Huawei’s biggest obstacle to mobile phone business is not chips.

2020 is particularly difficult for Huawei’s smartphone business. On the one hand, Huawei’s inability to carry Google’s GMS on smartphones sold overseas under a trade ban signed by the US last year has severely affected huawei’s overseas smartphone sales, which would struggle to make up for the huge loss of GMS even if it launched HMS in time.

On the other hand, the U.S. government recently upgraded the ban and began to crack down on Huawei’s semiconductor business and supply chain, and there are concerns about the supply of chip chips for Huawei’s Kirin handset, raising concerns about Huawei’s mobile phone business in the second half of the year.

Of course, in this case, Huawei can’t wait to die.

Plus-code HMS, Huawei officially launched independent search app

Recently, Huawei’s launch of a search app has attracted a lot of attention.

The app was launched as early as February, when it was called Huawei Search, and has been in test for some time. But in May, Huawei Search was renamed Petal Search and launched the app store AppGallery on HMS.

Huawei's biggest obstacle to mobile phone business is not chips.

Given that Huawei’s Logo itself is the meaning of the petals, this renaming is not a big deal, pointing to Huawei.

But in addition to providing regular information search services such as weather forecasting, news, video, images, music, financial information, etc., Petal Search has new features, such as the ability to download and get recommended apps directly.

As you can see, Petal Search is more like a combination of Huawei Search and AppSearch.

Of course, the most important reason for The great media attention that Petal Search receives is that it is a mobile search engine for overseas users, and its direct competitor is the Google Search App.

This means that Huawei is getting further and further away from GMS through the eco-construction of HMS and AppGallery, and the two are competing.

Of course, this may not be what Huawei wants, but under pressure from the United States, there is no option.

HMS ambitions: three worlds with iOS and GMS

In fact, in addition to Petal Search, Huawei HMS has replaced GMS in a number of ways.

For example, here WeGo was previously launched in the AppGallery App Store, which supports navigation and positioning in more than 1,300 cities in more than 100 countries, and is thought to replace Google Maps Maps.

Huawei's biggest obstacle to mobile phone business is not chips.

In addition, combined with maps, GPS, gravity sensing, electronic compasses, cameras, etc., Huawei has launched The Huawei River Map (Cyberverse), which achieves 4 billion 3D information points per square kilometer, 1:1 restores the real world, and enables high-precision space meters, AI 3D object recognition and light and shadow tracking capabilities.

Regarding Huawei River Map, the latest news is that on May 22, Luo Wei, Chief Engineer of Huawei’s Fellow Cyberverse and Chief Engineer of Camera, announced that the Huawei River Map trademark had been successfully registered.

Huawei's biggest obstacle to mobile phone business is not chips.

Of course, HMS is also working on payments, app stores, app stores, etc.

It is worth noting that at the recent Huawei Consumer Business Summit, Huawei announced the latest developments in the HMS ecosystem, which announced:

Huawei Terminal Cloud Services (HMS) live 650 million per month globally, up 25% YoY;

More than 1.4 million registered developers worldwide (up from 1.5 million in May this year), up 115% year-on-year;

More than 60,000 applications connected to HMS Core, an increase of 66.7% year-on-year.

In Huawei’s ultimate ambition, Huawei hopes to make its HMS and Apple’s iOS and Google’s GMS separate in the global mobile app ecosystem in the next few years.

Despite this, Huawei’s overseas mobile phone business has suffered heavy losses

Of course, it has to be admitted that HMS is too weak compared to the GMS that has been in the dark for years.

In terms of the number of apps, Google’s GMS hosts millions of apps worldwide, while HMS is only 60,000, a huge gap between the two.

In terms of monthly activity, apps such as Google Search, Chrome, Gmail, YouTube, and Google Drive are the most popular apps for overseas users and have reached more than 1 billion monthly active users worldwide, making them attractive to consumers, but these apps can’t be available on HMS.

Huawei's biggest obstacle to mobile phone business is not chips.

“In other words, HMS is too weak compared to GMS to act as a substitute in the absence of GMS, but not enough to impress consumers.”

An American user named Turbofrog said:

I have a super cheap Glory 8 phone, which I bought after the last phone couldn’t be used. But…… I don’t have any interest in buying a new phone without Google Play – no matter how impressive and smooth its hardware.

In fact, Google is simply indispensable to foreigners, and it can be said to be the infrastructure that builds Internet services across the country , especially in the world of Android.

It can be said that almost every foreign Android user, I am afraid, can not be separated from google family bucket.

In this case, Huawei’s mobile phone business, which is missing GMS, will inevitably be affected.

According to IDC, a market research firm, Huawei shipped 49 million smartphones in the global smartphone market in the first quarter of 2020, down 17.1% from the same period last year .

Huawei's biggest obstacle to mobile phone business is not chips.

Among them, according to Market Research Institute Canalys, In 2020, Huawei’s shipments in the Western European smartphone market fell by as much as 40%, ranking third behind Samsung and Apple, while Xiaomi surged 79% to fourth place.

It is clear that this decline is related to the absence of GMS.

Will Huawei’s next-generation Kirin SoC be affected?

There is another concern for Huawei’s mobile phone business, in addition to the lack of GMS.

On May 15, 2020, the U.S. Department of Commerce announced that it would restrict Huawei’s use of U.S. technology software to design and produce semiconductors because of Huawei’s list of “disruptive” entities, a ban that also raises concerns that The Huawei Kirin SoC processor, which is contracted by TSMC, could also be affected.

To be precise, it’s the next generation of Huawei’s flagship SoC processor, the Kirin 1020.

However, while TSMC is widely expected to be subject to the U.S. ban, a new report suggests that the Kirin 1020 processor will still be mass-produced within a specified time frame and will be used in the upcoming Huawei Mate 40 series, according tomedia KL GadgetGuy.

Huawei's biggest obstacle to mobile phone business is not chips.

Media said the new U.S. government rules will affect future orders, but not those already placed by Huawei. According to media reports, although the U.S. upgraded the ban, it also gave a 120-day grace period, which means TSMC can still schedule 120 days of delivery to Huawei, especially 5nm and 7nm orders.

TSMC said in April that capital expenditures would remain at $15 billion to $16 billion this year, with approximately 80 percent of that going to 7nm, 5nm and 3nm processes, while the other 10 percent will be for advanced packaging and wide covers, while others will be used for special process technologies.

In addition, TSMC said it had no plans to cut its full-year capital expenditure, which is evidence from the side that TSMC does not currently use Huawei’s supply issue as a variable in its full-year budget.

In response, Cinda Securities Electronics industry chief analyst Fang Jing said:

This matter is not so pessimistic; in fact, TSMC is not completely banned, it can be internally reviewed and applied to the U.S. government for permission, and Huawei itself has made a lot of efforts, such as actively stocking, in the core devices at least half a year of inventory.

It’s worth noting that in addition to its self-developed processors, Huawei can also choose SoC processors from Samsung and MediaTek, which in an interview said in an interview that it has maintained a stable relationship with MediaTek.

It can be seen that in the hardware sector involving smartphone processors, Huawei still has enough room for survival, and its current most significant short board in the smartphone business is still HMS.

Summarize

For Huawei, the biggest theme for 2020 is survival, and the smartphone business is no exception.

For now, while Huawei is pushing hmS hard, it needs more time to grow. Of course, Huawei’s HMS and AppGallery are not free from the Android ecosystem, but just starting a new home outside of Google’s family bucket, so the application eco-problems that Huawei’s phones face overseas are not entirely unexplained.

Huawei's biggest obstacle to mobile phone business is not chips.

As for the chip, although there is a lot of uncertainty, but Huawei still has a lot of cards to play.

And from Huawei’s overall development, although the smartphone business is not the absolute core, but it also for Huawei operator skilled business and core technology research and development lost a lot of blood, and from the terminal level constitutes Huawei’s future development support, can not be lost, this Is inevitable Huawei is also aware of.

One last question:

Do you think Huawei’s smartphone business will survive the U.S. crackdown?