By Dan Strumpf
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 10, 2019).
DONGGUAN, China -- Huawei Technologies Co. offered the first
details about the operating system designed to replace Google's
Android on its smartphones, as the Chinese technology giant races
to develop backups to American technology following its U.S.
blacklisting.
Huawei's new operating system, called HarmonyOS, is intended to
run on all of Huawei's consumer gadgets, including its hugely
popular smartphones, which run Android and have taken a sales hit
overseas since its May blacklisting, said Richard Yu, the head of
Huawei's consumer-device business.
Huawei prefers to continue using Android, the world's most
popular smartphone operating system, on the company's smartphones,
Mr. Yu said. But Huawei could switch its handsets to HarmonyOS "in
just one or two days" if it had to.
The company faces numerous hurdles to getting its operating
system off the ground if it loses access to Android, and the stakes
are high as smartphones make up a large chunk of the
consumer-products revenue that comprises more than half of Huawei's
sales.
Mr. Yu offered scant details about the interface and
functionality of HarmonyOS.
Handset users are typically reluctant to change operating
systems, and users have numerous Android-based handset alternatives
to Huawei. In addition to persuading consumers to switch, Huawei
must also encourage the development of a new ecosystem of
smartphone apps and other software.
Mr. Yu announced the new operating system at an event at a giant
basketball stadium on the edge of Dongguan, a southern Chinese
factory town. The meeting, called the Huawei Developers Conference,
was packed with journalists and software developers from across
China and evoked similar annual developer gatherings hosted by tech
giants like Apple Inc.
The launch comes as Huawei struggles to cope with the loss of
significant amounts of U.S. technology after the Commerce
Department added the Chinese company to its "entity list" in May.
That blacklisting prevents companies from selling Huawei
U.S.-sourced technology without a license, cutting the tech giant
off from billions of dollars worth of American components and
software.
Especially problematic for Huawei is the prospect of losing
access to Android and other software from Alphabet Inc.'s Google,
which has been crucial in making Huawei smartphones popular in
Europe and many other Western markets.
The company also uses Microsoft Corp.'s Windows on its PCs.
Huawei was the world's No. 2 smartphone maker in the first half
of the year, ahead of Apple and behind only Samsung Electronics Co.
Shipments rose 24% to 118 million units in the first half, the
company said. Mr. Yu said Huawei might have unseated Samsung in the
second quarter if not for the "external environment."
Despite their popularity around the world, smartphones made by
Huawei have a tiny market share in the U.S., where major carriers
don't sell its phones. U.S. officials consider Huawei to be a
security threat, which the company denies. Huawei is the world's
largest maker of telecom gear, including equipment for the coming
generation of superfast 5G networks.
Many analysts think Huawei's international gadget business is
likely to suffer heavily without consistent access to Android and
Google's suite of apps -- though sales soared in China, where
Google products are largely banned, during the second quarter amid
the U.S. clampdown.
"HarmonyOS, if deployed right now for smartphones, could be an
uphill battle for Huawei, as still lots of work needs to be done to
bring it to iOS or Google Android level at global scale," said Neil
Shah, research director at market-analysis firm Counterpoint
Research. Apple's mobile operating system is iOS.
The Trump administration has been urging U.S. companies to apply
for licenses to resume shipments to Huawei, after U.S. actions
against the company dimmed the prospects for a trade deal between
Washington and Beijing. The Commerce Department, however, has yet
to announce whether any such licenses have been granted, and Mr. Yu
said Huawei is awaiting updates.
On Wednesday, the White House moved to implement rules that ban
U.S. agencies from buying from Huawei and several other Chinese
tech companies.
Mr. Yu said HarmonyOS has been in development for two years,
though Huawei Chief Executive Ren Zhengfei has said it wasn't
originally intended to run on smartphones.
Mr. Yu said HarmonyOS would be open source, like Android, and
that Huawei is encouraging software developers to help the company
build an ecosystem of apps and other products.
"We want to build a global operating system so that it will not
be used by Huawei alone," he said.
Write to Dan Strumpf at daniel.strumpf@wsj.com
(END) Dow Jones Newswires
August 10, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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