Monday, May 20th 2019

U.S. Tech Industry, Including Google, Microsoft, Intel, and Qualcomm, Ban Huawei

The United States tech industry has overnight dealt a potentially fatal blow to Chinese electronics giant Huawei, by boycotting the company. The companies are establishing compliance with a recent Executive Order passed by President Donald Trump designed to "stop the import, sale, and use of equipment and services by foreign companies based in countries that are potential adversaries to U.S. interests," particularly information technology security. Google has announced that it will no longer allow Huawei to license Android, and will stop updates and Google Play access to Huawei smartphones. Huawei can still equip its phones with open-source Android, but it cannot use Google's proprietary software, including Google Play Store, Chrome, and all the other Google apps. Intel decided to no longer supply processors and other hardware to Huawei, for use in its laptops and server products. Sales of AMD processors will stop, too. Qualcomm-Broadcom have decided to stop supply of mobile SoCs and network PHYs, respectively. Microsoft decided to stop licensing Huawei to use Windows and Office products.

The ban is a consequence of the U.S. Government placing Huawei on a list of banned entities, forcing all U.S. companies to abandon all trade with it, without prior approval from the Department of Commerce. Trade cuts both ways, and not only are U.S. firms banned from buying from Huawei, they're also banned from selling to it. Huawei "buys from" over 30 U.S. companies, (for example, Windows licenses from Microsoft). CNN reports that U.S. firms could lose up to $11 billion in revenues.
Huawei's origins trace back to its founder Ren Zhengfei, who started out his tech career as part of the People's Liberation Army Information Technology R&D department, and is accused by his detractors of remaining loyal to the Chinese state in a manner that compromises security of its Western customers. Huawei was poised to become the world's #1 smartphone vendor in terms of sales.

President Trump as part of the Executive Order, writes "I further find that the unrestricted acquisition or use in the United States of 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 foreign adversaries augments the ability of foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects, and thereby constitutes an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States."

The definition of an adversarial entity is open to interpretation, and Huawei may not be the only foreign company that qualifies as one. Since trading opened Monday morning in Asian markets, stock prices of listed Chinese tech firm ZTE fell 10 percent. Huawei is a private company. Across the pond, European governments remain neutral to Huawei. The UK and European Commission have separately conducted investigations into allegations of Huawei posing a data-security risk, and have both concluded to have seen no merit to the accusations. The EU is Huawei's largest market for smartphones outside China, and an abrupt stoppage of Google services impacting functionality of Huawei smartphones in the EU exposes Google to EU anti-trust regulators who have already penalized the company hundreds of millions of Euros in the past for abusing its market dominance.

To date, the Trump administration has not put out specific evidence against Huawei in a U.S. court of law, or the public domain. Washington Post in a May 19 editorial highlights this lack of transparency. "Neither the United States nor any of its allies has produced a 'smoking gun' proving that Chinese intelligence uses Huawei technology to penetrate other countries' networks. Under the circumstances, it is legitimate for the United States to seek greater transparency from Huawei, both about its ownership and its strategic objectives in the global market," it reads. WaPo further goes on to comment that the exclusion of Huawei will impact the deployment of 5G telecommunication technology around the world, enabling driverless cars, telemedicine, next-generation unmanned mechanized warfare, and the Internet of Things.

Huawei declined to comment on the development, but has mitigations for this ban. Android has been significantly forked by Chinese smartphone vendors with open-source software, and Huawei could do something similar. The company already uses its own apps, games, and content marketplace rivaling Google Play; and almost all Google apps have alternatives in China. The company makes its own SoCs and doesn't rely on Qualcomm. The Chinese government already does not use Windows, and this development could help in the proliferation of Linux distributions. A decline in the sales and use of Microsoft Windows could be China's retaliatory move. The country has already taken tectonic market access-denial actions against U.S. firms such as Facebook, Google, and Twitter, and nothing stops it from censoring Microsoft. Intel processors continue to form the backbone of client-computing, but it's only a matter of time before Chinese firms mass-produce x86 processors of their own.

Update May 20th: Facing regulatory backlash from Huawei devices abruptly losing functionality from loss of Google Play services, Google has in a statement to Reuters confirmed that Google Play app updates and validation services will continue to be offered to existing users of Huawei devices. "For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices," the spokesperson said, without giving further details.

Update May 21st: Goldman Sachs has done some math, looking into how revenue of U.S. companies will be affected by the loss of their customer Huawei. Quite interesting numbers, and surprising how much it affects AMD.

Update May 21st: The US Department of Commerce has granted Huwei an extension of 90 days to get their affairs in order, to minimize the impact on Huawei's customers.

Update May 23rd: ARM, the company behind the IP required to build ARM-architecture-based microprocessors (which are used in most of Huawei's products), has now stopped working with Huawei, too. Sources: BBC, The Verge, Android Authority
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146 Comments on U.S. Tech Industry, Including Google, Microsoft, Intel, and Qualcomm, Ban Huawei

#126
GoldenX
People, Huawei has as many backdoors as any USA product. What a surprise.
"Don't buy their spyware, be a patriot, buy OURS".
Posted on Reply
#127
Chomiq
Prima.Vera
This is a bad attack. ST Discovery it's just original but not necessary bad. I personally FULLY enjoyed all Star Treks since STNG, including DS9, Voyager, Enterprise and now Discovery. ALL of them had have some good writings and story lines.
"It's been a long road, getting from there to here..."
Posted on Reply
#128
Sugarush
Prima.Vera
This is a bad attack. ST Discovery it's just original but not necessary bad. I personally FULLY enjoyed all Star Treks since STNG, including DS9, Voyager, Enterprise and now Discovery. ALL of them had have some good writings and story lines.
While I also like Discovery, TNG and DS9 (and partially Voyager) are my favourites, maybe because they dealt more with moral, philosophical and religious issues, while also having a lot of action. While the current generation of ST is a little light on that.
Posted on Reply
#129
OSdevr
I highly doubt we will get to see any evidence for the claims against Huawei, but not because it doesn't exist. If anyone would have found Chinese espionage it would be America's intelligence agencies, and there's no way they'll talk about it.

It's long been known that China conducts widespread industrial espionage against the US. It's about time something was done about it.
Posted on Reply
#130
Endeavour
R0H1T
That's laughable, why does it matter who owns Huawei & I'm pretty sure there are other firms which can give much higher returns, even to the US investors. You're making it sound as if Huawei is the Google (or Apple) of the next decade!
It was growing at a surprising rate (+44% last year, vs. -11.5% from Apple or -5% from Samsung), about to overtake Apple as the second smartphone manufacturer in the global market. That's kinda huge. And that was just in smartphones. It was also doing much better than all the rest of competitors in network equipment, with most of european operators planning to use Huawei for their 5G deployment. And they were also booming in laptops (the Matebook X Pro is the best high end ultrabook in the market... and they just entered the laptop market a couple of years ago), etc.
Also, don't forget they are spending a lot in R&D. More than Apple and approaching Microsoft and Alphabet. If you think they are just another average chinese smartphone manufacturer you are very wrong.
R0H1T
Again laughable argument, Huawei already sells devices with QC chips IIRC.
They have Qualcomm powered devices, but they are moving away from them to a full in-house Kirin lineup. They are also pressing TSMC to build exclusive fabs for Huawei in mainland China. Concerned enough yet? Well, the US government obviously is. They don't want another tech giant capable of rising even above Samsung, and coming from a country they don't trust. So... they are just trying to kill it or control it.
Posted on Reply
#131
Shatun_Bear
Shocking and disgusting from the US, basically wanting to keep tech a US-based cartel where prices and profits are kept sky high.

I loved the fact that Huawei were eating into Apple marketshare and consequently profit margins, meaning in the long run they'd have to lowerprices and we consumers benefit.

Vayra86
This is one of those events that remind us (and should remind you all) that we're living in a world of conflicting interests. Is this (also) about being on top of the food chain? Of course. The question you need to be asking yourself, is do you want to eat or be eaten. And entirely unrelated to your personal opinion, by living in a Western country, you're part of it and yes you will be on 'a side' of these conflicts.

Huawei was becoming far too influential for our own good and the 5G rollout was going to be a major vehicle for China to deploy mass surveillance outside of its own borders. Even the slightest chance of that happening should be a massive warning sign, and I'm glad to see it was, already over six years ago.

We can start worrying about our economy and innovation leadership and diplomacy after that. Make no mistake: China plays the game just like this and now experiences a major setback in their power creep.


Just a side note; this might even be bigger than just China. This might even be mostly about the US and geopolitical influence as a whole. The recent fleet movements towards Iran, the timing of these things is never coincidental, and already you can see this is a timing strategy that maximizes the impact and psychological effect. For Huawei, not only were they about to make the biggest deal in history, they were also the top smartphone company. If they'd been shot down three years earlier, the damage would've been minimal. But, we waited patiently for the opponent to yell 'All in!' to slam the door in its face.

Another important side note: Trump's term is coming to an end soon, and what better way than conflict to reinforce faith in your current POTUS.

Add all of those aspects up and you can see why the timing of this is so, so convenient.
You really do drink the US propaganda koolaid don't you?

Here in the UK GCHQ did an assessment of the risk of Chinese surveillance over 5G and found no risk even though many wanted them to conclude there was.

What's dumb is this hurts you as a consumer. The US tech giants don't want competition from Huawei, it's as simple as that, US administration wants economuc supremacy, it's as simple as that. 'Security fears' is a smokescreen.
Posted on Reply
#132
FordGT90Concept
"I go fast!1!11!1!"
Shatun_Bear
Here in the UK GCHQ did an assessment of the risk of Chinese surveillance over 5G and found no risk even though many wanted them to conclude there was.
Might want to check your facts...because they're wrong:
https://www.forbes.com/sites/daveywinder/2019/04/08/gchq-director-says-shoddy-huawei-security-engineering-belongs-in-the-year-2000/

TL;DR: It's full of holes and holes pointed out a year ago weren't fixed.
Posted on Reply
#133
genralramius
FordGT90Concept
Might want to check your facts...because they're wrong:
https://www.forbes.com/sites/daveywinder/2019/04/08/gchq-director-says-shoddy-huawei-security-engineering-belongs-in-the-year-2000/

TL;DR: It's full of holes and holes pointed out a year ago weren't fixed.
I had to register to answer you as I usually do not post, but to answer your facts
First Forbes is an American business.
Second it confronts to American interests, which are that Europe should not use cheaper options, but has to buy the most expensive shit that has as many backdoors as the Huawei stuff.
But you probably are American, so cannot do anything.
Me as an European citizen wants real competition. Not the so called competition that is paper thin.
Posted on Reply
#134
FordGT90Concept
"I go fast!1!11!1!"
Clearly you didn't even look at it. They cite UK agencies directly:
BBC: Huawei's 'shoddy' work prompts talk of a Westminster ban (quotes director of GHCQ)
HCSEC: HUAWEI CYBER SECURITY EVALUATION CENTRE (HCSEC) OVERSIGHT BOARD, ANNUAL REPORT, 2019
Telegraph: Cutting out Huawei from 5G network would cost Britain £7bn

UK hasn't been as proactive as USA because of that last point. Huawei is undercutting everyone else's prices and that naturally means 5G roll out will be more expensive if they are barred. USA places the importance of security over cost because a lack of security may lead to extraordinary economic cost down the road.

Because these warnings have been in place for 7+ years now, Huawei has a minimal footprint in the USA but that was threatening to change with their cheapness and the 5G roll out. Handsets aren't as big of a concern as network equipment here.

Judging by patents:
https://www.netscribes.com/top-companies-leading-5g-development/
Samsung is #1 ("end-to-end")
Intel is #2 (focusing on infrastructure)
Nokia is #3 (mostly infrastructure)
Huawei is #4 (mostly infrastructure)
Ericsson is #5 (mostly infrastructure)
ZTE is #6 (mostly infrastructure)

Add all of those up, it's only 31% of the patents.


Huawei's and ZTE's advantage is being able to undercut competitors pricing because of China's illegal trade practices.
Posted on Reply
#135
HTC
Stupid question: what does this banning mean for those that currently have a Huawei smartphone?
Posted on Reply
#136
FordGT90Concept
"I go fast!1!11!1!"
Not much. It's mostly going to affect new (post-ban) Huawei devices.
Posted on Reply
#137
lexluthermiester
HTC
Stupid question: what does this banning mean for those that currently have a Huawei smartphone?
For people in the EU, such as yourself, the effect will be minimal.
Posted on Reply
#138
HTC
lexluthermiester
For people in the EU, such as yourself, the effect will be minimal.
Mine isn't but several family members have one, which is why i asked.

My concern was if these phones were to stop functioning because of this whole mess.
Posted on Reply
#139
lexluthermiester
HTC
Mine isn't but several family members have one, which is why i asked.

My concern was if these phones were to stop functioning because of this whole mess.
Phones don't magically stop working just because the company that made them stops supporting them. Example, ZTE. I still have a ZTE Maven2 that I use as a music player, even though ZTE was shutdown for a while and they don't support the phone. No sim card, just a microsd and it work fine. Effectively a micro-tablet.
Posted on Reply
#140
Prima.Vera
Too bad they are not listed on NASDAQ and similar. Would have been interesting to see how much their shares would have drop after the US ban.
Posted on Reply
#141
Chomiq
So this went from:
"Huawei is something that is very dangerous,"
"You look at what they've done from a security standpoint, a military standpoint. Very dangerous."
To:
"If we made a deal, I could imagine Huawei being possibly included in some form or some part of it,"
very fast.
https://www.bbc.com/news/business-48392021
If the deal goes through and somehow Huawei becomes a non-issue all of the other countries that banned them will look like Trump's puppets.
Posted on Reply
#142
FordGT90Concept
"I go fast!1!11!1!"
Look at the deal US struck with China over ZTE. It made ZTE toothless as a security threat which is why they're more popular (at least in USA) than Huawei. Thing is, ZTE didn't have much in the way of Chinese control over it--not like Huawei. A similar deal will not be easily reached over Huawei.
Posted on Reply
#143
Totally
Endeavour
It was growing at a surprising rate (+44% last year, vs. -11.5% from Apple or -5% from Samsung), about to overtake Apple as the second smartphone manufacturer in the global market. That's kinda huge. And that was just in smartphones. It was also doing much better than all the rest of competitors in network equipment, with most of european operators planning to use Huawei for their 5G deployment. And they were also booming in laptops (the Matebook X Pro is the best high end ultrabook in the market... and they just entered the laptop market a couple of years ago), etc.
Also, don't forget they are spending a lot in R&D. More than Apple and approaching Microsoft and Alphabet. If you think they are just another average chinese smartphone manufacturer you are very wrong.

They have Qualcomm powered devices, but they are moving away from them to a full in-house Kirin lineup. They are also pressing TSMC to build exclusive fabs for Huawei in mainland China. Concerned enough yet? Well, the US government obviously is. They don't want another tech giant capable of rising even above Samsung, and coming from a country they don't trust. So... they are just trying to kill it or control it.
You just stated all that and the thought 'something isn't right' did not pop up once in the back of your mind?
Posted on Reply
#145
Totally
R0H1T
The timing couldn't have been worse better :shadedshu:
Dracarys: Huawei troubles compounded as Mate 20 Pro goes up in flames
Fake news. As much as I recognize this as a as a high level smear campaign brought on by several powers against Huaweii, anyone feel otherwise please convince me otherwise. It's pathetic, westerners are more than happy to exploit China at the expense of jobs and talent weakening themselves in the process, now the Chinese are taking control this is their response since since they've long cut out their legs from under themselves. Although I can't ignore or say that the company's growth is not abnormal nor propped up by the resources of it's government. How fair is it if a government funnels nearly unlimited money into a company until it's number 1? B
Posted on Reply
#146
lexluthermiester
Totally
Fake news.
Notebookcheck.net is NOT a fake news site.
Totally
As much as I recognize this as a as a high level smear campaign brought on by several powers against Huaweii
First, spell checkers are your friend. Second, Huawei is a known conformist to the Chinese government. This is not a smear campaign. It is proper and appropriate action to protect citizens worldwide.

You need to do fact-checking before spouting gibberish..
Posted on Reply
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