foreign countries over its close tie-up with the Chinese government.
Recently, The Wall Street Journal, in its report said that Huawei had received $75 billion in state support and was under special protection by the Chinese government.
Huawei denied having received the reported amount and said that Beijing gave them the same treatment as the rest of the private firms operating in the country.
“Strengthening cybersecurity and user privacy protection is at the absolute top of our agenda, and we will continue to adhere to all related laws and regulations in the markets where we operate,” Xu said. EFE-EPA
San Francisco – The US government announced on Monday a new 90-day extension to allow China’s Huawei Technologies Co. Ltd. to continue doing business with US firms as regulators in Washington continue to draft rules and regulations for telecommunications firms that are deemed to pose risks to national security.
The latest extension, which will expire in February 2020, is for the same 90-day period as the one announced in August, and this is the third time that Washington has postponed its decision to prohibit US firms from doing business with Huawei after the turmoil caused in the tech sector when the move was first announced in May.
Although Huawei’s market share for mobile telephones in the US is very small – less than 1 percent, according to the most recent figures compiled by Statcounter – the Chinese firm has a strong presence as a provider of telecom equipment in rural areas.
Its products, which are substantially cheaper than those of its competitors, have allowed the establishment of wide wireless networks in sparsely populated parts of the country, where – if not for Huawei – such networks would have been practically unsustainable from a cost perspective.
“The Temporary General License extension will allow carriers to continue to service customers in some of the most remote areas of the United States who would otherwise be left in the dark,” said Commerce Secretary Wilbur Ross in a statement.
“The Department will continue to rigorously monitor sensitive technology exports to ensure that our innovations are not harnessed by those who would threaten our national security,” he added.
Along with its presence in rural areas, the other key element in understanding Huawei’s effect on the economy are the providers of technological components and software, including chipmakers Intel, Xilinx and Broadcom, along with Internet giant Google, the owner of the Android operating system, which is installed on Huawei devices.
Of all the US providers to Huawei, Google is the one with the highest profile, given that the telephones the Chinese firm sells around the world (and which are especially popular in the Latin American and European markets) include Android pre-installed and services such as Chrome, Gmail, Google Maps, YouTube and the applications store Google Play.
The veto on Huawei business comes within the context of the trade war between the US and China, which has been under way almost since the time Donald Trump took office in January 2017 and which, so far, has included US tariffs on hundreds of millions of dollars of Chinese imports to the US and similar reprisals on certain US products by Beijing. EFE-EPA
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