The Chinese technology giant Huawei is at the center of a far-reaching trade dispute between the U.S. and Chinese governments. The South China Morning Post reported that the company is now reducing orders for new phones. The Taiwanese technology manufacturer Foxconn has halted production lines for several Huawei phones after the Shenzhen-based company reduced orders. Foxconn also makes devices for most of the major smart phone vendors including Apple. Huawei and several of its affiliates were barred from acquiring technologies from U.S. companies following the Trump’s National Emergency declaration to protect U.S networks from foreign technologies.
The blacklist has impacted multiple lines of Huawei’s business including it handset manufacturing capabilities given the company’s reliance on Google’s Android operating system for its smartphones. Reuters also reported that Google reportedly suspended business with Huawei in May. Huawei shipped over 200 million handsets last year. The company had a stated goal to become the world’s largest vendor of smartphones by 2020. These reports from The South China Morning Post are the clearest indication that the ramifications of the U.S. blacklisting are beginning to be felt across Huawei’s phone business outside of China. Huawei was already under fire for security concerns, and will be forced to contend with more if it can no longer provide Android updates to global customers.
The company has built its own Android -based operating system, and can use the stripped down, open source version of Android that ships without Google Mobile Services. Its customers also still have access to Google’s app store. But if the company is forced to make developers sell their apps on a siloed Huawei-only store, it could face problems from users outside of China. Huawei and the Chinese government are also retaliating against the U.S efforts. The company has filed a legal motion to challenge the U.S ban on its equipment, calling it unconstitutional. It is noteworthy that Huawei has sent home its American employees deployed at R&D functions at its Shenzhen headquarters. It has also asked its Chinese employees to limit conversations with overseas visitors, and cease any technical meetings with their U.S. contacts.