Snippet: Huawei Technologies Co. has inspired Western government suspicion for at least a dozen years. Recent events came as a shock to many consumers, but they continue a trajectory of investigations, abandoned partnerships, and outright bans.

Huawei Technologies Co. has inspired Western government suspicion for at least a dozen years. Recent events came as a shock to many consumers, but they continue a trajectory of investigations, abandoned partnerships, and outright bans. Add a protectionist US president with a brash approach to negotiation, and bada bing! So far, so inevitable.

What’s a lot less clear now is how this story will end for the Chinese tech giant and the hundreds of millions of consumers around the world with Huawei handsets. Trade war or trade deal, this is an early tussle in a superpower struggle that history suggests will be long and volatile. The US Department of Commerce action could be over next month, or cause headaches for years to come.

What we know so far

Here’s what we know or surmise right now, based on current information:

  • Sold and stocked Huawei mobile devices will continue operating normally, even if US sanctions remain in place after the present 90-day exception period ending 19 August. Their owners should be able install apps or update them as they usually do because their devices have been compatibility test suite and vendor test suite certified. This means Google does not need to involve Huawei when updating its products on these devices or authorizing downloads from Google Play. It deals directly with the user.
  • Newly manufactured devices will, on the other hand, not be certified, so they won’t have access to Google’s app store, apps like Gmail, Google Maps, and YouTube, nor Google Mobile Services, which pushes operating system and app updates and enhancements to devices, but also contributes push notifications functionality to third-party apps like Twitter.
  • Google’s security patches will also no longer be shared with Huawei, which will have to wait until they are fed into the freely available Android Open Source Project (AOSP), which has about a month’s lead time. This gap in protection from a known vulnerability would affect both existing and future devices.
  • There are several Google tests, such as SafetyNet, used to check Android devices’ integrity. Devices that cannot be checked in this way, or that fail these tests, won’t be compatibility test suite certified, and will be flagged as rooted to companies, like banks, that have special reasons to check for security vulnerabilities. Users will also lose the benefits of Google’s extensive scanning of apps for malware.

The Huawei story’s impact is global, with consequences for all kinds of organizations, but it will be felt strongest by businesses in countries where Huawei has a large mobile handset market share.

Creation myth?

If cut off from Google permanently, Huawei will either have to abandon its plans for global mobile domination or go to Plan B: hosting an app store on its own operating system.

Inside the People’s Republic of China, Android phones are not sold with Google services, which are in fact made exceptionally difficult to install. Devices are bundled with the manufacturer’s own version of Android, and use a first-party app store or service from Qihoo 360 or Tencent. Huawei is no exception there, and its app store, AppGallery, is even bundled with its exported phones these days.

What it lacks is a working operating system with a chance of taking on Google in international markets. It has been working on one for years, and development has apparently been fast-tracked, if not without hitches. Based on the freely available code that comprises the AOSP, the OS is codenamed “Hong Meng” after a character in an ancient Daoist text who stands for the potent, chaotic force from which the world was made. (As is typical of the rich word play in the work from which it is drawn, the words can also mean “silly goose”.)

Owners of Huawei phones will hear a lot about Hong Meng, or whatever its name ends up being, over the coming months. There are wildly divergent estimates of when it will be ready, ranging from early next year to never. A new operating system is a very tall order, with the commercial improbability of a Google-free app store arguably the biggest challenge for Huawei.

Huawei is probably, along with a lot of us, hoping for a swift, decisive resolution to this crisis. Its CEO is talking like someone who still has something to lose, diplomatically downplaying the chance of counter-sanctions on the likes of Apple, which he describes as his “teacher”.

Entersekt is closely tracking his statements, and those of other major stakeholders, and we would like to assure our customers that we’ll do everything we can to help mitigate negative effects on their users’ banking and payments experiences, should there be any.

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Mark van Dalsen

MARKETING COMMUNICATIONS MANAGER

Mark has been marketing fintech since the last century and remains smitten with the business and the art of building brands.

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