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00:00All right, we got a lot to talk about.
00:15Hey, what's up guys?
00:16MKBHD here, and you may have recently seen some version of the news that Huawei was cut
00:21off from Google and now all their Android devices are in limbo, but clearly there's
00:25a lot more to it.
00:26This is a super complex topic with policy and timelines and a whole bunch of moving
00:32parts, so I clearly didn't rush this video out.
00:35I wanted to actually take my time to summarize this topic, but here we are.
00:39So this is everything you need to know so far in one place.
00:43So Huawei, in case you didn't already know, based in China, huge company, absolutely massive,
00:49and they have all kinds of businesses in tech.
00:51They sell networking equipment, they sell computers, and they sell, most notably, smartphones.
00:57They are the number two largest by market share smartphone vendor on planet Earth, second
01:02only to Samsung, and right above Apple.
01:05So as you may have heard or read in the news over the past few months, the US and China
01:09have been escalating this trade war from both sides, plus there's been a history of security
01:14concerns over the potential of US companies buying Huawei networking equipment and then
01:19possibly getting spied on by the Chinese government.
01:22US government agencies were even banned from buying Huawei phones at all.
01:26So no matter how you view those things, either way, Huawei's status in the US has been pretty
01:30shaky for a little while now for various reasons.
01:33They knew it.
01:34We knew it.
01:35That's just the climate we're in.
01:36So the big new news now is that the US government signed an executive order into effect that
01:41added Huawei to effectively a blacklist of companies that are restricted from doing any
01:46business with any US company at all, period.
01:50It's been worded a bunch of different ways, but that's basically what went down.
01:53And now the implications from that have run far and wide.
01:57I mean, nothing's really rocked the tech world quite like this in a little while.
02:01So the biggest, most obvious headline from this is Google.
02:05They're a US company.
02:06Huawei does business with Google.
02:08They make Android phones.
02:09So when this executive order came out in response, Google complied by stopping all business with
02:14Huawei and pulling their license to use Android.
02:17That wasn't like a choice they made or a decision they had, really.
02:19They're just complying with the executive order.
02:21Google's in the US.
02:22Huawei is not allowed to do business with any company in the US, so they can't be sold
02:26any software or any licenses.
02:29So they can't use Android.
02:30So this is, of course, terrible news for Huawei, who, by the way, was the fastest growing smartphone
02:35manufacturer in the world.
02:37They were coming up quick on that number one spot.
02:39So now the big question we're all wondering is what does this mean for the past, the present,
02:45and future Huawei devices?
02:47So for Huawei devices, past and present, like if you own a Huawei phone like me, like a
02:51P30 Pro, or you're thinking about getting a P30 Pro or a P30, here's the deal.
02:56First of all, they were issued a 90-day exemption, so they will be able to continue sending software
03:01updates and security updates to existing Huawei phones for the next 90 days into August.
03:06So that sort of softens the blow a little bit, I guess.
03:08And I do believe this also includes Honor, by the way.
03:12Honor being a brand that's owned completely by Huawei, a sub-brand of them.
03:16But Honor and Huawei phones are all sort of under the same umbrella.
03:20So these phones will all still work, and they'll still keep getting software updates.
03:23And also Google tweeted from their Android account that while they comply with US government
03:27requirements, services like Google Play and security from Google Play Protect, they will
03:31keep functioning on your existing Huawei device for now.
03:34But these phones, if things stay the way they are basically, these phones will most
03:40certainly stop getting software updates.
03:44Like even if you're not in the US, no matter where you are, if your Huawei phone runs Google
03:48services, those will stop, and these phones will not get the latest version of Android.
03:54Basically at the end of this 90-day extension, whatever software version these phones have
03:58is the one that they'll have for the rest of their life, which is definitely not ideal.
04:04So what does Huawei do from here?
04:07Like what can Huawei do about their future phones?
04:11And can Huawei even make future phones without any US business help?
04:16Fun fact, they spent $70 billion buying components for hardware last year, $11 billion of that
04:23went to US companies like Qualcomm, Intel, et cetera.
04:26And actually Ars Technica has posted an article with a pretty good breakdown of all the parts
04:30and components that Huawei's been buying to make their smartphones, and a lot of them
04:34come from US companies.
04:36The Gorilla Glass, the flash storage, some radios, et cetera, all from US.
04:41From looking at this list, it doesn't seem totally unrealistic that, I mean they don't
04:45want to obviously, but they seem like they could totally switch all of their suppliers
04:50from US companies to others to get around this.
04:54It's not what they want to do, it involves spending a lot of money and doing a lot of
04:57work, but they're one of the few OEMs that doesn't rely on Qualcomm for their silicon.
05:01They make their own Kirin 980 chip for the Mate 20 Pro and the P30 Pro.
05:06So in theory, with a lot of effort, they could keep making these physical phones.
05:11And also Bloomberg has reported that Huawei has built up a three month stockpile of the
05:15parts they like to use ahead of this ban, which is actually pretty impressive.
05:20But even if they did replace all of these hardware suppliers with alternatives in the
05:25next 90 days, the software is still the big question.
05:29How do you make a phone without Google, without the Android license, and without the Google
05:35Play Store?
05:36Technically Android itself is open source, just bare bone stock Android is just an open
05:41source project, which has led many to speculate you don't need a license, you don't need to
05:45do business with Google to just use AOSP.
05:49So they could use bone stock Android, but that's not ideal because even that is further
05:53and further from the version Google uses every day.
05:56And that still doesn't include things like Google services, Gmail, YouTube, it's just
06:02not ideal.
06:03The more I read into it, it turns out Huawei has been sort of quietly bracing themselves
06:06for something like this for a while.
06:09Similar to Samsung, they've recognized their reliance on Google and Google services as
06:14a bad thing.
06:15So they've been slowly building things behind the scenes to be able to get ready to replace
06:19them.
06:20They've been working on a backup OS that supports Android apps, and they've been working
06:24on building their own app store.
06:26The problem is that is an immense challenge to try to get people to use an alternate OS
06:34and an alternate app store, especially if it doesn't look exactly the same as the one
06:37they're used to, especially the app store.
06:39And if you can't do business with US companies, you can't expect to be able to negotiate your
06:43way into getting the Netflix's and Pandora's and Facebook's and Instagram's on your alternate
06:49app store.
06:50And even if you can, we've seen others like Amazon try.
06:52You've seen the Amazon app store, right?
06:56Amazon's a multi-billion dollar company, and the sad version of an app store that they
07:00have is nowhere near a replacement of the ones that we're used to.
07:04So it's a super massive challenge to try to build up your own app store out of nowhere.
07:10So this spells a lot of work for Huawei.
07:13Like it shows how big of an impact just getting cut from your ties with Google can have on
07:17your business.
07:18So with this coming, they've known that this is possible, but now that it's happened, it's
07:21awful.
07:22So the way things stand now, they could, in theory, after the 90 days is up, continue
07:26to make phones entirely through non-US companies, but those phones wouldn't have Android.
07:34They wouldn't have the Google Play services, which are crucial, and they wouldn't have
07:38the Google Play store.
07:39It's tough.
07:41And of course, it's not just Google that they're cut off from.
07:43Like that's the big headlining one because they make a lot of Android phones, but there's
07:47plenty of other US companies that they do business with, Microsoft, Intel, Nvidia.
07:53Huawei has been making laptops, and pretty good ones, mind you, competitively for a while
07:58now.
07:59But as far as I can tell, they can't keep making Windows laptops without doing business
08:05with Microsoft and Intel and Nvidia and these companies.
08:10That's brutal too.
08:11So as a person that really likes tech, all of this news is terrible because having one
08:16less company means less competition, which is less incentive for these companies to work
08:21hard and make great stuff.
08:23I mean, we've seen it ourselves with how good their phones have gotten lately and how good
08:26they've made all the phones around them.
08:28Even if you're not a fan of Huawei, or if you don't like their stuff, we have to admit
08:31that having them around is good for consumers.
08:35It's good for us.
08:36And also side note, if you think about it, this is also pretty bad just specifically
08:40for folding phones.
08:42Like the Galaxy Fold kind of just had its own PR nightmare all by itself over there
08:46for a couple weeks, which sort of turned people's heads to the other folding phone that would
08:51be coming to market soon, which was going to be the Huawei Mate X.
08:56But now, I mean, what if it can't even run Android?
08:59But hey, Huawei is, like I said, a huge company, like a really huge company.
09:04So I guess if anyone can recover from such a massive setback to multiple parts of their
09:10business, I guess it's them.
09:13I mean, this is not ideal at all.
09:15Their ideal case would be the government renegotiates things and they reverse the executive order
09:20and things go back to normal.
09:22But in the case that that doesn't happen, at least they have billions of dollars to
09:26try something.
09:27But even if they do come back, if you think about it, the bigger damage might really just
09:31be the way people think about Huawei as a company to potentially buy products from.
09:36You know, their reputation isn't exactly great, especially in the US.
09:40So now, good luck trying to convince someone to spend $1,000 instead of an iPhone on a
09:44Huawei phone that doesn't even have the Play Store or run Android anymore.
09:49That's a tough sell.
09:50If you look back, a very similar situation happened to ZTE in 2018, last year.
09:55They got cut off from all their US business relationships and they were never the same.
09:59They didn't exactly come back strong from that.
10:01But Huawei is this Goliath.
10:03So I'm thinking things will go a bit differently this time, or at least I'm hoping things will
10:08go differently for the sake of competition.
10:11But to be honest, this whole situation is far from over.
10:14These things evolve, they change over time.
10:16I wouldn't be shocked if this whole thing was reversed in the next couple months just
10:20because that's sort of the way things have gone recently.
10:22But as of right now, we're just kind of in this unsatisfying limbo as we speculate about
10:27Huawei's future.
10:29But that's basically all there is to know right now.
10:32There you have it.
10:33So that's been it.
10:34I'll leave all the links for all my sources down below in case you want to read up on
10:37this yourself.
10:38And of course, feel free to share this video for anyone who might be headline reading or
10:42curious about the situation Huawei's found themselves in right now.
10:46And I'll catch you guys in the next video.
10:49Peace.