Is three months to get things in order — a postponement or a formality?
After the general public became aware of the restrictions on work with Huawei for American companies and any companies that use American technology, it led to a downward movement of the stock market. The markets began to collapse not only in Asia, but also in the United States, as no one expected anything positive from this news, investors were, to put it mildly, discouraged.
And against this background, the news that there are 90 days during which work with Huawei is still possible was perceived by the market as positive news, an attempt to negotiate. Unfortunately, this is a ruse and no attempt will be made to reach an agreement. Moreover, the 90-day period was known initially from May 16, Huawei and the general public did not know about it, but the largest American companies received a warning.
Why does the U.S. need the 90 days under which the sanctions exception for Huawei applies? The answer is obvious — during this period, companies must ship to Huawei those goods and products that were produced under their contracts, receive money for them. This is a protection of the interests of American companies, but not an indulgence of any kind.
During the 90-day period, no U.S. company can enter into new contracts with Huawei and its subsidiaries. It is also forbidden to expand existing contracts. Here is an example to explain this point. Qualcomm supplies a number of components to Huawei, which in turn are manufactured in third-party factories.
Huawei pays for these components, as they are necessary for the production of smartphones, without them it is impossible to assemble the devices in the factory. Some of the components have already been produced, and the ban on working with Huawei means that Qualcomm will not be able to supply them. The same 90 days are needed for the shipments to go through and Qualcomm will not suffer as much as it could have.
But if Huawei tries to increase the volume of purchases, expand the list of components, try to create additional stock, it will be rejected, as this would be a violation of sanctions by Qualcomm. Only the execution of existing contracts and within the scope / time that are agreed. Exactly the same scheme applies to any American company, exceptions are possible only for contracts that have been approved by the US Department of Commerce. There are no examples of the US issuing such approvals in the past, and there is no reason to believe that they will now.
The founder of Huawei said that the three-month delay does not change the situation for the company, and that is absolutely true. In fact, we are talking about a safety cushion for American companies, but not for Huawei. And there is one sneaky thing that is likely to happen to Huawei here, an understatement on the part of the partners in the United States.
Purchasing components for Android smartphones is needed only in one case: if you are able to not only produce, but also then sell these devices. At the moment, Google has stopped certifying Huawei / Honor smartphones, that is, the company will not be able to get a full version of Android with GMS, respectively, and it will be impossible to sell such devices.
Inside Huawei, it is believed, and this information is broadcast to both employees and partners, that all smartphones produced within three months and delivered to retailers or operators will not be blocked by Google. That is, in the second half of August, when buying such a smartphone, the user will not encounter an activation problem, and will be able to use Google services.
But this is an unlikely scenario, because the game against Huawei is aimed at eliminating the company from the market. No one is going to leave Huawei the opportunity to sell its smartphones. It does not matter exactly what Google says or thinks, they are hostages to the situation and will have to comply with the rules of the game imposed by the U.S. Department of Commerce.
We see manipulation by Huawei management when they try to create the illusion that a plan to retain market share can work and that there are no risks involved. This is easy to do if people are willing to believe it and come from commercial motives. But this is a political decision, and Huawei will not be given a delay or an opportunity to get room to maneuver.
This is an excellent lever that the US administration will use. And there is no doubt that the purchase of components and the appearance of a stock of phones are direct losses for Huawei. Two issues are being resolved here at the same time — American companies are not losing as much money as they could, plus a financial blow to Huawei is inflicted in the future. Handsomely. And this is a reality that will happen with the maximum probability, it’s definitely not worth waiting for concessions.
Users of huawei smartphones and tablets — what to do for them and how things will be
Google’s refusal to provide anything to Huawei will result in the company not receiving new versions of Android, as well as security updates. I have repeatedly heard that this would make Huawei/Honor smartphones dangerous, for example, it would be possible to steal money from the banking app. The reasoning is stupid and irrelevant to life.
https://www.youtube.com/watch?v=UTXn6rFRfiM
Indeed, Huawei will not be able to use Android, it will stop the development of new products on this platform with Google services. In the short term, Huawei will have problems with new Android products for most of the world, the exception will be China, which uses Android without GMS. That is, at a time when other manufacturers will start showing an updated lineup of devices in late summer or early fall, Huawei/Honor will have exactly nothing. And this is a strong blow to the company’s position in the world.
But if we talk about Android security patches, they will appear for Huawei devices. This is not the kind of secret that Google keeps sacred. Yes, Google will not officially transfer such patches to Huawei, but they will not be able to prevent the company from integrating them. Especially since integrating patches into the firmware is not a very complicated process. And Google is not interested in having devices without the latest security updates.
Theoretically, you can turn on the paranoid mode and assume that for Huawei smartphones, Google can bookmark security patches that will turn them off (that is, I will turn smartphones into bricks for violating sanctions), but this is unlikely, the situation is unlikely to come to such petty.
Therefore, those who use Huawei / Honor smartphones today can safely use them, there are no problems with them and there will not be. Firmware will be released, security patches will appear. There won’t be new versions of Android, but for most, that’s not such a big hit.
For those who are planning to buy a smartphone of these brands, it is important to be able to activate it, problems could potentially begin in the second half of August, when Google will not allow them to be activated. And here everything that is on the shelves, warehouses, will actually turn into bricks, and Huawei will suffer big losses, as it will be forced to compensate this money to partners, to pick up the goods.
There are no plans to disable already sold, working smartphones. They will work exactly as they do today. So do not panic and say that the sanctions are retroactive and are imposed even against older devices, this is not true.
Considering how much this topic has become a media topic, we can say that a wave of Huawei/Honor sales on the secondary market has begun. Buyers reason that the value of such devices will soon fall sharply, they will lose in price. Therefore, they begin to saturate the secondary market with Huawei offers, which is clearly visible on a number of sites.
Retail chains are not discounting this product yet, nor are they lowering prices. Interestingly, a number of major players reduced prices on Honor literally on the day the sanctions were announced, but that’s a coincidence. The price reduction was planned, and no one could have prepared it in a matter of hours. Expectations on the part of buyers are negative; they expect Huawei to start selling out for next to nothing after being hit by sanctions.
https://www.youtube.com/watch?v=ELosh1MdEjE
Moreover, the current prices to buyers begin to seem unfair. On Monday and Tuesday in Russia, there was a week-on-week decline in sales of Huawei / Honor (by about 20%), there was no similar decline for other brands, a slight increase in sales of Xiaomi, Samsung. That is, buyers who were focused on Huawei while they took a wait-and-see attitude, pent-up demand arose.
