After 2 years of US ban, Huawei further speeds up self-rescue

Chinese tech giant Huawei is further stepping up what analysts call self-rescue efforts, as it unveiled a batch of new innovation plans to build its independent ecosystems on Monday, which marks the second anniversary of the US’ blacklisting – in what appears to be a show of resilience and defiance amid the lingering political crackdown.

At its ecosystem conference 2021 in Shenzhen, Huawei Rotating Chairman Eric Xu Zhijun said that the company will emphasize the upgrading of six self-developed digital technology ecosystems – Kunpeng, Ascend, HMS, HarmonyOS, Huawei Cloud and MDC (Mobile Data Center).

Such a direction was seen by analysts as a self-rescue measure after the telecom giant’s smartphone unit suffered from the US’ crackdown, under which crucial supply of chips for the company was banned.

The damage of the US’ two-year clampdown is severe and clear. Huawei shipped 13.5 million smartphones in China in the first quarter, a 50-percent decline from the prior year, while the four other top vendors (Vivo, Oppo, Xiaomi and Apple) experienced double-digit growth, according to figures from market research firm Canalys.

The US’ blacklisting of Huawei during the past two years left its smartphone business weaker than ever, but it hasn’t shocked the company to its core, Fu Liang, a Beijing-based telecom industry expert, told the Global Times on Monday.

“Smartphone devices are but a small part of Huawei,” Fu said. “Its core business has always been telecommunications and cloud services, and these will be crucial in Huawei’s self-rescue.”

Fu noted that the US is clearly trying to isolate Huawei from the rest of the world, as demonstrated by the rejection or indecision of some European countries on Huawei’s access to their markets.

In recent days, German lawmakers approved tougher 5G security legislation, that some speculated could bring Germany closer into line with other EU countries on the issue. Reuters cited sources saying that Telecom Italia may cancel a contract with Huawei for supplying equipment to build a local 5G network in Italy.

However, Fu said that given Huawei’s huge technological advantage in 5G, it is “inevitable” that those countries will eventually allow the Chinese firm to supply equipment and services.

Huawei also has a definitive advantage in terms of production capacity for 5G base stations, as well as global market share, Fu noted. The company has filed more than 3,100 patents for 5G technology.

“The large number of patents not only means that Huawei can charge royalties, but also means that large telecommunications companies, such as Ericsson and Qualcomm, will struggle to develop their own 5G-related businesses without Huawei’s technology. In this sense, Huawei is still indispensible,” Fu said.

To cope with political uncertainties or trade barriers, the Chinese technology company has decided to achieve self-reliance by developing core independent technical frameworks and ecosystems after being targeted by the US government.

The HarmonyOS operating system, which is designed to link all of the company’s Internet of Things devices, is in the global spotlight. According to Xu, Huawei plans to deploy HarmonyOS on at least 300 million devices by the end of this year, including around 200 million Huwwei devices.

On Friday, Chinese e-commerce giant JD.com launched an app compatible with the HarmonyOS on Huawei’s App Gallery. It is described as “entailing all services under HarmonyOS”, showing that the e-commerce giant has been successfully plugged into the Harmony ecosystem.

There are around 500 million Huawei smartphones in use globally, more than half of which are in the middle to higher end of the market. These will be gradually upgraded to adopt HarmonyOS, according to Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance.

But Xiang noted that the focus of HarmonyOS might gradually shift to home appliances and other devices – and away from smartphones – as Huawei’s smartphone chip supplies are still under the cutthroat ban by the US government.

“The future of HarmonyOS lies in its application in smart households and gadgets like smart watches,” Xiang said. “In 2020, Huawei became the second-largest company in China’s smart home systems market.”

Huawei has secured more than 50 million users for its ecosystem globally through cooperation with more than 600 global home appliance brands, according to media reports.

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