Tech Cold War: What Will Happen With Huawei Now?

Designed by Apple in California. Assembled in China. A line which has adorned the back of iPhones for years sums up where technology has come to lately. Innovation in America alongside the low-cost Chinese manufacturing process to provide “affordable” quality products to the world.

China has also pursued its own tech ambitions and that has seen the rise of Huawei. Truly staggering growth has seen the company grow from a small manufacturer of telephone exchange switches to becoming a global leader in the tech industry. Earlier this year Huawei overtook Apple in the number of smartphones it was shipping worldwide. The most noticeable feature of the lineup being the camera technology which Huawei incorporates into the phone to produce really stunning shots.

Expanding sales from Huawei has come with political hostility in some parts of the world, most notably in the United States. No US carriers support Huawei, so while customers can get their hands on the phone, it is not as widely marketed. What started out as the US banning the use of Huawei equipment in communications networks spread like wildfire. Soon there were others falling suit – New Zealand, Australia and Japan. A lot of the focus recently is on the executive order from Donald Trump effectively banning Huawei from doing business with US companies. We will look at that but first lets take a little step back.

2018 Timeline
The significant start of problems can be traced back to January 2018 when Huawei CEO Richard Yu addressed the loss of AT&T support. Not long after, FBI Director Chris Wray warns against buying Huawei and ZTE phones before Huawei loses Best Buy as a retail partner. Wray told the Senate Intelligence Committee that Huawei and ZTE posed a threat to the US claiming that there was capacity for the companies to “exert pressure or control over telecommunications infrastructure, it provides the capacity to maliciously modify or steal information and provides the capacity to conduct undetected espionage”

In May 2018, the pentagon bans the sale of Huawei and ZTE phones on US military bases. In June, a report reveals that Facebook gave Huawei special access to user data. In July, Huawei crossed 100 million shipments on the year, however in the same month Australia announced that it would ban Huawei from 5G rollout amid safety concerns. The Australia ban comes after Australian intelligence agencies warn that the Chinese telecom may be forced to give data to its country’s government with an Australian government source being quoted as saying, “It is a Chinese company, and under Communist law they have to work for their intelligence agencies if requested.”

In September of 2018, Huawei and ZTE both get called out by the Senate in a hearing on Facebook and Twitter. Huawei then gets caught cheating on a phone benchmark test. Benchmark tests give us an idea of how a phone could perform in terms of speed. However the creators of the 3DMark benchmark test, Underwriters Laboratories (UL) accused Huawei of cheating on its tests, finding that the results of the benchmark changing dramatically. UL accused Huawei of using a hidden “performance mode” that overrides the devices usual performance to deliver artificial test scores and as a result they delisted the P20, P20 Pro, Nova 3 and Honor Play from their service.

December 2018, Britains BT says it will strip Huawei equipment from the 4G network by 2021 and won’t use it in 5G core. The move from BT is to fit its own internal policy. BT had avoided using Huawei equipment in its network cores which contains customer data and has been working with Huawei since 2005. One of the more significant escalations in the tech war follows a day after the BT announcement when Huawei CFO Meng Wanzhou is arrested in Canada at the request of the US.

A Reuters report indicates that Japan will stop buying Huawei and ZTE equipment with their concerns over hacking and intelligence leaks.

From this point we see a snowball effect up to the current day. Huawei exceeded 200 million smartphone shipments in December 2018 and the pressure really started growing in 2019 on the company.

January 2019
Senators introduce a bipartisan bill in the US which addresses the concerns about Chinese tech companies. Meanwhile, Huawei fights to stay in the US and brings laptops and tablets to CES. Despite the arrest of their CFO in December, inability to offer most devices in the US and repeated security warnings – Huawei hits the CES showroom floor with a defiant face with phones, laptops and tablets. The company uses CES to showcase updated models of the Matebook 13, and a tablet, the MediaPad M5 Lite.

However trouble still brews, right after CES takes place a Huawei employee in Poland is arrested over alleged spying. Polish authorities accuse the sales director and a former security agent of espionage on China’s behalf. Three days later, Huawei sacks their employee accused of espionage stating that his actions had no relation to the company.

Huawei claims that it will take the smartphone crown from Samsung in 2020, just one day later colleges in the US drop all Huawei equipment to appease the Trump administration. The US then hammers Huawei with 23 indictments for alleged trade secret theft and fraud.

February 2019
A report states that the FBI raided a Huawei lab and set up a CES sting. The report from Bloomberg said that the Chinese company had ordered samples of “Miraj Diamond Glass” from US startup Akhan Semiconductor in 2017 but returned the samples badly damaged. Suspecting Huawei of intellectual property theft, Akhan’s founder contacted the FBI which drafted him to take part in their Huawei investigations.

The US discourages European countries from using Huawei equipment in their 5G rollouts and the UK concludes shortly after that using Huawei in 5G is a managable risk going against the US concerns. The British government determines that the risk can be mitigated. Following the British government conclusions on Huawei and 5G rollout, Secretary of State Mike Pompeo says countries using Huawei tech pose a risk to the US.

Italian politicians start to push for a Huawei 5G ban in late February while the Mate X is revealed, the companies first foldable phone.

March 2019
Huawei starts March by calling for international cyber security standards before suing the US government over its equipment ban. The Chinese company says the lawsuit is a “last resort” where they claim that US Congress had failed to present “any evidence” for its ban on Huawei products and equipment and was thus “unconstitutional.”

In mid March, reports surface that Huawei is working on its own OS in case it can’t use Android or Windows. A company source tells German media that their plan B is their own operating system should they be banned from using Google or Windows. In late March, the P30 and P30 Pro are launched in Paris.

Tensions mount as British Watchdog warns that Huawei products represent “significantly increased risk” and Huawei then slams the US for having “a losers attitude” because its tech can’t compete.

April 2019
In late April, the CIA reportedly claims that Huawei is funded by Chinese state security. The CIA warns intelligence officials that Huawei receives funding from China’s National Security Commission, the People’s Libaration Army and a third branch of the Chinese state intelligence network.

Britain decides to allow limited access to Huawei to 5G infrastructure, a few days later Huawei pushes Britain to let Huawei be part of the 5G rollout. On April 30th, a report surfaces that Vodafone UK discovered hidden backdoors in Huawei equipment as far back as 2011. Vulnerabilities were found in routers and other equipment which could have given Huawei unauthorised access to Vodafone’s network in Italy. Both Vodafone and Huawei state that the vulnerabilities were addressed in 2011 and 2012.

Despite this, the outlet then reports that vulnerabilities remained after that and could be found in Vodafone’s UK, German, Spanish and Portuguese business but Vodafone carried on using the equipment as it was competitively priced.

May 2019
This brings us to May 2019. This month, we saw everything which has been building from 2018 come to a head. Countries drafted 5G security proposals as the US warns again of the Huawei threat. Shortly after it is revealed that 5G may be delayed in the UK over Huawei investigations.

On May 15th, Donald Trump signs a national security order which effectively bans Huawei from doing business with US companies. The Department of Commerce said the following in a statement: “The executive order prohibits transactions that involve information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary whenever the secretary of commerce determines that a transaction would pose a threat to national security,”

On May 19th, Google cuts off Huawei phones from from future Android updates. Google suspends business with Huawei with immediate effect and pulls their licence. This means that Huawei loses access to future updates as well as losing access to the Google suite and Google Play in future devices.

Just one day later a temporary reprieve for Huawei as the US Commerce Department issues a temporary licence to let Huawei keep existing network updates for a period of 90 days. The licence is provided to give companies time to sort out how to deal with restrictions going forward.

On May 22nd, chip designed Arm ditches Huawei and the Mate 20 X gets dropped from UK 5G launch. Arm is a UK company whose designs are the basis for most mobile world processors including those used by Apple, Samsung and until now, Huawei. Meanwhile the Mate 20 X 5G was meant to be the first 5G device to hit the UK market however Vodafone and EE announced they are pulling the device from their lineups. Both companies say they are awaiting more information before deciding on what to do regarding the Mate 20 X 5G.

May 24th, Huawei’s operating system may be called Hongmeng as the company has the name trademarked. However according to reports, the OS is far from ready. CNET claim that the understanding is that Huawei has no immediate plans to launch an OS and is looking at launching only if Android is permanently removed as an option for its smartphone customers. Elsewhere, Amazon Japan stops selling Huawei devices as phones, tables and PCs are pulled from the website.

May 25th, Huawei is dealt another blow as it is revealed that they cannot use microSD cards in its phones going forward. The Chinese company is banned from being a member of the SD Association meaning that Huawei is no longer permitted to put SD or microSD support in future products.

Where does this leave us now?

Honestly? We don’t really know. There are a lot of unknowns and a lot of unanswered questions. There is all kinds of speculation about how this will impact Huawei and indeed the United States. So first, lets talk about what we do know.

As things stand, Huawei is set to lose support from US companies in terms of business from the 19th August. Now, much of the focus has been on Google as Google has come right out of the gates and stated that they will pull the Huawei licence. However, we need to take into account the larger picture. This is going to affect every business based in America who works with Huawei and that can hurt them on a larger scale. So take for example, the current talk doing the rounds that if Huawei loses Google Play access, they will simply launch their own store.

However they can’t stock it with apps from companies based in the US, why? Because they are not permitted as it stands to do business with US companies. So they would not have access to apps like Twitter, Instagram, Facebook…any company based in the US.

I feel that inside the Chinese market, the company can and will continue to grow and in the Chinese market they can have strong results. The impact is going to be felt more in the western market because this is not just a US based “thing.”

Some people reached out to me on Instagram when I first started talking about Huawei and asked – “but isn’t this going to affect America only? Nothing changes for EU customers right?” – Wrong. This has a global impact, the misconception that this affects America only is being drawn because it is very much a feeling of a US v China trade war. However, Google pulling access for Huawei is a global thing, it affects every single customer using a Huawei device.

I recently bought a Huawei device, what should I do?

Really, you don’t need to to anything right now if you don’t want to. At least not until we get more information about where this is all going to lead to. I personally would like to see networks offering the ability for people to return and exchange devices based on the most recent information and unfolding events but realistically I don’t see that happening.

There is no need to rush out and try change device right now unless you really want to. At the moment, wait and see how it plays out.

I was thinking about buying a Huawei device, should I still go ahead?

To be frank, my personal opinion – No. I don’t see how people could recommend a Huawei device at the moment with everything that is going on. These products are expensive and I think the best options right now if you are in this boat is to wait and see what happens over the coming months or go with a different device.

Will this all get resolved and blow over?

Some fans of Huawei really believe that this is what is going to happen and we will all be laughing about it a year from now, “remember that time they were going to ban Huawei!?”

I wouldn’t rule it out, maybe not quite like that. However I do believe that Huawei is down but not necessarily our. Trump has said over the past day or so that a trade deal with China that has Huawei involved in some capacity could take place.

However, from what I have seen and heard so far, quite a bit of damage has been done to consumer confidence. I know of three people looking to ditch their new P30 Pros if they can and go with a difference device in light of what has happened. Just last week I sold a Pixel 3XL to a guy who said he was going to buy the P30 Pro but decided against it with everything going on in the news.

Naturally, customer confidence has taken a hit. Will it all blow over? Maybe not quite like that, I think what is more than likely to happen is that things will get worse for Huawei before if shows any signs of getting better. The US will by all intents want to try make the company weak and should they be brought into any kind of trade deal it would more than likely be one where the US ends up getting their way across the board.

It is a complex situation, constantly evolving and changing. Right now a tech cold war is brewing and the world is being forced to contemplate the consequences of a digital iron curtain.