The IT Nerd

We now have the first sign of trouble at Huawei because of the executive order that has effectively banned the company. Huawei has scrapped a product launch for the first time since the executive order was signed:

Richard Yu, CEO of Huawei’s consumer division, told CNBC that the firm had formally planned to launch a new product in its Matebook series without giving a date, but it had been indefinitely put on hold. He said that being on the U.S. Entity List, which restricts American companies from selling products to Huawei, had caused the cancellation. “We cannot supply the PC,” Yu said, adding that the situation is “unfortunate.” When asked if the laptop could be launched at a later date, Yu said it “depends on how long the Entity List will be there.” He acknowledged that, if Huawei is on the blacklist for a long time, the laptop will not be able to be launched.

You now have to wonder how many more products will face a similar fate. And how long Huawei can take hits like this before they finally tap out. I would suggest that you stay tuned as things are about to get interesting.

Huawei got some good news for a change. They’ve been tapped by Russian telco MTS to build its 5G network:

The agreement with Russia’s largest carrier, MTS, was signed on the sidelines of talks in Moscow between Chinese President Xi Jinping and Russian President Vladimir Putin.

It comes at a critical time for the Shenzhen-based company, which is now on the frontline in an escalating trade war between America and China. The United States is waging a campaign against Huawei, banning it from its own 5G networks and cutting it off from American software and components that it needs for its smartphones and network equipment business.

Washington has also been urging allies to restrict or ban the use of Huawei equipment in their 5G networks, warning that Beijing could use the sensitive data infrastructure for spying. Huawei has repeatedly denied that any of its products pose a national security risk.

It’s hardly surprising that Huawei is cutting a deal with Russia as both have a strained relationship with the US, the latter having been accused of meddling with the presidential election. The former being effectively banned by President Trump and being bad mouthed around the world by the US. It will be interesting to see how the US reacts to this deal.

Reuters is reporting that Facebook is the latest company to shun troubled Chinese phone maker Huawei like it has the plague:

Facebook Inc is no longer allowing pre-installation of its apps on Huawei phones, the latest blow for the Chinese tech giant as it struggles to keep its business afloat in the face of a U.S. ban on its purchase of American parts and software.

Customers who already have Huawei phones will still be able to use its apps and receive updates, Facebook told Reuters. But new Huawei phones will no longer be able to have Facebook, WhatsApp and Instagram apps pre-installed.

Although Facebook isn’t a huge loss for Huawei, it represents yet another obstacle in their attempt to keep their handset business alive as  is likely in very deep trouble because of the executive order that President Trump signed and the growing list of companies that won’t do business with them as a result of that. And you can fully expect other app makers to do the same thing as Facebook shortly.

Happy Friday Huawei!

Huawei has been banned from the IEEE or The Institute of Electrical and Electronics Engineers. Huawei employees can no longer submit papers to it or participate in peer-reviewing. And here’s what they said about that: 

IEEE complies with US government regulations which restrict the ability of the listed Huawei companies and their employees to participate in certain activities that are not generally open to the public. This includes certain aspects of the publication peer review and editorial process,

But it’s not a total ban:

However, all IEEE members, including those employed by Huawei, can continue to participate in individual membership, corporate membership and voting rights; subscribe to and access IEEE’s digital library and other publication products; submit technical papers for publication; participate in and present at IEEE-sponsored meetings and conferences, and may sponsor and accept an IEEE award,

So this may not affect the troubled Chinese tech company all that much. Maybe. We’ll have to see how much of an effect this does, or does not have.

I came across a very interesting story today that seems to show that consumer backlash against Huawei might be starting. In Britain, Huawei phones are being traded in at a record pace, and interest in Huawei phones has dropped. This trend apparently started when Trump and the US banned the company from doing business with the US:

Trade-in and price-tracking companies report a surge in U.K. consumers trading in devices from the Shenzhen-based manufacturer, while interest from buyers fizzles. The numbers show that concerns around the company have extended beyond trade talks and corporate procurement and turned into backlash at retail, where Huawei makes most of its sales.

The rush follows the decision by BT Group and Vodafone Group to pull the Huawei Mate 20 X phone from their launches of fifth-generation wireless products. The British carriers joined others from around the world, citing uncertainty after Huawei was cut off from U.S. companies by new trade restrictions and barred from receiving software support for the Android operating system from Alphabet Inc.’s Google.

So it seems that Huawei’s problems now extend beyond the Trump administration to rank and file consumers who are steering clear of the brand. That’s not good for Huawei because I remember that ZTE phones were very popular before Trump and company dropped the hammer on them. Now they might as well not exist. You have to assume that the same fate exists for Huawei. Which is not good for the troubles smartphone maker.

Things are going from bad to worse for Huawei as The Next Web is reporting that their products are gone from the Microsoft Online Store:

The Windows maker has stopped selling Huawei MateBook X Pro laptop in its online store in the wake of the US government’s blacklisting of the Chinese firm.

A listing for the laptop has vanished from the Microsoft Store, and searching for “Huawei” doesn’t return any results either.

So it seems that they have been punted because of the executive order that US President Donald Trump signed a couple weeks back. Microsoft hasn’t put out a statement on this. Not that I expect them to. For now they’re still on Amazon and physical Microsoft stores still have stock. But to be honest, I don’t expect that to last.

The bravado by Huawei that is on display today is kind of surprising. I say that because via a report from CNBC, Huawei’s mobile business chief executive Richard Yu said this:

“Today, Huawei, we are still committed to Microsoft Windows and Google Android. But if we cannot use that, Huawei will prepare the plan B to use our own OS,” Richard Yu, CEO of Huawei’s consumer business, told CNBC on Thursday.”

And:

“We don’t want to do this but we will forced to do that because of the U.S. government. I think the U.S., this kind of thing, will also not only be bad news for us, but also bad news for the U.S. companies because we support the U.S. business, so we will be forced to do this on our own,” Yu said. “We don’t want to do this but we have no other solution, no other choice.”

Here’s the problem with this statement. Actually problems:

• Microsoft has tried and failed gain any marketshare with any of their mobile OSes that they’ve released over the years. Such as Windows Phone, Windows, Mobile, and Windows CE.
• Nokia went up in flames trying to get people to pay attention their Symbian OS.
• Even Samsung couldn’t get anyone to care about Tizen. Now it runs smart TVs. Not that anyone cares.

The fact is that we live in a world where you’re on Team Android or Team iOS if you have a smartphone. Not to mention that most desktops and laptops run Windows with some Macs and Linux boxes tossed in the mix for fun. And whatever Huawei has as a “plan b” would have to be incredibly compelling to get people to switch away from any of those. The thing is, it could be the best OS in the history of the universe and people won’t switch. This is assuming that it even exists of course. Thus I think this is really posturing and bravado rather than a legitimate path forward for the troubled company.

The BBC is reporting that chipmaker ARM has cut off Huawei from access to their tech:

ARM instructed employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to comply with a recent US trade clampdown.

ARM’s designs form the basis of most mobile device processors worldwide.

In a company memo, it said its designs contained “US origin technology”.

As a consequence, it believes it is affected by the Trump administration’s ban.

This is a huge hit to Huawei because ARM designs form the backbone of most modern smartphone processors. Apple processors for example are based on ARM designs. So I can’t see how Huawei moves forward without ARM being in the mix. Huawei has already said that this is a non-issue for them. But I don’t buy that and neither does anyone else. At some point all these companies who are cutting ties with Huawei will eventually cause the company to tap out and cry uncle. The question is how long will that take?

A new report from Reuters is saying that the U.S. Commerce Department will allow Huawei to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets. The temporary license lasts until August 19 and comes after an executive order that effectively bans Huawei from the US. But Huawei says that this doesn’t mean a lot:

Huawei founder Ren Zhengfei on Tuesday told Chinese state media that the reprieve bore little meaning for the company as it had been making preparations for such a scenario.

“The U.S. government’s actions at the moment underestimate our capabilities,” Ren said in an interview with CCTV, according to a transcript published by the Chinese state broadcaster.

So two things that pop to mind. First, one has to wonder what Huawei had to say about this is entrenched in fact rather than bravado. Second, I wonder if the US government got some severe blowback by banning this company? Or did this ban have unintended effects that they did not see coming? I guess we’ll get the answer to both those questions soon enough.

Late last night I reported that Hwawei was cut off by Google because of the executive order signed by US President Donald Trump last week. Now Huawei has come out with a statement saying that security updates for their Android phones are still coming:

Huawei said on Monday it would support its smartphones and tablets by providing security updates and services, after the ban by Google, owned by Alphabet Inc.

But the firm did not say what would happen with phones it sells in the future, which are unlikely to have access to Google’s popular services, including Gmail, YouTube and maps unless a special licence is obtained.

So that’s great for everyone who just bought a P30 Pro. But it doesn’t give one much of an incentive to buy anything from the company in the future. Assuming that they can sell anything in the future because it now seems that other companies are cutting Huawei off:

Apple Face ID parts supplier Lumentum Holdings Inc followed Google on Monday in clamping down on the business it does with Huawei Technologies , after U.S. President Donald Trump imposed a ban on the Chinese firm on national security grounds.

And:

While most U.S. suppliers have yet to issue statements on their position on the Huawei ban, Bloomberg reported that Intel Corp, Qualcomm Inc, Xilinx Inc and Broadcom Inc have all now told their employees they will not supply Huawei until further notice.

Xilinx said the company was aware of the Denial Order issued by the U.S. Department of Commerce and is cooperating. Other companies did not immediately respond to Reuters’ requests for comment.

That’s a major part of Huawei’s supply chain right there. Without those parts, you have to wonder how long the company can survive. Though they say that they have a backup plan:

Founder and chief executive Ren Zhengfei said on Saturday that Huawei’s growth “may slow, but only slightly” due to the U.S. restrictions and that it would be “fine” even if Qualcomm and other American suppliers would not sell it chips.

Huawei’s chip arm HiSilicon had been secretly developing back-up products for years in anticipation of the unlikely scenario that Huawei may one day be unable to obtain advanced chips and technology from the United States, President He Tingbo said in a letter to staff dated May 17.

All I have to say is good luck with that as I really can’t see how their in house gear will make up for the fact that the stuff that every wants to see in a modern smartphone is stuff that Huawei can’t get. But I suppose anything is possible. We’ll just have to watch and see what happens next.