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U.S. Huawei ban: A Pyrrhic victory spurring digital decolonisation

 

Pyrrhus of Epirus, a Hellenistic king best known for his self-destructive military campaigns, has been immortalised by the term ‘Pyrrhic victory’—a win so costly that it is actually a catastrophic defeat. His famous lament after such a battle victory, “Another such victory and we are undone,” captures the essence of a Pyrrhic victory and serves as a potent warning in today’s complex world of tech geopolitics. As we analyze the short-, medium- and long-term impact of American economic coercion against Huawei and China, more broadly, it’s worthwhile to consider whether this could turn into a Pyrrhic scenario – a short-term triumph that is actually a devastating long-term loss.

 

The U.S. ban on Huawei, announced in May 2019, marked a crucial pivot in the arena of tech geopolitics. This decision was made with a view to curbing the Chinese telecom giant’s escalating influence within the global Information and Communications Technology (ICT) industry. Undeniably, the move has had immediate and far-reaching impacts. However, in an environment as dynamic and resilient as the ICT sector, the ban didn’t merely constrain Huawei as originally intended. Instead, it has triggered a sequence of unexpected outcomes rippling across diverse fronts. These consequences, many of which are still unfolding, stretch beyond the company itself and bring into focus the broader global tech landscape.

 

In the aftermath of the U.S. ban, Huawei confronted immense challenges. The ban severed critical supply chain links and even raised questions about the company’s ability to survive. However, their 2022 financials demonstrate a remarkable turnaround, evidencing their resilience amidst these adversities. For example, revenues increased to 642 billion in 2021.

 

To overcome these challenges, Huawei embarked on strategic shifts that could redefine the global tech landscape. Not only did Huawei launch successful new business lines, such as autonomous vehicles and cloud computing, that are less susceptible to economic coercion, the company also developed an in-house replacement for Oracle’s ERP system. This showcases not only their formidable technical aptitude but also demonstrates their adaptability and readiness to tackle immense challenges in the rapidly evolving technological landscape.

 

Moreover, drawing from successful examples such as Amazon Web Services (AWS), Slack, and Google AdSense, Huawei’s in-house ERP system may emerge as a formidable competitor to Oracle. Much like AWS, which originated as Amazon’s internal infrastructure to manage and scale their online retail operations, Huawei’s ERP system could harness its experience in managing a complex, multinational technology business and bring that to market. This would cater to companies, governments and other entities looking for efficient, large-scale solutions borne from real-world usage.

 

However, the U.S. ban on Huawei triggered more than just an immediate crisis for the company and questions about the future of its key American technology partners; it ignited a chain reaction that has reverberated globally. Consider European telecom carriers, many of which heavily relied on Huawei’s competitively priced and technologically advanced equipment for their infrastructure, especially for 5G rollouts. According to Reuters, Vodafone has spent EUR200 million replacing Huawei equipment in its core network while BT has spent GBP500 million removing Huawei equipment from the UK and Deutsche Telekom spent EUR3 billion removing Huawei’s 5G antennas. French carriers have even sued the government over this. Bouygues Telecom said rip and replace would cost them roughly EUR82 million, and Altice France said it would cost them even more.The ban resulted in increased costs and delayed 5G implementation, creating a substantial upheaval in their strategic plans.

 

This ripple effect has not stopped at Europe’s doorstep. It’s also made waves in developing nations that relied on Huawei’s cost-effective solutions for their digital expansion. Now, they are left to scramble for alternatives, which may not only be more expensive but could also slow their digital transformation journeys.

 

Not surprisingly, the U.S. ban on Huawei unintentionally amplified the call for digital decolonization. By revealing the fragility of an over-reliance on the American technology stack, the ban has nudged countries to rethink their tech dependencies, thereby challenging the stranglehold of American tech powerhouses. For instance, India’s ‘Atmanirbhar Bharat’ (self-reliant India) initiative and Europe’s GAIA-X are fostering growth of domestic tech industries.

 

China, through its titan Huawei, is demonstrating robustness and adaptability, epitomized by their strides towards homegrown operating systems and semiconductor technologies. This progress suggests a reshaping of the global tech landscape, with new and traditional players striving for digital leadership.

 

In essence, the ban, while designed to constrain Huawei, has stirred a global shift towards digital decolonization. It’s not just a survival tale for Huawei; it’s a turning point signaling a potential rebalancing of global digital power.

 

While the U.S. ban aimed to constrain Huawei’s growth and influence, it seems to have inadvertently triggered a resilience that may culminate in a strategic upper hand for Huawei and, by extension, China’s tech industry. Much like King Pyrrhus, the U.S. might soon find that its ‘victory’ in curbing Huawei could come at a greater cost than anticipated. In the US, the government has allocated US$1.9 billion to replace Huawei telecommunications equipment in rural operators’ networks. Already though, applications for compensation of actual costs totalling up to US$5.6 billion have already been filed. The cost of removing Chinese equipment according to the Federal Communications Commission’s own assessment was estimated at US$5.3 billion, almost three times the budget Congress had set aside.

 

 

Rather than capitulating under pressure, Huawei is reforging itself in the heat of this crisis. Its drive to develop an in-house ERP system, a feat that few global companies have accomplished, is one such compelling signal of this resilience. This initiative, while meeting Huawei’s immediate need for a replacement to Oracle’s system, also harbors the potential to challenge Oracle’s market dominance if Huawei decides to commercialize its ERP solution, similar to the successes of AWS, Slack, and Google AdSense. Moreover, the backlash from the ban is no longer confined within the U.S.-China tech rivalry. It’s incited a global chain reaction, instigating hesitations about reliance on U.S. tech firms and inciting ambitions for digital self-reliance.

 

The U.S. stance on China does not necessarily reflect the views of American business. For example, Micron, a memory chip maker faces a significant loss of revenue and market share in China. Other U.S. firms, such as NVIDIA, are worried about losing access to the lucrative Chinese market, where they face increasing competition from local rivals. NVIDIA’s CEO Jensen Huang warned that the U.S. should be careful not to alienate China, which is a key market for the technology industry. He said: “If [China] can’t buy from the United States, they’ll just build it themselves.” Tesla’s CEO, Elon Musk, also demonstrated the significance of China for his company’s global strategy by visiting the country and meeting with top officials. These cases illustrate the complex and uncertain implications of the U.S.-China trade war for the tech sector.

 

In sum, while the U.S. may have initially appeared victorious with the Huawei ban, the long-term implications suggest a different narrative. This ‘victory’ might indeed be a Pyrrhic one, as the resultant strategic adaptations, global chain reactions, and the acceleration of digital decolonization may reshape the global tech landscape to the detriment of U.S. tech hegemony.

 

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Huawei’s US ban continues to be a terrible thing for consumers

OPINION: Four years after the US set Huawei in its sights with a flurry of sanctions, Huawei is still trying to maintain a smartphone offering devoid of Google services. The worst part is that the phones are pretty terrific, making the fact they’re difficult to recommend to the vast majority even more frustrating.

 

For those that have been living under a phoneless rock for the past few years, Huawei is in a bit of a geopolitical jam. The company was accused by then-President Trump of shady business practices with the Chinese government that led to it being added to something called the Entity List, essentially blocking Huawei from working with any business operating in the US.

 

That includes not only Qualcomm, the chipset maker of choice for a huge number of smartphones, but the likes of Intel and, most importantly, Google. This means that no Huawei phone from 2019 onwards can ship with Google services pre-installed, meaning no access to Google Play, Google-developed apps or any apps that rely on Google services in the backend.

 

This has forced Huawei to completely revamp its approach to smartphones with its open-source EMUI/HarmonyOS operating system based on the open-source version of Android, and it sports its own version of Google Play dubbed AppGallery.

 

It’s a great achievement, but four years on, it still lacks plenty of key apps used by Westerners, making it difficult to recommend to anyone but the most dedicated Huawei fans. That’s a pretty big shame as, even with the ban in place, Huawei continues to deliver some of the best smartphone technology around.

 

That really rang true earlier this week when I got my first chance to play with Huawei’s latest top-end foldable, the Mate X3. I’ve used a fair few foldables in my time – in fact, I’d like to think I’ve seen the vast majority of those in the Western market – but none quite surprised me like the Mate X3.

 

The book-style foldable is lightyears ahead of the competition with a form factor much thinner (5.3mm when unfolded) and lighter (239g) than the competition, a gapless close and one of the best hinge mechanisms so far. In a word, it’s exquisite.

 

The new “multi-dimensional hinge” is the result of years of R&D from Huawei, coming a long way from the crunchy hinge of its initial foldable, the Huawei Mate X. The Mate X3’s hinge is smooth with just the right level of resistance that makes it easy to unfold one-handed but not easy enough for it to come open on its own.

 

That hinge mechanism also allows for one of the most muted display creases I’ve seen yet, with very little hint that this is a foldable display when fully opened.

 

It also just feels nice in the hand, complete with a satin-like finish that perfectly rounds off the premium experience on offer.

 

Throw in capable cameras including a 50MP main, 13MP ultrawide and 12MP periscope, fast charging at 66W and a fairly large 4800mAh battery and you’ve potentially got the best foldable hardware around right now.

 

However, the fact that it doesn’t run Google Play services, doesn’t offer 5G connectivity nor the latest Snapdragon chipset – all as a direct result of the Entity List – it’s almost impossible to recommend to any but the most dedicated (and anti-Google) tech fans out there, especially with a £1,999 price tag.

 

It’s a similar story with the recently-announced flagship, the Huawei P60 Pro. As my colleague Max discovered when he went hands-on with the P60 Pro, the camera tech is truly next-level, sporting a 48MP main with a variable aperture that can shift between f/1.4 and f/4.0, a 48MP telephoto with 90mm zoom and a 13MP ultrawide capable of delivering impressive images like those taken on a sunset safari below.

 

With tech as impressive as this readily available, it’s so disappointing that most people won’t even consider using a phone that doesn’t offer access to Google Play and many popular Google-based apps that Westerners rely on for day-to-day use.

 

Ultimately, it’s the consumer that misses out, and we should be furious.

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Uploaded on May 30, 2023
Taken on May 30, 2023