This past Monday, the trade war between the United States and China finally made its way to the tech market. The Chinese-based tech company Huawei was placed on a ban list by the United States government, meaning no American company can do any form of business with the new emerging phone manufacturing giant.
Huawei has an interesting relationship with the United States and their tech.
All of Huawei's phones run on the Android operating system, which is owned by Silicon Valley juggernaut Google. Since Google is an American company, Huawei phones will no longer be able to receive Android phone updates, which is crucial to making their phones work.
This new legislation is going to be a serious blow to the new emerging tech giant.
Huawei is currently the second largest phone manufacturer in the world, coming second only to Samsung. To make matters worse, much of their success in the phone market is a result of the Android operating system and its easy user accessibility.
Without this operating system, questions are now being raised on what will happen to customers who currently have Huawei phones. Will the phones no longer work after 90 days? Will the phones be exempt from the law because they were bought in the past? How will Huawei phones be able to function if this ban holds up?
In addition to Huawei no longer having access to the Android operating system license, Huawei can no longer buy American-manufactured phone parts that are vital for their development. Phone chip manufacturers Qualcomm, Intel, and Broadcom have all severed ties with Huawei, putting even more pressure on Huawei's future.
Luckily for Huawei, it seems like they have been preparing for the potential fallout of the trade war between the United States and China. A Huawei spokesperson said that in anticipation of this ban, Huawei has been stockpiling phone parts in the last few months. This move would allow them to maintain productions of their phones.
This solution, however, is a temporary one.
It is unknown how long the trade war is going to last, and the stockpiled parts are going to eventually run out.
Huawei was on its way to becoming the top phone manufacturer in the world. The setbacks that the American blacklisting has caused Huawei seem to be massive. Time will tell how long this trade war is going to last, and whether or not Huawei can find ways to weather this financial storm.