Can 40% sales pressure hit $1 billion HMS save Huawei?

Recently, Huawei pre-installed Huawei AppGallery (Application Market) and HMS Services (Huawei Mobile Services) on Mate Xs and Glory V30 and X9 released overseas. This is the most critical step Huawei has taken since it formally proposed the construction of the HMS ecosystem in August 2019.

Sina Technology Zhang Jun

“HMS is going to be one of the world’s consumer favourites in the future, taking a year or less to walk the path that others have been through for years to come. “Glory President Zhao Ming describes the objectives of HMS Ecology in this way.

In fact, Huawei and Glory face a tough test in overseas markets as Google’s GMS service continues to be banned. In 2019, 100 million of the company’s 240 million global smartphone shipments will come from overseas markets. The success of HMS Eco also determines Huawei’s strong position in the global smartphone market.

GMS services missfor months 40% of businesses at risk

Huawei’s mobile phone products will not be able to pre-install Google’s GMS service since it was added to the u.S. list in May 2019.

Google’s Android system has long been open-source for mobile phone makers, but its GMS service has allowed Google to make a steady stream of commercial profits from Android.

The GMS service includes Google’s family-of-the-day apps such as Google Play, Google Search, Google Maps, Google Drive, Google Mail, Google Video (Youtube) and so on. Not only do these apps have billions of users worldwide, but many apps commonly used by overseas users, such as Facebook and Twitter, need to be downloaded through Google Play and rely on the GMS service framework to run.

Huawei’s overseas sales were hit by a huge impact after news that GMS services could not be used on Huawei’s mobile phones.

At the time,media reported that, as a result of the ban, Huawei’s mobile phone shipments in overseas markets in 2019 are expected to decline by 40% to 60%, according to the 2018 Huawei mobile phone overseas market shipments, in 2019 overseas market shipments are expected to drop by 40 million to 60 million units. Huawei founder Ren Zhengfei later confirmed that shipments of Huawei’s handsets would fall by 40% in international market.

Huawei has also taken a variety of measures to deal with it.

The first is to increase investment in the domestic market. Mr Yu once set a target: one for every two smartphones sold in the Chinese market was Huawei, meaning Huawei’s goal in the domestic market was to achieve a 50 per cent market share. Huawei launched a “cross-river campaign” in China, requiring Huawei’s off-line core channel providers to account for 50% of its total sales of its end-user products, including mobile phones. At the same time, the effect of this measure peaked in the third quarter of 2019 due to the high patriotic enthusiasm of domestic consumers: According to IDC, Huawei shipped 41.5 million units in the third quarter of 2019, up 64.6% YoY and 42% of the market share. But by the fourth quarter, Huawei’s market share had fallen to 38.5 per cent as capacity in the domestic market plummeted.

Can 40% sales pressure hit $1 billion HMS save Huawei?

Huawei’s global shipments fell 7.1% YoY in the fourth quarter of 2019

Relying solely on the domestic market is not a long-term solution, after all, it is still facing fierce competition from Xiaomi and OV. Meanwhile, Huawei’s global shipments also fell by a rare 7.1% in the fourth quarter of 2019, while 100 million of Huawei’s 240 million global shipments in 2019 came from overseas markets, accounting for more than 40%. Huawei’s position as the world’s second-largest smartphone will also be under threat if GMS services continue to be missing in 2020.

This has also prompted Huawei to step up THE construction of HMS to cope with the lack of GMS services in overseas markets.

Cast to smash money to “make up loopholes” HMS finally pre-installed to Huawei phone

In August 2019, Huawei hosted the 2019 Developers Conference at its Songshan Lake base in Dongguan, bringing together more than 6,300 developers from around the world. At the meeting, Huawei officially released its own HarmonyOS operating system and announced the full opening of HMS Core Services to build the HMS ecosystem for the world. Zhang Ping, president of Huawei’s Terminal Cloud Services, said Huawei would invest $1 billion to support developers to join HMS Eco, of which $800 million will be targeted at overseas developers.

HMS is undoubtedly designed to target Google’s GMS services, including Huawei Cloud Space, Huawei Smart Assistant, Huawei Application Market, Huawei Wallet, Huawei Video, Huawei Music, Huawei Reading and other Chinese as the core applications, can be replaced by Google’s GMS service. At that time, Huawei opened 14 HMS Core capabilities, 51 services, 885 API basic sits. The number of registered developers worldwide has grown to 910,000, and the number of applications connected to HMS Core exceeds 43,000 worldwide.

Although one Huawei insider said the launch was actually a hasty event, “the PPT and materials were prepared overnight.” “But it has already put a lot of manpower and money into Huawei, just three months after the ban was imposed.”

Can 40% sales pressure hit $1 billion HMS save Huawei?

Huawei Internal Mobilization Order

It is reported that after the may 2019 ban, Huawei set up an emergency HMS Eco-Project Group to launch the HMS Conference. The project team recruited personnel from different departments to participate in the development of HMS services, while Huawei’s 2012 laboratory and other departments also helped to develop related technologies.

Huawei launched a call to the inside, “After 516 we entered the dark moment, this time we need Sparkle, lit a spark to guide us forward.” Consumer cloud services formed the Sparkle Hero Team with the goal of building a leading terminal cloud service HMS ecosystem. Ren Zhengfei also took a position inward, the U.S. restricts Huawei’s use of Google’s GMS ecosystem, involving tens of millions of partners, and Huawei can’t replace it in a day or two.

Can 40% sales pressure hit $1 billion HMS save Huawei?

Huawei 2012 Lab recruits HMS Map Experts and Search Engine Experts

The Riemann Labs, part of Huawei’s 2012 Labs, has also opened up recruitment for Huawei’s HMS map/positioning platform, saying it will help the company solve strategic survival and strategic development issues in the area of mapping and positioning at a technical level. At present, Liman Lab Director by Wuhan University Institute of Remote Sensing Information Engineering Associate Professor Sun Mingwei, Wuhan University’s remote sensing discipline ranked first in the world on many occasions, the Central Software Institute to recruit general search / location search technology experts, the job responsibility is to lead Huawei’s general search system architecture design, technological breakthroughand and commercial landing, to create the world’s leading intelligent search engine.

“Support will fight, overtime than the original department a grade higher. “One Huawei employee involved in the fight said in an internal forum. Another employee revealed that “the boss (Ren Zhengfei) have gone a few times, Xiao Xu (Huawei Chairman Xu Zhijun) there is also an office.” It can be seen that Huawei’s senior management attaches great importance to the project.

After months of intensive research and development, in January 2019, Huawei launched HMS Core 4.0, a version that added a number of new capabilities, including machine learning services, context-aware services, unified scour services, close-up communications services, in addition to previous Huawei accounts, payments, analytics, cloud space, games, advertising, and location services. Security detection services, location services, fast application services, digital rights services, sports health services, user identity services. This also means that HMS services are maturing further.

It is reported that Huawei had planned to launch HMS Core 4.0 at the MWC2020 in February this year to further attract developers from around the world to the HMS Ecosystem. With the cancellation of MWC2020, Huawei continued to hold a launch conference in the form of live online broadcasts, and it is not known how this will affect developers worldwide.

But HMS Eco has made significant progress compared to six months ago. According to Yu Chengdong, CEO of Huawei’s consumer business, Huawei now has more than 1.3 million registered developers worldwide and more than 55,000 applications connected to HMS Core worldwide. Huawei AppGallery has become the world’s top three application markets, with 210 billion app downloads in 2019 and more than 400 million monthly active users worldwide.

At the launch in Barcelona, Huawei’s HMS Eco was the most critical step in the official overseas appearances of the Huawei AppGallery and HMS Huawei phones Mate Xs, The Glory V30 and X9. It is reported that the future release of Huawei and Glory mobile phones will be fully pre-installed with their own HMS services.

Can the rival ingress with Google’s Apple HMS help Huawei regain lost ground?

Yu Chengdong said, HMS Ecology and Google’s Android Eco and Apple Eco three-legged stand-in. In its internal mobilization order, Huawei said HMS would challenge industry-leading competitors in areas such as AppGallery, Smart Assistant, Maps, Search and Advertising Platform.

Huawei has been gradually refining the various chains of HMS ecology, such as on the map, which was certified as a domestic Class A mapping officer in July 2019, and in January this year it reached an agreement overseas with TomTom, a Dutch navigation and digital mapping company, to use its maps and services in Huawei’s smartphone applications. Recently,media have revealed that Huawei is testing the “Huawei Search” application to replace Google search, advertising platform is also an important part, how much direct benefit developers can get is the most important factor in determining how their attitude towards Huawei’s HMS ecology is. HUAWEI Ads gives developers 90% of their revenue by 1:9 percent for the full year 2020. In 2021, developers will receive 80% of the revenue from the 2:8 split. The subsequent platform base is divided into 3:7. That’s a good comparison to Google and Apple.

Can 40% sales pressure hit $1 billion HMS save Huawei?

Huawei’s advertising platform for developers to share the scheme

But the fledgling HMS Eco is still not the same as Google and Apple, which have been operating for years.

In terms of the number of developers worldwide, Huawei’s HMS Eco has 1.3 million, Apple’s developers have exceeded 20 million, China has more than 1.8 million, and Google’s Android has more developers than Apple; Play had more than 1 billion live users in 2017 and Apple’s App Store by more than 1 billion users worldwide in 2018.

Also as a model for the former car, the dominant PC operating system of Microsoft has pushed the Windows Phone phone system suffered a fiasco, the global smartphone king Samsung intends to build its own Tizen system has not budged, domestic internet giant Ali has also launched a CloudOS for mobile phones, It later changed its name to AliOS and shifted its focus to IoT. The root causes of the failure of the big three are the lack of ecology and service construction.

“HMS Ecology needs to be based on the long term, constantly polishing and gradually fostering consumer awareness and goodwill about HMS. “Glory President Zhao Ming admits that compared with Google’s GMS service, HMS’s overseas ecology does take a step from start to building to shouldering, and Huawei and Glory are now focusing on making up for each short board with the fastest time and speed.”

Although the HMS ecosystem is just beginning, Huawei is not without opportunities, Anxin Securities said in a research note for Huawei’s HMS. One is that based on Huawei’s advantages in mobile phones and IoT, high market share of its own hardware terminals will provide a good user base for Huawei to promote HMS services, and the second is to actively explore GMS weak national market with the domestic market as the basic disk. Domestic users have long used domestic manufacturers to modify customized Android systems, does not include Google GMS services, is conducive to Huawei’s HMS services development. Since the end of last year, Huawei has held a number of developer events in the Middle East and Africa, India, the United Kingdom and other places to attract developers from all over the world to join HMS Ecology. Huawei’s plan is that in the future, Huawei DeveloperConference will also hold a series of events in Europe, the Middle East, South Africa, Latin America and other places.

In his New Year’s letter in 2020, Mr Yu said overseas HMS services should take survival as the bottom line and give priority to solving overseas ecological problems. Do not pursue short-term commercial interests, with a few years to gradually restore the total amount of overseas business.

It is clear that the construction of HMS Ecology will not happen overnight. The pre-installed Huawei AppGallery and HMS services are just the first step in Huawei’s long journey to build HMS Eco-Wan.