If you think 2020 was a big year for Huawei and the fallout from its cyber tussle with the United States, 2021 could be even more of an unknown roller-coaster ride, writes analyst Zack Doffman at Forbes magazine.
And all eyes will be on the incoming US presidency of Joe Biden (barring a Trump coup attempt) to see what happens next.
Without question, Trump’s blacklisting of Huawei has opened a veritable Pandora’s Box which has altered the field of battle and left the main players scrambling.
Writes Doffman in a fresh analysis, the biggest threat to Huawei is no longer Apple or Samsung or Google (the so-called Big 3), it’s the other leading Chinese smartphone players who are waiting in the wings.
Doffman deftly points out that Xiaomi, Oppo and Vivo have embarked on “new Huawei” strategies, seeking to replicate the successful recipe of taking premium hardware at discounted pricing into key markets to beat the likes of Samsung and Apple.
None of those other Chinese smartphone makers have been hit by Huawei-style US sanctions, they retain access to Android outside China, says Doffman.
“Xiaomi and Oppo have each now secured around 13% of global shipments, both could outsell Apple in 2021, Xiaomi might even take a run at Samsung if its internal forecasts are to be believed.
“To complicate matters, Oppo is part of Chinese conglomerate BBK, which counts the Vivo, RealMe and OnePlus brands in its stable. Taking all these brands together — albeit they claim independence from one another, BBK will overtake Samsung with ease.”
And this is only the tip of the iceberg.
Other worldwide aspects of the Huawei fallout:
- According to a Swedish newspaper Dagens Nyheter, Ericsson CEO Borje Ekholm is pressuring his government to reverse the ban on Huawei and ZTE. Apparently he has threatened to pull out Ericsson from Sweden if they continue to ban the Chinese telecommunications giants from participating in the 5G rollout.
- Brazilian Vice President, Hamilton Mourão, has spoken in support for Huawei, sparking a controversy, GizmoChina reported. The official stated that the cost of 5G networking in the region will significantly rise if the Chinese tech giant is banned from providing its telecom equipment for the newer and faster bandwidth.
- According to Financial Times, the German cabinet has agreed to a new IT law that gives the authorities the power to block Huwaei from Germany’s 5G network on security grounds. But in contrast to other countries, it does not exclude the Chinese company outright from the German telecoms market. Instead, the law sets the bar higher with more stringent checks.
- Telecoms providers must stop installing Huawei equipment in the UK’s 5G mobile network from September, BBC News reported. Digital Secretary Oliver Dowden said he was pushing for the “complete removal of high-risk vendors” from 5G networks. The new deadline falls earlier than expected, although maintaining old equipment will still be allowed. Previously, BT’s EE division, Vodafone and Three UK would have had until 2027 to install any such equipment acquired before the end of this year.
- Canada is likely to become the next “Five Eyes” nation to ban Huawei 5G, a step which may come following the creeping monopoly by the Chinese firm in the 5G world that has sounded alarm bells for major world powers, ZeeNews India reported. The young and inexperienced Canadian leader, Justin Trudeau, will likely waffle on the issue, but will eventually bend to the CIA’s wishes.
Now that it has started the ball rolling, Doffman posed the question, should America bank the win on 5G and concede the non-threatening consumer gadgets, the phones, laptops, tablets and wearables?
Billionaire philanthropist Bill Gates made no bones about his take on the issue, NikkeiAsia reported.
The Microsoft founder decried the “paranoid” view fueling the current high-tech rivalry between the US and China, stating that trying to stop Beijing from developing innovative technologies is “beyond realistic.”
“Huawei, like all goods and services, should be subject to an objective test,” Gates said. “The rule that everything that comes from China is bad … that is one crazy approach to trying to take advantage of innovation.”
Nevertheless, Beijing’s strategy to challenge America’s tech dominance, to build a more independent ecosystem in China and to challenge US players across the world, has not changed one iota. If anything, it has escalated.
Says Doffman, the Chinese threat to the established mobile ecosystem is now very real and the west will need to counter China’s long game.
“The Huawei blacklist has changed the mobile landscape, and the west’s next moves are critical.”
America has bought time, removing several pieces off the chessboard, thinking they have altered the outcome of the game. But instead of game, set and match — the game has only become more challenging and the stakes have been upped.
Google, Apple and Samsung will undoubtedly face new competitive threats as a result of the fallout from US actions. How that will play out, is anybody’s guess.
Some analysts even think Samsung could benefit from the ban in the long term, as the two are direct competitors.
Without question, Huawei’s 5G business has been damaged in key export markets by the blacklist and it is difficult to say if the company can adapt and survive.
Currently it is building a new chipset factory in Shanghai to circumvent US restrictions. The plan is to start by building low-end 45nm chipsets, followed by more advanced 28nm in 2021, and 20nm chipsets in 2022.
Ironically, while attempting to “shut the 5G back door” in the west over “Five Eyes” cyber security concerns, they’ve left another door open that could hasten Chinese dominance.
In this respect, China would do well to follow the thinking of grand military strategist Napoleon Bonaparte, who once said, “Never interrupt your opponent when he is making a mistake.”