Huawei is preparing for life without Google, Microsoft

Huawei is an electronics powerhouse that has partnered with Google and Microsoft to help increase its global business. But the Chinese company must now face the prospect of a future without its US partners.

Microsoft removed Huawei laptops from its online store on Friday, marking the latest move against Huawei after being blacklisted on May 15 by the US Department of Commerce over security issues. A Microsoft spokesman refused to comment.

"I think Huawei's removal from the Microsoft store creates the future where Huawei, already kicked out of the United States in phones, is spreading to the very high quality PCs," said Moor Moore's Main Analyst Patrick Moorhead. Huawei's existing business requires it to "rely on US companies in the short and medium term," he added.

The company also relies on several US semiconductor companies, including Qualcomm, Intel, Nvidia and Lattice, along with British-American chip maker ARM, to supply parts to build their smartphones and laptops. Some of these chip makers have apparently stopped delivering Huawei, but none of them have confirmed it.

"It will take a decade for China to replace these capabilities," says Moorhead.

Google briefly shrank Huawei's Android license on Sunday, but recovered it on Tuesday after the Trump administration issued a temporary order to allow operations to continue for existing Huawei mobile users.

Without the license, Huawei would not be able to sell smartphones with Google's services, including Maps, Gmail, and Google Assistant, and essentially force the company to come up with its own backup plan or risk losing market share. Huawei laptops use Microsoft Windows, but Microsoft has not commented on whether it plans to withdraw Huawei's license to use Windows on future products.

Huawei takes no chances. The company was only given a trademark for an internal operating system from China's National Intellectual Property Administration.

A Huawei spokesman told the Fortune operating system is a "Plan B" and "very recent resort."

"Our preference is to use Microsoft and Google, but we have a" Plan B " that could be dealt as soon as Q1[ads1] or Q2 of 2020, the spokesman said.

The operating system would be similar to what Huawei customers in the Chinese market are already seeing, since Google services are banned by the country's censors, which will include Huawei's app gallery. along with popular Google services options.

However, there is some doubt as to whether Huawei, or anyone, can now effectively build an operating system to compete with the dominance and customer satisfaction of Android. Google's open source platform has a market share of 80%

Huawei sent 59.1 million smartphones in the first quarter of 2019, making it the second best selling smartphone maker globally, just after Samsung, according to research firm IDC. Econ sales have been stagnant, Huawei also reported a 50.3% growth this year.

Huawei's black list comes as the Trump administration is engaged in a growing trade war with China. Earlier this month, President Trump placed another $ 200 billion tariff line on Chinese goods. China retaliated with plans to raise tariffs as high as 35% on 5,000 products across a wide range of industries, including food, building materials and consumer goods.

Trump and President Xi Jinping in China have both suggested that they are ready for a long struggle, if necessary, without any plans to retire.

The spokesman at Huberti at the Potsdam Conference on National Cyber ​​Security on Thursday warned that his company's blacklisting "puts a dangerous precedent" for consumers and businesses.

"It goes against the values ​​of the international business, reduces the global supply chain and interferes with fair competition in the market," he says. "This can happen to any other industry and company in the future if we do not confront these issues jointly."

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