Analysis: Huawei badly needs the Chinese government, tech rivals to back its OS plans
Google’s partial ban of Huawei from its Android operating system has the latter scrambling to develop its own, but its success lies heavily on getting Chinese tech giants like Tencent, with its WeChat messenging service, on board, say analysts.
SINGAPORE: Much has been said about Huawei’s purported plans to develop its own mobile operating system (OS), even as it is set to get partially shut out of Google’s Android OS.
However, analysts told CNA on Tuesday (May 21) that short of a nationalistic wave of support from the Chinese government as well as local tech giants like Tencent, Alibaba and Baidu, Huawei’s efforts to create an alternative outside the iOS-Android market duopoly now is unlikely to get off the ground.
On Sunday, it was reported that Google is suspending business with Huawei that requires the transfer of hardware, software and technical services except those publicly available through open source licensing. This means that the company’s future mobile devices would lose access to popular, and some say essential, apps such as Search, Gmail, YouTube and Maps.
Since then, the US government eased some restrictions for 90 days, such as allowing the Chinese IT giant to purchase US-made goods in order to maintain existing networks and provide software updates to existing handsets.
Huawei founder Ren Zhengfei remains defiant and confident about the company’s long-term prospects.
In interviews with Chinese state media on Tuesday, he dismissed the impact of the US reprieve on its plans, and revealed that it is in discussions with Google on how to respond to the ban. He was also bullish over its 5G technology, saying others won’t be able to catch up for another “two or three years”.
Regardless, Huawei is reported to have moved ahead with plans to come up with an alternative to Android. In fact, the South China Morning Post (SCMP) reported last April that Huawei started building its backup OS after a US investigation into the company and fellow China networking company ZTE in 2012.
It later pitched to app developers in 2018 to create software for this yet-to-be-disclosed platform, promising a quid pro quo arrangement to extend access in Europe in exchange for increased reach in China, according to Bloomberg.
CNA has asked Huawei for more information about its platform ambitions.
OPERATING SYSTEMS MEANINGLESS WITHOUT APPS: ANALYST
This wooing of app developers, said analysts, was considered more critical for Huawei’s long-term business prospects than the development of an alternative mobile OS.
Ecosystm’s principal advisor Tim Sheedy told CNA in an email that operating systems are meaningless without an app ecosystem, as can be seen by the examples of Blackberry, Microsoft and browser maker Firefox.
Blackberry, for example, used to offer app developers “thousands of dollars” to write apps for its mobile operating system, while Microsoft did the same for apps on its Windows Phone system.
“While (Microsoft) had some success to start with, adoption of Windows Phone was limited and the number of users dropped,” Mr Sheedy pointed out. “Consequently, app developers stopped releasing updates, making the Windows Phone versions of applications out of date and far behind their iOS and Android counterparts.”
Similarly, IDC’s vice president for Devices Research Bryan Ma said in a phone interview that Huawei’s alternative OS plan is “not going to be very successful”.
He said Google is not going to port its services like Maps and video streaming site YouTube to another platform, and these are “crucial” for devices that hope to be successful outside of China. Not having these services would “dramatically reduce” the appeal of mobile devices, he added.
He pointed to Windows Phone OS and Linux-based MeeGo OS as examples of platforms that did not have Google services, and did not last long in the market.
Gartner’s research director CK Lu concurred, saying that while he believes Huawei is “totally capable” of building its own OS, it will be hard for it to move away from the Android ecosystem.
JINGOISM THE KEY?
Yet, in the face of an unfavourable trade and regulatory climate, Huawei’s best hope for respite could lie in a tit-for-tat move by the Chinese government, according to the analysts. It would also be hoping for a nationalistic tide to sweep over its local tech counterparts like Tencent to ensure its alternative OS plans will not be short-lived.
Ecosystm’s Mr Sheedy said the only opportunity for a third OS will be a Chinese-based OS - one designed for the Chinese market by the Chinese manufacturers – that might point to a China-versus-the-world split in the future, at least in the mobile space.
He said this could potentially succeed because of the closed nature of the Internet and applications in the country.
“The typical Chinese smartphone user does not use most of the same apps that the typical US, European or Southeast Asian user (would),” the analyst said. “They have different apps for messaging, payments, e -commerce and social media.”
However, the only way it could work would be to get all the Chinese app developers on board and ensure that the new OS has at least 90 per cent of the apps that users have today on Android or iOS, he qualified.
“This strategy would restrict Huawei to selling only to the Chinese market - but it is a big market, which might grow bigger if the China government responds with its own ban to US firms operating in China,” Mr Sheedy said, adding that a market for the third OS is “just too hard to capture” without reciprocal trade bans on American manufacturers.
IDC’s Mr Ma will not discount the possibility of the abovementioned scenario, but he said that for this to happen, it would be critical for Huawei to get Tencent, with its super-app ecosystem of services such as WeChat, and its ilk on to its platform. To the analyst, Tencent is for Chinese consumers what Google is for the rest of the world.
“The issue is not with the third OS,” Mr Ma said. “It comes down to Google services … and it’s easier said than done to create alternatives (to apps like YouTube, Maps and Search). The barriers to entry are very high, and these services are difficult to displace.”
Ultimately, the Google Android replacement conundrum is just one facet of the Rubik’s Cube that Huawei has to figure out.
It continues to face the threat of being shut off from critical components like chips from the likes of Intel and Qualcomm, which power its laptops and mobile devices. The Chinese company’s network equipment business will also suffer the loss of certain international markets, Mr Sheedy said.
He added: “The ban on US firms selling to Huawei is nothing short of an existential threat to Huawei's existence as a device manufacturer.”