Commentary on Political Economy

Friday 7 June 2019


Facebook Inc. FB 0.10% will no longer allow its apps to come pre-installed on mobile devices made by Huawei Technologies Co. following the U.S. blacklisting of the Chinese tech giant, dealing another blow to its booming smartphone business.
Facebook, which owns popular apps including Instagram and WhatsApp, is one of many software makers whose apps come pre-installed on Huawei phones, which outsold Apple Inc.’s iPhone globally in the first quarter of this year. Huawei is now second only to Samsung Electronics Co.
Huawei will no longer be able to pre-install those apps, according to a person familiar with the matter, though those who already own Huawei phones will continue to have access to Facebook apps and updates. It isn’t clear if Huawei phone users without the apps will be able to download the apps and updates themselves.
In a statement, a Facebook spokeswoman said: “We are reviewing the Commerce Department’s final rule and the more recently issued temporary general license and taking steps to ensure compliance.” A Huawei spokesman declined to comment. Facebook’s move was first reported by Reuters.
Facebook’s move threatens Huawei’s burgeoning smartphone business, especially in key markets such as Europe. Consumer devices are now Huawei’s biggest revenue generator, pulling in more than $50 billion last year, according to the company. Some Japanese and European carriers have suspended plans to launch Huawei phones over concerns about the future stability of their apps and services.Facebook is the latest U.S. company to restrict access to its products following last month’s blacklisting by the Commerce Department that restricts the sale of American technology to Huawei on national-security grounds.Alphabet Inc. has said it won’t have its popular Google apps on future Huawei phone models, will have to limit the support for its Android operating system and will stop providing other software such as security updates after a 90-day window.
The Commerce Department’s export controls target Huawei’s traditional business of telecommunications equipment, in which it is the market leader, because U.S. officials believe Beijing could use the company’s telecom gear to spy or disrupt communications networks—claims Huawei vehemently denies. The order’s effect, however, will be felt across all of Huawei’s businesses.
Crucial hardware suppliers including American chip maker QualcommInc. and U.K. chip design firm Arm Holdings PLC have also been forced to halt business with Huawei.
The Chinese company has said it has a stockpile of components to weather the supply disruption and it is also working on its own operating system to replace Google’s Android, on which its phones currently run. Previous efforts by phone makers to launch their own operating systems have met with limited success.
The Commerce Department action came alongside a U.S. executive order aimed at blocking Huawei’s business in the U.S. It follows a campaign to restrict Huawei gear from 5G network rollouts in countries that are close U.S. allies.

No comments:

Post a Comment