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US Attitude to Maintain Its Monopoly in IT Field Is Short-Sighted


Source: Sputnik News    Published: 2019-6-12

Huawei launches its own operating system by autumn. Primarily, the new operating system called OAK OS will be used in Huawei smartphones. After the US Department of Commerce had blacklisted the company, Google said that Android OS would not be supported by new Huawei devices.

At the moment, the entire Huawei ecosystem is adapted for Android. US sanctions encourage the company to engage in in-house development.

As Global Times reports, back in May, Huawei registered the Hongmeng trademark in China; this is what the new OS will be called in the domestic market. In addition, the company filed an application to the European Union Intellectual Property Office (EUIPO) to register the OAK OS trademark. At the moment, the application is pending.

It became known that Huawei has been working on its own OS for computers and mobile devices at least since 2012 after the US Department of Commerce had decided to blacklist Huawei, and Google had announced termination of cooperation with the Chinese company. In particular, after the 90-day “grace period”, updates for the Android OS and Google services, such as Gmail, Google play, etc., won’t be available for new Huawei smartphones. Thus, the world’s second-largest smartphone supplier, that provided consumers with 206 million products in 2018, could face a serious drop in demand, especially in global markets, where Android and IOS users account for more than 90% [of the total number of users].

It’s not necessarily true that Huawei could have foreseen such a serious escalation of trade contradictions between the PRC and the US, but they still realised the danger of over-dependence on American technology. This is why, according to the South China morning post, 7 years ago, in a state of utmost secrecy, the company started working on its own OS in which billions of yuans have been invested. So the plan of the US authorities to destroy the Chinese telecommunications giant by simply blocking its access to American technology is unlikely to work out. Moreover, as FT reports citing anonymous sources, Google has appealed to the Trump administration to exclude Huawei from the blacklist. Google believes that Huawei’s isolation may pose a threat to US national security. The American company emphasises that the Chinese OS, which may be used in Huawei smartphones instead of Android, will be much less protected and more susceptible to hacker attacks, which means that user data security is at risk. In fact, as Zhou Rong, an expert from the Chongyang financial institute at the Chinese People’s University, said, Google has other motives as well.

“The Trump administration and the US Department of Commerce have added Huawei to the list of companies subjected to export control, and have banned Huawei from purchasing technology and components from American suppliers. Thus, the US hopes to maintain its monopoly in the IT field; but this attitude is absolutely short-sighted. First of all, even before Google, some White House officials had written to the US Congress calling for government entities to stop the ban on purchasing Huawei equipment. The reason behind this is quite simple – they were afraid that American companies wouldn’t be able to fulfil an order for replacing the equipment of the Chinese company, not to mention the fact that the price of their products would increase significantly. Replacing a technical product is a complex and expensive process that requires a number of complex procedures. In such circumstances, US companies that use Huawei equipment will incur significant financial costs. And this will affect the entire process of public procurement in the United States.

In addition, Chinese products are becoming increasingly innovative. The Google group has understood that even if they don’t supply Huawei with the necessary technologies, the Chinese company will be able to develop them independently. Today, some US high-tech companies can still control the degree of Huawei’s technological development. But if the Rubicon is crossed, the Chinese company will have no choice but to rely on itself. This will inspire the company’s qualified staff to fully realise their scientific and technical potential. And then the United States not only won’t be able to control Huawei, but also some American technologies may not be that advanced and Huawei can outrun them. So from Google’s point of view, letting Huawei float freely is an even greater risk. Finally, as some Americans believe, the more advanced Huawei’s own technologies become, the greater the technological threat to the US national security may be. Of course, this is a misconception, but it can be said that Google still has an impact on Huawei’s research and development. And if the Chinese company can develop its own technologies without any restrictions in the future, they will be able to create more advanced products. And, as they believe in the United States, this will represent a new and greater challenge to national security. In addition, Huawei provides efficiency for Google. For a long time the company has been providing Huawei with its products, it’s a big customer, and this, of course, has an impact on the results of Google itself.

In general, it can be said that there’re three reasons behind Google’s statement. Firstly, if Huawei is banned, American companies will incur big financial costs. Secondly, Huawei would be able to quickly overtake the United States in technological development, and it will be a greater threat to the technological hegemony of the United States. And thirdly, Google may not reach its target annual performance indicators. For the first little while, US sanctions against Huawei may damage the company. But we’ll continue exploring new markets. We will have new ideas.”

Since Huawei is a global company, it’s not so easy to oust it from the global market. A more likely scenario is losing a large customer in the face of Huawei and forcing the company to look for other suppliers. Recently, the online media The Bell reported citing two sources, that Russian businessman Grigory Berezkin, the owner of the Russian Aurora mobile OS developer, allegedly held talks with Huawei CEO Guo Ping about installing Russian OS on Huawei smartphones. Huawei refused to comment on this information. As noted by The Bell, the advantage of the Russian OS is that it’s based on the Linux kernel, while supporting Android apps.

Indeed, the OSs’ competitiveness is largely determined by their compatibility with applications. Attempts to break the duopoly of Android and IOS have been repeatedly made by Microsoft with its Windows OS, and Samsung with its Tizen OS. However, many Android and IOS apps didn’t work with these systems; and app developers refused to write separate codes for new OSs, whose market share at the entry stage was naturally negligible. Therefore, all these projects have not taken root – it turned out to be not convenient to use alternative OSs.

According to Zhou Rong, Huawei’s new OS may not be immediate success. Everything will depend on how convenient it is for users. And while it’s hard to doubt its success in China’s domestic market – of course, local developers will make their apps compatible with the new OS – Huawei will have to try hard to capture the global markets. But the Chinese technological giant will have a real chance to demonstrate its technological potential to the world and do what neither Microsoft nor Samsung managed to do.

Zhou Rong is a senior fellow from the Chongyang Institute for Financial Studies at Renmin University of China.

Key Words: China   US   Huawei   Zhou Rong  

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