Expected ban on Huawei: Short and Long Term Impacts

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Information about Expected ban on Huawei: Short and Long Term Impacts

Published on June 14, 2019

Author: IjazHaiderMalikPrinc

Source: slideshare.net

1. Expected Ban on Huawei: Short- and Long-Term impacts By Ijaz Haider Malik weboriez@hotmail.com AfterUSA expectedbanon Huawei,the number one Telecomsupplier,debatehasbeentriggered amongstpoliticiansand economistonUSA China relationship and its impact on the world economies. The Chinese telecom giant facing trouble after USA first alleged Huawei on non- compliance tosanctionsonIran andfollowedby claim that Huawei is involved in spying by installing spying hardware in their equipment. Also, USA government would like Huawei to be out of 5G competition and allow USA Telecom equipmentsupplierstogenerate more profitsin 5G technology, a kind of monopoly. USA also trying to convince Canada and European countries to ban Huawei and its products. Google was also being forced to stop selling AndroidoperatingsystemtoHuawei to throw it out of business from Mobile sets competition, which will allow Apple to acquire more market share, especially in America and Europe. As per statcounter website, Huawei has around 9% market share as mobile vendor as compared to Apple and Samsung, which have approximately 23% and 31% shares accordingly. In short term, USA Telecom suppliers may get more marketshare inthe world,butatthe same time telecomoperators operatingincountriesof Huawei ban and are usingcost effective Huawei equipment have to immediately procure new equipment of different vendor which will cost them fortune and either they have to accept decline inprofitsmarginswithincrease incapital expenditure orhave to pass theirlossesto their consumers. In both cases, countries economy and companies would be on losing end. Huawei on the other hand will go through tough times and will remain out of market for good one to twoyears,dependingontheirfuture strategies. As Huawei being forced to develop their own operating system for their mobile devices, in long term, Google Android business will dip drastically by losing big customer like Huawei. And, if Huawei would be able to develop better mobile operating system than Android,chances in longer run that Google may also lose other Mobile manufacturersgiantslikeSamsung,Vivo, Xiaomi, etc., and other midsize manufacturers, especially Chinese like ZTE, Q-Mobile, etc. In addition, Google’s monopoly for non-Apple Mobileswillbe finishedandGooglehastoinvest further more on research and development to compete Huawei, which will ultimately hit Google’s profit margins, indirectly hitting USA economy. On assumption that Huawei soon launch its own mobile operating system and people start purchasing it, all companies who have mobile apps,have todeveloptheirHuawei Mobile App versions, which on one side open doorsfor new mobile app developers,butatthe same time addexpensetocompaniestodevelop and maintain IOS, Android and Huawei OS. Google istryingitsbestto stopUSA government to ban Huawei on the assumptionhighlightedin aforementioned. World is look at Trump administration to make final decision to clear this mist, which is also called as Hybrid or 5th Generation war. Looking at facts, Trump administration might deferthe Huaweiban,buteventhanfairchances that Huawei will not take further risk and in either case will go for development of its own operatingsystemand investingmore in Europe, Asia and African markets. It seems, threat to Huawei to be banned is blessing in disguise for Huawei and threat would be for giants like Google.

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