Huawei is settling into life without the US thanks to the Trump administration’s export ban, and so far the company seems to be adapting. According to a new report from The Wall Street Journal, Huawei’s latest flagship smartphone, the Mate 30, contains zero US parts. The Journal has access to an analysis from UBS and Fomalhaut Techno Solutions, which tore apart the phone and found manufacturers for each component.
No US components is an improvement over Huawei’s previous flagship, the P30 Pro. We did our own version of this analysis back in May for the P30, where we looked over teardowns for US components. The P30 Pro is Huawei’s previous flagship smartphone, and while it was designed and launched before the US export ban, it still didn’t have a heavy reliance on US manufacturers. Huawei says it has been working to reduce its reliance on US companies for some time, with Huawei’s deputy chairman, Ken Hu, writing in May that “The company has known [a US export ban] could be a possibility for many years. We have invested heavily and made full preparations in a variety of areas, including R&D and business continuity, which will ensure that our business operations will not be greatly affected, even under extreme conditions.” So far, Huawei’s preparations seem to be working.
On the older P30 Pro, Huawei already had its own SoC, thanks to its HiSilicon chip design division. HiSilicon was also responsible for several smaller chips, like audio, the RF transceiver, power-management, and mid-band 5G chips. From there the P30 components were a whirlwind tour across the world: a display from BoE in China, cameras from Sony in Japan, RAM from SK Hynix in South Korea, an NFC chip from NXP in the Netherlands, and a battery from Huizhou Desay Battery Co. in China. The biggest US components were the flash memory from Micron, LTE antennas from Skyhook and Qorvo, and SMPS (switched-mode power supply) chips from Broadcom.
With the export ban in place, finding alternative, non-US suppliers for these parts apparently wasn’t a big deal. Flash memory can be had from Korea (Samsung) or Japan (Toshiba). The chips from Skyhook and Qorvo have been replaced with in-house HiSilicon versions.
Like we wrote back in May, hardware isn’t Huawei’s problem. The big problem is software and apps. No one can really stop Huawei from using open source Android as the base OS, but it can’t license the Google apps, which means no Play Store, Gmail, Google Maps, YouTube, or any other Google service. Huawei won’t get Android’s primary app store, and it won’t get apps from any US developers, like Facebook (which owns WhatsApp and Instagram), Netflix, Amazon, Twitter, Uber, Lyft, and a million others. Most of the top app list would be off-limits. Huawei is trying to push its own Android ecosystem with replacements for Google apps like the Play Store, and longer-term it’s trying to develop its own smartphone OS. But as Steve Ballmer will tell you, what really matters is “developers developers developers developers.” It’s illegal for most of the biggest app developers to ship in the Huawei app store.
The Journal quotes analyst Handel Jones, president of International Business Strategies Inc., as saying “Independence of US supply indicates that the strategies of the US in trying to isolate Huawei are not working.” Software is the one thing the US can really hold over Huawei, and the biggest consequence of the export ban so far has been the Mate 30 shipping without Google apps. The lack of Google apps doesn’t even affect Huawei’s biggest market, its hometown of China, which doesn’t have the Google apps to begin with. Outside of China, research firms IDC and Canalys have Huawei losing anywhere from 12% to 17% of overseas shipments in Q2 and a further drop of 6% in Q3.
The United States has considered stronger sanctions against Huawei. According to a report from Reuters, the White House is considering kicking Huawei out of the US banking system. This would involve putting Huawei on the Treasury Department’s “Specially Designated Nationals” (SDN) list, which, according to the report, would “make it virtually impossible for a company to complete transactions in US dollars.” Currently the list houses Russia’s Rusal aluminum company along with some Russian oligarchs, Iranian politicians, and Venezuelan drug traffickers. Putting Huawei on the SDN list is considered “a nuclear option” by US officials, but so far they aren’t launching the nuke.
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