The recent Executive Order by President Donald Trump to ban the parent company of TikTok(Bytedance) and WeChat (TenCent) operations in the United States of America will create a perfect opportunity for Huawei to execute it’s Double Play Strategy playbook. With it’s Hongmei Operating System, it could witness a migration of Chinese owned apps if Beijing decides to retaliate with a ban on Google’s Android Operating System operations in China. Google will be the biggest loser as Chinese applications provide more than 25 percent of it’s Playstore revenues.
Besides the Play Store revenue for Google in China, the biggest risk is this: Chinese hardware makers can abandon Android and adopt Huawei’s Harmony OS for their phones. Harmony has been developed to overcome Trump’s ban of Huawei’s access to U.S. technologies including Android. In my non data-backed estimate, more than 60% of Android smartphones sold in the developing world are assembled in China even if the logos do not carry Chinese brands. So, if companies like Tecno, Oppo, Mi and more decide to abandon Android, Google will have stress in its business model.
Of course, nothing significant changed as Huawei remains banned. Today, Huawei has a mobile OS – HarmonyOS – and now ready to take on Android. This competitive challenge will happen in phases. Yes, the speculation is over: Android has a real competitor in the developing world. Simply, if other Chinese phone makers like Tecno, Oppo and Mi band together into HarmonyOS, Android may be an endangered species in Africa. I expect them to make that call!
Yes, Google does not make a significant volume of Android hardware, unlike Apple which has exclusivity of the hardware which runs on its proprietary software, iOS. Simply, Google works with many partners for the hardware – the smartphones, smartwatches and tablets. So, if the Chinese phone makers revolt, expect the Android business model to crack not just in the developing world but also in the developed world where Android phones assembled in China are used.
The deal is this: the Chinese government does not even need to retaliate to the new ban. With Tencent included now after ByteDance, joining Huawei and ZTE, they may decide that now is the time to make the switch. So, in the near future, expect your Tecno, Infinix, Oppo, Mi, etc phones to be running on Harmony!---