Economy

Huawei – What Now?

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“Hey son, how do I use this?”

I looked up from what I was reading…(Tintin and the Red Sea Sharks) to see my mum with a confused look on her face.

Then I looked down at what she was holding.

A Huawei phone.

Dum Dum DUM…cue dramatic music.

Image result for huawei phone
Oooo so shiny!

OKOK, let’s take a step back here guys – so what right?

Some of us have Apple Iphones, others have Samsung Galaxies, so what if your mum has a Huawei phone?

Well, unfortunately for Mum, she’s just become an unwitting pawn in the escalating trade war between the US and China.

I wrote about the trade war earlier (read here) but this latest episode represents a DRASTIC escalation of tensions.

Why?

Ok so Huawei is no stranger for making the wrong headlines in recent years.

It was prevented from participating in the roll-out of the 5G network from Australia last year (it was involved in the 3G and 4G roll-outs).

And as we’ve seen, most recently – it was banned from the US – on the grounds of national security.

Image result for 007
But British Secret Agents? We love ’em! Let ’em in.

This stems from the Australian and US government concerns that Huawei infrastructure could allow the Chinese government to collect foreign intelligence, sensitive information, and sabotage economic interests.

So?

Huawei is the world’s second-largest smartphone maker, its number one telecommunications-equipment provider, and a leading developer of 5G technology. And it is profoundly reliant on U.S. made parts…

Without access to U.S.-made semiconductors, Huawei could struggle to fulfill its existing 5G contracts – though China is scaling up its domestic chip-making capacity, it currently accounts for only 3 percent of global chip production.

So when President Trump signed an executive order that prevents U.S. companies from purchasing or selling telecommunications equipment to Huawei, it ‘s a deliberate action against one of China’s leading companies.

And…then?

Well, Google has stated that it would retract permission from users of Huawei phones to update Android software and to potentially restrict their access to the Google Play store and other features such as Gmail (!)

As this is to be applied to new handsets, you would imagine that it would severely affect future sales of the brand going forward.

And then?

Um, it also means that leading semi-conductor (little micro-chips that make the world go round) suppliers in the world such as Intel, Qualcomm, Broadcom are also restricted from any future sales with Huawei.

This has huge consequences in the industry, and consequently impacts everything we rely on to live efficiently, from raising of prices to delays of innovative technological products.

Collateral damage much?

Image result for collateral damage
Arnie, Arnie, Arnie, how many times do I have to tell you… Silicon microchips are our friend.

Annnnnd then?

Argh! No AND THEN, oh wait, there is an and then.

And then it would mean that… well if Winnie the Po… I mean President Xi decides on retaliation, we might see the likes of Apple being in the crosshairs, and that would really kick things off.

Kind of like when two class bullies go against each other, everyone just becomes collateral damage – gosh love that movie.

Andthen?

NO AND THEN.

Sigh.

Ok fine, so what does it mean for us Aussie users of the product?

Following the ban, Huawei devices are still available to purchase from our leading providers – Telstra, Optus and Vodafone.

These companies have assured the public that all current devices will continue to be supported.

This means that Google-owned apps and the Google Play Store will still be available to users, and that their phones will continue to receive security and operating system updates.

Good news right?

And….? Then.

Image result for i refuse to play your chinese food mind games gif
Hahaha!

ARGH!!!

OK, so the US department of commerce has given a 90 day grace period on the ban, who knows if this will be extended (maybe if the trade war is resolved by then?)

Although users like my Mum with Huawei phones have nothing to worry about for now, you’d think that the future of Huawei in Australia is increasingly bleak.

And then!

I think… I think I’ll end it with the retaliatory response from Beijing’s foreign ministry spokesman:

“International business, trade, and investment should be based on mutual respect, equality and mutual benefit…as to what detailed measures Chinese companies and government will take, you can wait and see.”

Indeed we shall. The times, they are a-changing!

Andthenandthenandthenandthen…

*&$(_!@

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