Google has suspended business with Huawei that requires the transfer of hardware, software and technical services except those publicly available via open-source licensing, a source told Reuters on Sunday, in a blow to the Chinese technology company that the U.S. government has sought to blacklist around the world.
Holders of current Huawei smartphones with Google apps, however, will continue to be able to use and download app updates provided by Google, a company spokesperson said, confirming earlier reporting by Reuters.
“We are complying with the order and reviewing the implications,” the spokesperson said.
“For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices,” the spokesperson said, without giving further details.
The suspension could hobble Huawei’s smartphone business outside China as the tech giant will immediately lose access to updates to Google’s Android operating system. Future versions of Huawei smartphones that run on Android will also lose access to popular services, including the Google Play Store, and GMail and YouTube apps.
“Huawei will only be able to use the public version of Android and will not be able to get access to proprietary apps and services from Google,” the source said.
Huawei commits to ‘safe and sustainable’ software
In response, Huawei said on Monday it would continue to provide security updates and services for its smartphones and tablets, but it did not say what would happen with phones it would sell in the future.
“Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally,” a Huawei spokesperson said via email.
“We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally,” said Huawei, which is the world’s second-biggest smartphone maker after Samsung and aspires to the top position.
“As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefited both users and the industry,” it added.
Huawei’s devices in its home market do not have Google apps, but the move could hugely damage the brand’s appeal to consumers outside China.
Almost half of the 208 million phones Huawei shipped in 2018 went to outside mainland China, and Europe is the most important overseas market where its devices currently had 29 per cent market share in the first quarter of 2019, according to technology research firm IDC.
The Google loss will likely cost Huawei all of its smartphone sales outside China as “device purchasing is now almost entirely driven by the ecosystem,” industry analyst Richard Windsor said.
“Huawei will not lose access to Android itself, which is open source, but Android devices outside of China must offer access to Google services in order to have any prospect of being sold,” Windsor added.
Google, owned by Alphabet Inc., said it would enact restrictions on Android updates to Huawei after U.S. President Donald Trump on Thursday added the Chinese company to a trade blacklist, making it extremely difficult for it to do business with U.S. counterparts.
Huawei, the largest supplier of telecom networking equipment, is at the centre of trade tensions between Beijing and Washington. The United States has said its gear could be used by China to spy on Americans, allegations Huawei has repeatedly denied.
On Friday, the U.S. Commerce Department said it was considering scaling back restrictions on Huawei to “prevent the interruption of existing network operations and equipment.” It was not immediately clear on Sunday whether Huawei’s access to mobile software would be affected.
Details of the specific services affected by the suspension were still being discussed internally at Google, according to the source.
Representatives of the U.S. Commerce Department did not immediately comment.
Google Play app store will still work on Huawei devices
Google said its Google Play app store and the security protections from Google Play Protect would continue to function on existing Huawei devices.
As well as restrictions on the software running its devices, Huawei faces the prospect of losing access to some of the U.S. hardware suppliers it needs to produce its technology.
Chipmakers including Intel Corp, Qualcomm Inc , Xilinx Inc and Broadcom Inc have told their employees they will not supply critical software and components to Huawei until further notice, Bloomberg reported.
Founder and chief executive Ren Zhengfei said on Saturday that Huawei’s growth “may slow, but only slightly” due to the U.S. restrictions and it would be “fine” even if Qualcomm and other American suppliers would not sell it chips.
Huawei’s chip arm, HiSilicon, had been secretly developing backup products for years in anticipation of the unlikely scenario that Huawei may one day be unable to obtain advanced chips and technology from the United States, President He Tingbo said in a letter to staff dated May 17.
The impact is expected to be minimal in the Chinese market. Most Google mobile apps are banned in China, where alternatives are offered by domestic competitors such as Tencent and Baidu.
In Beijing, Foreign Ministry spokesperson Lu Kang said the ministry had noticed the report and would look into it and pay attention to developments.
“At the same time, China supports Chinese companies to use legal weapons to defend their legitimate rights,” he added, but did not elaborate.