1 year later - Did the Huawei ban work?

this video was sponsored by backplace stick around to the end of the video where i'll have a link for you to try out their unlimited computer backups for free the huawei ban was originally announced in may of 2019 and i made a full video explaining it back then but over a year has passed since and i wanted to take a closer look at what happened since how was the ban actually implemented and how did it impact huawei its competitors its suppliers the industry as a whole so in the 68th episode of the story behind series let's take a second look at the huawei ban [Music] the thing we usually refer to as the huawei ban isn't actually a single band but rather a collection of many smaller bands that sort of fall into two main groups first is a band that stops u.s network operators like verizon and a tnt from buying huawei networking equipment to build their networks and this specific part of the ban has been rather clear-cut as not only has huawei been removed from all new purchases but network operators have also been ordered to rip existing huawei solutions out of their networks too removing existing equipment is a long and complicated process that will take years but the ban is in full force and parallel to that the us has also tried to convince or rather pressure other countries to do the same with varying amounts of success of the us's closest allies all four have either completely or partially announced that they would avoid huawei equipment while lots of other traditional us allies including germany and the philippines have resisted the pressure each allowing their operators to buy at least some huawei equipment the second big group of bands is connected to the u.s putting huawei on its entity list we originally thought this would mean u.s companies in general would be bought from supplying huawei with any goods or services but that did not end up being the case at all and after many months of flip-flopping around and extensions and delays the us government actually ended up implementing these entity list bans rather arbitrarily to explain what i mean let's actually take a look at the seven key suppliers of huawei that i think you as tech enthusiasts will know about google obviously arm and tsmc which huawei needs for making processors and finally microsoft intel amd and nvidia which make the operating systems and various components that power huawei's laptops amongst other things of those seven five are u.s companies and weirdly enough four of the five seem to have gotten licenses to keep selling to huawei the company has released multiple new laptops since the ban all running microsoft's windows and using chips from intel amd and nvidia it's hard to say why exactly those were approved but my guess would be that the us government just didn't consider huawei's laptop business to be big enough to be relevant instead the us seems to have focused on bands that would specifically hurt huawei's two biggest businesses by far which of course are phones and networking on phones google had to completely drop support for new huawei models that came out after the ban meaning that besides losing access to google apps like maps gmail or the play store itself they would also lose access to gms or google mobile services gms are a set of background services that are pre-installed on most regular phones that a ton of third-party apps rely on too like google location services that apps like uber use to find you on a map safetynet which many banking apps use to ensure your phone hasn't been tampered with and firebase which many apps including my very own crowd use for sending notifications with gms gone from huawei phones hundreds of thousands of android apps either don't work on them at all or they do so badly unless of course they are rewritten for huawei phones specifically now other than google the u.s has also started exerting pressure on huawei's high silicon business unit which makes chips that power not only the majority of huawei phones and wearables but also its server and networking products the way this chip business typically works is that high silicon basically takes a bunch of designs from external companies like arm for their cpus and gpus for example they add their own customizations and components on top they combine all of that into a so-called soc or system on a chip and then they have an external company usually tsmc actually manufacture them in huge quantities in other words high silicon and by extension all of huawei's core hardware products rely heavily on arm and tsmc neither of which are u.s companies but both of which have received a ton of pressure from the us to drop support the us has had luck pressuring tsmc who has announced a few weeks ago that they would stop manufacturing huawei chips altogether which is a huge blow to huawei as tsmc is much better than anyone else at making chips while arm currently still licenses their designs to huawei but is doing so on really shaky grounds arm licenses inside china are actually handled by a chinese subsidiary which is majority owned by chinese investors so that is probably what has shielded them from u.s pressure so far but arm is actually going through quite a lot of turmoil right now and that might leave them exposed eventually anyway farm china is in a legal battle with its own parent arm holdings and arm holdings itself is currently being auctioned off by its parent and depending on who ends up buying it arm might or might not have to cut ties with huawei in the end i've talked about all the chip troubles of huawei and arm in detail on my second channel the friday checkout i've linked to that somewhere here but either way one thing is clear huawei's chip business is under enormous pressure so looking at these seven suppliers then we can see pretty clearly that the entity list ban is in practice not at all what the us government announced at first it is not a ban on u.s companies in general supplying huawei but rather the us picking out a few key suppliers from basically anywhere in the world especially the ones it thinks our court to huawei's business and pressuring those to cut their ties with huawei okay now that we are up to speed with what has actually been banned let's take a look at how these bans have impacted huawei and the industry in general in terms of being banned from various 5g networks around the world the story is rather simple huawei has simply lost a ton of international contracts and it seems to be squeezed out of some key countries for the foreseeable future meaning that its competitors like nokia ericsson and samsung can be happy that said huawei still reigns supreme at home which is a gigantic market it is likely to remain dominant in a few international markets as well and it's actually receiving royalties for its 5g patents that are used even by network operators who don't choose to buy their equipment so while this is a major blow to them i don't think it's fatal at all the real threat in my opinion is actually the loss of key suppliers like google and tsmc because these losses mean that huawei now has to basically completely restructure its business and re-engineer its products on short notice the loss of google services suddenly made huawei phones much less attractive to many consumers outside of china which forced them to regroup and focus their efforts on the markets that work they de-emphasized markets like india where they never managed to become dominant anyway and they stopped their expansion to new markets like the united states for example instead huawei doubled down on its domestic market of china where the google ban simply didn't affect them as well as on its strongest international markets like europe and especially russia where the reliance on google is much smaller and the chinese refocusing has worked admirably well leading to huawei reaching a super impressive 46 market share and managing to increase their domestic sales so much that it actually offset most of their international losses the company now sells over 70 of its phones in china up from around 50 when the ban was implemented and with a bit of luck from corona disproportionately hurting samsung's core markets of the us brazil and india the most huawei even briefly managed to overtake samsung to become the largest filmmaker in the world huawei's success at home came almost entirely at the expense of other chinese competitors who i am sure were not too happy about it but it is impressive performance from huawei nonetheless outside of china though huawei is having a much tougher time the company has been in a desperate race to create a parallel software universe to google's with its own app store and hms or huawei mobile services that replace google's play store and gms and it has tried to onboard as many international developers as possible while they still have a critically large user base with each month since the band though their sales have been falling which means that attracting developers becomes harder and harder meaning that huawei is in a frantic race against the clock to reach critical mass with its app platforms before it's too late and huawei certainly has impressive numbers to show with 81 000 apps now having hms built in and 700 million active users sadly the majority of those are probably inside china while abroad huawei is still definitely missing a lot a recent article from pocketland for example said that only six of the 32 most popular non-google apps from the uk play store are in huawei's app gallery so far and while many of them can be installed with less direct methods this kind of highlights the scale of the problem add to that that google apps like gmail maps and youtube are apparently never going to come to huawei phones officially again and these shortcomings might just be a big enough inconvenience for the majority of non-tacky users to just skip huawei phones altogether now much like with apps starting last month huawei is now also in a race against the clock with its chip business as it recently lost access to its key manufacturing partner tsmc as i explained in a previous video of mine on my second channel tsmc is simply so much better at actually manufacturing chips than any current chinese chip foundry like smic that huawei having to switch to those might actually make huawei's chips so much less competitive that most of huawei's devices including phones wearables and even networking products might just start losing out to their competitors anyway even if they managed to sort out their software situation and that i think is where really scary things start happening because now with the ban on tsnc huawei essentially has to find three distinct almost impossibly difficult battles all at once first it has to establish a mobile ecosystem that can beat or at least approach regular android and ios which every company including microsoft has failed at so far second it has to figure out how to manufacture mobile chips on the level of quality that can match tsmc which nobody including intel samsung or smic have managed to do lately and while they're busy with that they also have to make products that are so much better than the competition that people will buy them despite having sub-par software support and potentially sub-par processors and that just seems impossibly hard to me especially given that there's no guarantee that things won't actually get even worse for them in the future the us government could manage to get armed to drop huawei as a client which would force them to also redesign their entire chip business while they're at it you could try to force other suppliers like sony or samsung to stop supplying them with components like camera sensors for example and who knows what else there are just so many huge fires for huawei to fight all at once that even a company as rich in technical resources and with as much support from its own country as huawei won't be able to innovate their way out of all of them on the long run so unless there's a political resolution to the problem like maybe the u.s actually walking back on some of its bans or at least being so slow to implement them that huawei would get some time to catch up with things i would actually expect things to start breaking at huawei sooner rather than later okay on to lighter topics at the beginning of this video i promised to show you how you can get free access to backblaze which is the service i used to backup my computers including my many terabytes of video files backblaze is a piece of software you install on your pc or mac that can then backup basically all of your files to their cloud you get unlimited computer backups backplace keeps multiple versions of your files for 30 days for restoring and everything is encrypted on your device before it's uploaded so backblaze or hackers can't actually access your files and the coolest thing is that you can not only view your files from a mobile app and restore them by downloading them but you can actually have backplates ship you a physical hard drive overnight if your data is lost which you can then copy your data from and return to get a refund that is ridiculously useful if you have a lot of data and if you aren't backing your stuff up somewhere offsite already then now is the time to start my viewers using the link in the description will get a 15 day free trial without even having to give a credit card or anything and if you still like it after that and decide to stay it's just six dollars a month no hidden fees no add-ons nothing so back your stuff up use the link in the description and i'll see you next week

Channel: TechAltar

Views: 450,323

Rating: 4.8367691 out of 5

Keywords: Huawei, the story behind, analysis, Trump, ARM, TSMC, the friday checkout, samsung, canalys, business, sales, 5G

Id: cqILB-3aCUg

Length: 12min 50sec (770 seconds)

Published: Wed Aug 05 2020

Reddit Comments

[u/Piti899]

it worked for me, no way im buying a phone without offical play store, even slashed prices aint gonna work, but thats just me. Id rather get some popular xiaomi and flash rom

[u/MelioRatio]

A really great overview. While I've had my share of both positive and negative experiences with Huawei smartphones, I still am convinced that they have been for the last few years, a force for innovation. I doubt that smartphone photography for example would have become such a focus and made such strides without Huawei pushing the tech to its limits.

Looking at Samsungs recent releases, I feel that without Huawei as a competitor, they've deiced to milk us customers for all we are worth

[u/SemiLOOSE]

Worth it for the camera alone

[u/Metalomeus]

I'm done with Huawei.... .no root option... Shitty bloatware.....fuck'em

[u/SJ0]

From a user POV it sucks having less option. They had pioneered low light photography in phones altogether. Till date their phones are pretty much the best at low light photography. Huawei share (like from phone to their tablet or computer) is still unmatched. Best 5x/10x on market. I know people shit on X's unconventional design here but holy hell did it look better then Fold 1.

And i don't see US walking back on the ban even if Biden wins.

[u/AMDisappointment]

Yep. Never buying Huawei now.

[u/afterburners_engaged]

The Huawei van is justified. Imo China has been doing this for years and years. This is China getting a taste of its own medicine. You want huawei to thrive? Open up the Chinese market and internet