Huawei Ban in US-China Trade War, How it can affect Nepal? | Empowering Entrepreneur

Huawei Ban in US-China Trade War, How it can affect Nepal?

Huawei Ban in US-China Trade War, How it can affect Nepal?

Huawei Ban in US-China Trade War, How it can affect Nepal?
  1. What is Huawei?

  2. What is US-China Trade War?

  3. What is 5G Technology?

  4. How Huawei Get involved in US-China Trade War?

  5. When was ban imposed and how it affects Huawei?

  6. What is the response from the Huawei to the US?

  7. How it is going to affect Nepali Market?

  8. Possible Future Implication considering Nepal and What Nepal Should Do?

What is Huawei?

Huawei Technologies Co. Ltd. is a Chinese multinational technology company that provides telecommunications equipment and sells consumer electronics including smartphones, headquartered in Shenzhen, Guangdong, China.

Huawei is stated to be an employee-owned company. Ren Zhengfei retains approximately 1 percent of the shares of Huawei's holding company, Huawei Investment & Holding, with the remainder of the shares held by a trade union committee that is claimed to be representative of Huawei's employee shareholders. 

What is US-China Trade War?

China and the United States are engaged in a trade war as each country continues to dispute tariffs placed on goods traded between them. US President Donald Trump had declared in his campaign to fix China's "longtime abuse of the broken international system and unfair practices".  Trade war dispute was increased due to the increase tarrifs in different product that have been imported by the US from China. US is claiming from past that China has been stealing the Intellectual Property from US In April 2018, the United States filed a request for consultation to the World Trade Organization to investigate whether China was violating any intellectual property rights. Since then (Janaury 2018) from when this issue has been escalating and reached to its peak when President Trump has banned Huawei from doing business with the US companies.

What is 5G Technology?

5G is generally seen as the fifth generation cellular network technology that provides broadband access. Wireless networks are composed of cell sites divided into sectors that send data through radio waves. Fourth-generation (4G) Long-Term Evolution (LTE) wireless technology provides the foundation for 5G. Unlike 4G, which requires large, high-power cell towers to radiate signals over longer distances which can travel signal up to 45 miles distance, 5G wireless signals will be transmitted via large numbers of small cell stations located in places like light poles or building roofs which can travel up to only 1000ft. The use of multiple small cells is necessary because the millimeter wave spectrum -- the band of spectrum between 30 GHz and 300 GHz that 5G relies on to generate high speeds -- can only travel over short distances and is subject to interference from weather and physical obstacles, like buildings.

5G is the high-speed data transfer network which 5G is much faster than 4G more than 20 times. For comparison movie which takes 26 hours to download in 3G network can be downloaded in 6 minutes in 4G and that can be downloaded in 3.6 seconds in 5G network. Can you imagine the whole movie is already downloaded while you click the link to download the movie and close the tab?

How Huawei Get involved in US-China Trade War?

About Huawei Business 

Smartphone Supply

Huawei became the second largest Smartphone supplier just after Samsung in 2018 in worldwide smartphone sales exceeding the supply of the Apple sales taking the market share of 15.8% share see below the chart taken from idc.com. Some of the best phone from Huawei recently launched includes Huawei P30 series, Mate Series, etc.

Vendor

2Q18 Shipments

2Q18 Market Share

2Q17 Shipments

2Q17 Market Share

Year-Over-Year Change

1. Samsung

71.5

20.9%

79.8

22.9%

-10.4%

2. Huawei

54.2

15.8%

38.5

11.0%

40.9%

3. Apple

41.3

12.1%

41.0

11.8%

0.7%

4. Xiaomi

31.9

9.3%

21.4

6.2%

48.8%

5. OPPO

29.4

8.6%

28.0

8.0%

5.1%

Others

113.7

33.2%

139.5

40.1%

-18.5%

Total

342.0

100.0%

348.2

100.0%

-1.8%

Telecommunication Market

Not only in the smartphone market Huawei is one of the largest supplier of telecommunication equipment including 3G, 4G technology and upcoming most anticipated 5G Technology. Huawei is leading 5G telecommunication equipment supplies including chips, modem, tower, and other equipment.

As said by different sources Huawei is the only company supplying the 5G technology equipment of that quality in today's market.  Larges company of the US such as Intel, Qualcomm, Broadcom, ZTE, Samsung, Ericsson is far behind Huawei, It will take years to reach the place where Huawei is at present state.

US has been raising the question to the Huawei from past few years about the security concerns of the data and critical information that Huawei may be supplying to the Chinese government and can supply in the future to the Chinese government by providing the backdoor in the telecommunication equipment it supplies to the US. 

Recently on Feb 21, 2019, President Trump has tweeted

I want 5G even 6G, technology in the United States as soon as possible. It is far more powerful, faster and smarter than the current standard. American Companies must step up their efforts or get left behind there is no reason that we should be lagging behind on something that is so obviously the future. I want the United States to win through competition, not by blocking out currently more advanced technologies. We must always be the leader in everything we do, especially  when it comes to the very exciting world of technology!

As this indicates that President wants the US company to lead the market so the move of banning Huawei may be motivated due to reducing the competition and promoting the US Companies or may be due to the security concerns also.

So which ever company takes over earlier to the 5G dominance is going to dominate the complete tech industry in coming future.

When was ban imposed and how it affects Huawei?

Trump has signed an executive order to ban the Huawei recently and blacklisting the company. After that, no US Company can do business with Huawei. Huawei is currently working with most big companies in US such as Qualcomm, Broadcom, Intel, Google, Nvidia, ARM, etc. Huawei is supplying telecommunication equipment and it has been using the Snapdragon chipset in a smartphone, Android OS, Microsoft OS in its laptops, Intel chipsets.

After the ban has been imposed none of the companies can carry on business with the Huawei now Huawei cannot use Android in smartphones, windows and intel chip in laptop. After the ban, Huawei is going to hit hard by the decision of the US Government.

Affect in Android Phone

Whereas recently the US government has lifted 90 days temporary ban, from the Huawei-Google that means Huawei is getting service from US companies till 90 days. After that Huawei is not getting the Android OS license. This means no more security updates and os updates for the Huawei Phones and Huawei phone will not get the Google services such as google play services, youtube, Gmail, etc if Huawei uses the Android Open source operating system.  But as Google has said the existing smartphone in the market will not get affected they will be run as currently being running and no services will be affected.

This indicates that no more Windows laptop and android phones from the Huawei in the coming future unless Huawei is willing to use the Android Open Source Operating System.

What is the response from the Huawei to the US?

Huawei president Ren Zhengfei  has recently released press conference saying that "Growth of the Huawei may be slow down but Huawei will not stop, Huawei is working on its own operating system from the past few years, Huawei is manufacturing its kirin chipset from its Subsidiary company Hisilicon So Huawei is going to stand on its own."

How it is going to affect Nepali Market?

Even though the exact number is not known Huawei is selling its smartphone in Nepal from the past few years and has taken good market share. Huawei claims it to be above 15% smartphone market in Nepal. Even the decision to ban Huawei due to US-China trade war is of the US Government. Due to, Huawei is not going to get support from US tech giant Google, Qualcomm so it cannot manufacture the Android smartphone in the coming future and cannot provide support to the existing customer.

Even if it will use its own OS it will take time to convince the customer to use its new os being new it will have less trust over android. Being the largest smartphone manufacturer it has given tough competition to another smartphone supplier such as Samsung, Xiaomi, etc. If Huawei cannot provide the smartphones in coming future, this means one less competitor in the market and it will benefit the other suppliers and may also cause the hike in smartphone prices in coming future or maybe not. 

Possible Future Implication considering Nepal and What Nepal Should Do?

China is a dominating economy, China has the nature of providing the services and goods in low prices and killing the competition in another country. China has a trend of increasing tariff after the country becomes dependent on it. 

In the context of Nepal, Nepal has the second largest import from China, which is 143 Billion Rupees (import) and export of 2 billion rupees till first 11 months of fiscal year 2074-75 statistics tade deficit of 140 billion rupees, We are getting more and more dependent to China every year, In future we can also see the market is going to be dominated by Chinese economy. Even minor change in tarrif by china can hurt heavily to Nepalese economy. Until the government takes an effective step in industrialization inside the country.

It is the big question of whether we shall increase the dependency on China by importing more and more goods? Who knows what is going with US-China dispute can also arise with Nepal and China after we have increased import from China from shifting our imports from India. 

Nepal Government should take it as lesson, If Huawei is not independent enough to be in it's own it is the dead end for Huawei. No Laptop, No smartphone, No 5G to the largest market US. Shifting import from china to India is not the solution. Who knows china will not take the decision as taken by India (like unofficial blockade)?  I belive Nepal government shall take it as a lesson and focus more in self dependency of country.

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