Google Cuts Off Huawei From Some Smartphone Services -- Update
May 20 2019 - 5:48AM
Dow Jones News
By Dan Strumpf and Yoko Kubota
Google is halting some services for smartphones made by Huawei
Technologies Co., according to people familiar with the matter, in
a sign that the U.S. decision to deny the Chinese tech giant access
to U.S. technology will bite into its booming consumer-device
business.
Huawei, which recently surpassed Apple Inc. as the world's No. 2
supplier of smartphones--it now trails only Samsung Electronics
Co.--relies on Google's Android operating system to run its
devices. Though existing phones are expected to keep functioning
largely as usual, users could lose some functions, according to a
person familiar with the matter.
Separately, San Diego-based Qualcomm Inc. has suspended
shipments to Huawei of its chips, and its employees have been told
not to communicate with the Huawei side, according to a separate
person familiar with the matter. Qualcomm chipsets are used in
certain Huawei smartphone models. Huawei also designs a large
number of its own chips for higher-end phones.
Last week the U.S. Commerce Department announced it was adding
Huawei to its "Entity List" on national-security grounds, requiring
companies that export U.S. technology to the Chinese company to
apply for a license. The department has indicated applications are
likely to be denied, which would cut off Huawei from a range of
crucial American suppliers.
Huawei, the world's biggest maker of telecommunications gear,
draws upon suppliers from around the world, but it relies on
American companies to supply certain components that go into its
smartphones, cellular base stations and other products.
Huawei's founder and CEO, Ren Zhengfei, told reporters Saturday
that the impact on smartphone production would be limited even if
Huawei cannot import chips, according to a spokeswoman who
confirmed his remarks.
A Huawei spokesman said the company will continue providing
security updates and after-sales services to existing Huawei
smartphone and tablets, "covering those that have been sold and
that are still in stock globally."
"As one of Android's key global partners, we have worked closely
with their open-source platform to develop an ecosystem that has
benefitted both users and the industry," the spokesman said.
A person familiar with the matter said Huawei will only be able
to use the public version of Android and will not have access to
proprietary apps and services from Google.
A Google spokesman said the company is "complying with the order
and reviewing the implications." The spokesman added that many
Android functions will continue running as normal, including access
to the Google Play app-store service and security protections from
Google Play Protect. Reuters first reported the halt by Google.
Google's standard suite of apps, like Google Maps and Gmail,
will continue to function normally, according to a person familiar
with the matter. However, Huawei phones may lose other Google
services as part of U.S. government action, this person said.
Proprietary apps and services such as some artificial-intelligence
capabilities that connect to Google infrastructure may cease to
function, according to this person.
Huawei's global smartphone shipments rose 50% in the first
quarter, bucking an industrywide decline of 6.7%, according to
research firm International Data Corp. The consumer-business group
last year became the biggest source of revenue for the
Shenzhen-based technology giant, outpacing revenue from its carrier
customers for the first time. Last year, consumer sales including
smartphones, laptops and other gadgets accounted for 48% of
Huawei's $107 billion in revenue.
Qualcomm didn't immediately respond to a request for
comment.
Huawei has been stockpiling inventory and has developed its own
operating system to protect against a supply disruption. However,
it isn't clear when or if Huawei can easily switch operating
systems on existing smartphones.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Yoko Kubota
at yoko.kubota@wsj.com
(END) Dow Jones Newswires
May 20, 2019 05:33 ET (09:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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