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Saturday, 19 October 2019

How will Huawei crisis affect Egyptian consumers?

Sherif Abdel-Baki scours the local tech market for fallout from the battle between Washington and Chinese telecoms giant Huawei

Sherif Abdel-Baki , Thursday 30 May 2019
Huawei smartphones
Huawei smartphones are displayed at a store in Shanghai on May 27, 2019. (Photo: AFP)
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The tech world hasn’t for a long while seen a story with far reaching implications as the crisis that made Huawei dominate global headlines.

Huawei is the world’s second most successful seller of smartphones. It trails behind South Korea’s Samsung but has overtaken Apple, which is why the recent Google decision preventing Huawei from using its Android apps on devices sent shockwaves through smartphone users across the globe.

Google’s decision followed an executive order in the US banning American firms from supplying services to the Chinese manufacturer. The US Department of Commerce has granted a three-month temporary licence, valid until 19 August, to give telecom companies that use Huawei equipment time to adjust.

The US decision comes on the back of security concerns that Huawei’s network infrastructure could be used for espionage on behalf of the Chinese government. Huawei denies the accusations.

On 15 May the US Department of Commerce added Huawei to its Entity List, prohibiting Huawei from acquiring US-made components from American companies without prior government approval.

In response to the US order, Google denied Huawei access to the Android operating system which provides apps and services such as YouTube, Gmail, Google Play and Maps.

While the ban does not mean that the phones will cease to function or that these apps will disappear from users’ phones, it may mean they can no longer update them.

“It is not yet clear whether my Huawei device will function as normal and update regularly when the US ban goes into effect. If Huawei falls off the Google wagon I will have to buy a new phone that operates Android. I’m more into familiar interfaces,” said Samah Al-Khatib, a Huawei user.

In an attempt to reassure existing Huawei users Android tweeted that services “will keep functioning on your existing Huawei device”. But calming consumers’ worries is unlikely to be an easy task given the fierce competition engulfing the tech world.

The Chinese firm has said it has been working on its own mobile operating system for some time.

“We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally,” Huawei said in a statement.

Google-owned Android is the operating system on which 88 per cent of smartphones function, including Huawei. The remaining 12 per cent is shared between the Apple and Windows operating systems.

In the first quarter of 2019 Huawei sold 59.1 million phones around the world. The current crisis, which is part of the US-China trade war, may affect the conglomerate’s sales.

What will it mean for Egyptian consumers?

Ihab Said, former head of the Communications Service Centre at the Egyptian Federation of Chambers of Commerce, said “companies that enjoy good relations with distributors and traders tend to win in the end, whatever counter-publicity measures are taken against them.”

Sellers of Huawei smartphones, he added, are “engaged directly with consumers to explain the pros and cons of the products on display, offering new presentation methods and extended warranties”.

Giant companies seldom leave their consumers at the mercy of the whims of the market, Said pointed out, and “other Chinese firms, which produce 50 per cent of the world’s phones, may join hands with Huawei.”

Said doesn’t expect the crisis to affect smartphone prices in Egypt. New products will continue to be released, pushing down the price of older models.

Amr Mohamed is a loyal Huawei user. “Even if Google removes Huawei from the Android partner programme I’ll still use the Chinese company’s new operating system. After all, Android was once new to all of us,” he says.

“This is essentially a battle between the US and Huawei over 5G technology, not over smartphones. 5G is the gateway to the Internet of Things, which is the future,” says communications consultant Khaled Sherif.

“The Internet of Things is an extension of Internet connectivity to physical devices such as household appliances, cars, security cameras and so on, enabling these devices to send and receive data and to be remotely monitored. Whoever is in control of the Internet of Things is going to lead the world economically, politically and militarily. This is a battle that may tip international balances altogether,” he says.

Sherif expects 100 billion chips to be connected to the Internet within the next 10 years, drastically changing the way services and commodities are sold.

While Washington is continuing to pressure its allies to reject Huawei’s involvement in their telecommunications infrastructure the UK has insisted it will make its own decision as to whether to include Huawei technology in rolling out its 5G network.

“The United States has to make its own decisions. We need to make ours. The view that we’ve taken is that it is more sensible to do a properly-based review of the security of the whole telecoms supply chain,” UK secretary of state for culture, media and sport Jeremy Wright told CNBC.

In response to US pressure German Chancellor Angela Merkel insisted Germany will set its own security standards for a new 5G mobile network, adding that she will not single out individual vendors nor “exclude a company just because it is from a certain country”.

French President Emmanuel Macron said his country would not cave in to US pressure to block Huawei’s 5G equipment.

“Our perspective is not to block Huawei or any company,” Macron said at a technology conference in Paris.

“France and Europe are pragmatic and realistic. We believe in cooperation and multilateralism. At the same time we are extremely careful about access to technology and safeguarding our national security.”

 *A version of this article appears in print in the 30 May, 2019 edition of Al-Ahram Weekly under the headline: Marked safe

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