Recent statements from the US administration are showing possibilities of future sanctions on Chinese tech firms, similar to the Huawei situation in 2019.

The next step in the US-China trade war is near. Last week, the United States Secretary of State Mike Pompeo had confirmed plans to ban so-called “untrusted” Chinese apps in app stores as well as Chinese phone manufacturers. He also stated that Washington would stop manufacturers like Huawei from making US-made apps available for download or pre-installation.

While the term “untrusted” is not yet specified and can be interpreted in various ways, it should still serve as a warning to all Chinese smartphone manufacturers to implement contingency measures from now, for all the rhetoric so far has been eerily reminiscent of language employed by the US government before it took action against Huawei not so long ago.

Chinese chipsets are suffering from US sanctions. Photo: Notebook Check.

The Huawei ban once made headlines around the world back in mid-2019, as Huawei found itself on the US Entity List – banned from free business operations with US companies and firms with US-derived technology. Similar punishing restrictions can easily impact other Chinese Android brands, and they need to be prepared for those same challenges, or potentially a lot worse.

US-China trade war: Bad for Huawei, a lot worse for others

One of the most pivotal companies forced to break its relationship with Huawei was Google. And the loss of Google Play Services had undoubtedly been a harsh blow for the Chinese brand. All of Huawei’s recent phones and tablets haven’t offered pre-installed Google Apps, and while the company’s position in the global market has remained strong, this was largely dependent on its homegrown sales in China, where Google is not a factor.

This same fate would await numerous Chinese smartphone manufacturers if the US simply mark all Chinese brands as “untrusted”. From OnePlus and TCL to Oppo and Xiaomi, the vague language used by the Trump administration means no brand is safe.

One way to mitigate the potential impact of losing Google would be to submit devices for Google certification as far in advance as possible. This isn’t a sure-fire way to beat US sanctions and it’s essentially delaying the inevitable, but it does mean Chinese OEMs could establish a solid portfolio of new and upcoming devices with Google services in anticipation of a possible ban.

Another solution less popular is for these brands to rebrand their existing devices, as Huawei once did with its P30 Pro New Edition. However, this option is more like repainting a house or adding another layer of coat with no renovations being made.

Scorched earth policies

US trade bans against Chinese smartphone manufacturers not only make them lose out on Google’s version of Android, but also prevents their access to the hardware that forms the foundation of so many Android devices.

The fallout of the US-China trade war could restrict or cut-off the supply of all-important processors to Oppo, OnePlus, and Xiaomi. None of these brands have in-house chip design capabilities such as the HiSilicon unit responsible for Huawei’s Kirin chipsets, as they all use Qualcomm or MediaTek SoCs.

While Oppo has confirmed its advancing work in this area, it’s still years behind other chip designers. Even if companies like Oppo could design its own chipsets, they’d be way behind competitors like Qualcomm in power, features, and efficiency.

And even if Oppo or Xiaomi manage to design cutting-edge chipsets enough to compete with Qualcomm – they’d still need a company to actually build those chips. In fact, this is exactly the situation Huawei has now found itself in, as Leading chipmaker TSMC has been barred from producing chips for HiSilicon, and subsequently, Huawei had to confirmed that the Mate 40 series will be its last Kirin-powered flagship.

It’s hard to imagine Chinese smartphones without Snapdragon chipsets. Photo: Trusted Review.

If similar measures were implemented by the US on a broader scale, many Chinese OEMs would be forced to turn to less advanced chipmakers that aren’t using US technology. It’s hard to imagine a new OnePlus flagship without the latest flagship Snapdragon processor, yet  this has become an increasingly feasible scenario. The best bet in the short-term may be for manufacturers to start stockpiling chipsets and other components from suppliers immediately, though even this wouldn’t guarantee survival in the longer term.

Statistics from many research firms had shown that 70% of Huawei’s shipments in Q2 2020 were to China. The company’s dominance in its domestic market along with its extensive resources had put Huawei in the best position to weather US sanctions than any other Chinese smartphone maker.

Xiaomi and Realme are heavily investing in India, while OnePlus had been one of the few Chinese brands to enjoy any fraction in the US. These positions, however, will become a lot more perilous without access to Google services and the market’s bleeding-edge chipsets.

ZTE had suffered heavy damages when hit with several weeks of US sanctions in 2018. The similar thing will occur to small Chinese firms without the financial backup and influence of Huawei.

A united front against sanctions

One possible solution would be for Chinese brands to form a united front against any US action. It might sound outlandish to think of rival companies working together, but we’ve already seen examples of this kind of co-operation in action.

Earlier this year, news emerged that Xiaomi, Oppo, Vivo, and Huawei had all joined forces to form the Global Developer Service Alliance. This partnership was formed with the aim to streamline the uploading of foreign content to each manufacturer’s app store in various global markets, while also making it easier for developers to promote said content.

This approach is not necessarily the same as forming a truly unified app store. There would be far more challenges in the way, but it would still be the best possible solution without Google services, especially for companies with ambitions outside of China.

Oppo, Vivo, and Xiaomi recently launched the Peer-to-Peer Transmission Alliance to support local file-sharing between devices, a feature Google had recently abandoned. There was also the Unified Push Alliance – a China-based alternative to Google’s push notification service – that counts Huawei, OnePlus, Oppo, Vivo, Xiaomi, Realme, and even Samsung among its members.

All of these initiatives show that Chinese, or even Korean manufacturers, are ready to work together to solve situations that Google can’t or won’t solve. A wide-scale plan to slap Chinese OEMs with sanctions could encourage further collaboration.

Could Chinese brands go one step further and unite to build an alternative to Android or even join Huawei in pushing Harmony OS? Huawei’s homegrown OS isn’t quite ready for phones yet, but the firm surely wants other brands to support the platform to broaden its reach. Furthermore, it may also be able to fill the gap left behind by Android in devices like the wearable, IoT, and TV.

The US-China trade war shows little sign of de-escalation, and to handle potential punishing policies from the Trump administration, no option should be left off the table for Chinese OEMs.

Source: VnExpress (From Android Authority)

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