US ban on Huawei to have big impact on Europe, Americas, little on US, China

San Francisco —  The decision by Alphabet - of which Google is a key unit - and other US companies to cease commercial transactions with Chinese tech giant Huawei to abide by President Donald Trump’s ban on doing business with the firm will have a great impact on the European and Latin American markets, but much lesser effect on the US and Chinese markets.

Since Congress designated it a “national security threat” to the US in 2012, Huawei has had little presence in the US market - with less than a 1 percent market share, according to StatCounter - and so the ban will be more noticed by the US tech industry and providers than by consumers.

In China, meanwhile, where Google has practically no business presence, Huawei mobile phones (accounting for about half its yearly sales) operate using a modified Android version that does not come installed with the firm’s flagship apps such as Google Maps, YouTube or Gmail.

In the rest of the world, especially in Europe and Latin America, Huawei’s low-priced and high-quality mobile phones using the Android operating system have significantly penetrated the market and thus the percentage of users who will be affected by the move is quite a bit larger.

In Europe, Huawei has almost an 18 percent market share - with 20 percent in Spain - and is the third-largest seller of mobile phones after Samsung and Apple, while in Latin America the figures vary by country, ranging from 28 percent in Costa Rica and 25 percent in Peru to 18 percent in Colombia and 17 percent in Chile.

After the report appeared in the press on Sunday night, Google confirmed that it is “complying” with the order issued by the US government and reviewing its implications, maintaining that it will continue providing access to Google Play and Google Play Protect for current Huawei users but will not allow them to enable Android.

The problem will be greater for those who buy a new Huawei telephone, since with Alphabet cancelling the licenses of its products manufactured in China those products will not be sold with Google Play, meaning that it will be impossible to access all the apps designed for Android that are not “open code,” or freely available.

Although Alphabet’s move will have the most immediate impact on users and has sparked the most media commotion, six US and one German electronics manufacturers have also announced that they will break commercial relations with Huawei.

The US companies are Intel, Qualcomm, Xilinx and Broadcom, along with Germany’s Infineon Technologies, while US chipmakers Micron Technology and Western Digital also will stop supplying Huawei in compliance with Trump’s order, which will delay the plans to adopt 5G technology worldwide.

Huawei is one of the world leaders in developing 5G next-generation wireless technology, which will substantially increase Internet connection speed and allow significant advances toward achieving a full-fledged “Internet of Things,” whereby a wide array of commonly used devices, appliances and other items can be linked to the Internet.

Because of its 5G leadership, governments and companies around the world in recent months have concluded agreements with Huawei to install 5G systems, something that Trump has tried to block or hinder, especially in the case of European countries, but Huawei needs the chips and other components from its providers.

According to figures compiled by Evercore, Huawei spends some $20 billion each year on electronics and telecommunications materials, and thus the companies finding themselves compelled to break ties with the firm could lose one of the industry’s most powerful customers.

The rule established by the US Commerce Department requires all US tech sales to Huawei to obtain US government approval unless exceptions are made.