Huawei Will Launch Android Alternative OS In August; Reports Surprise Revenue Increase

Via Zerohedge…

Huawei Technologies, the world’s largest telecommunications equipment supplier, is set to launch its HongMeng operating system (OS) as a potential alternative to Google’s Android OS, on August 9 at Huawei’s Developer Conference, industry insiders told the Global Times Wednesday.

According to media reports, the user experience (UX) design features a brand new ringtone and notification panel, a cleaner interface for the camera, more animation and faster speed. Users can also add widgets and personalize the locked screen. Citing industry experts (most likely of Chinese origin), the Global Times reported that “it is possible for Huawei to build a sustainable smartphone ecosystem on the HongMeng OS and reshape the current market dominated by Android and Apple’s iOS”, although the new system is primarily designed for industrial automation and applications in the Internet of Things (IoT).

“Given the design features of the HongMeng OS, it can be a game changer in IoT-related areas, such as driverless cars and smart homes,” Fu Liang, a Beijing-based independent industry analyst, told the Global Times.

According to Huawei’s website, the HongMeng OS is built with a processing latency of less than 5 milliseconds, which is especially required in circumstances involving IoT applications that often need to transfer large amount of data simultaneously.

That said, broad consumer adoption is unlikely at first: “It’s not designed for phones as everyone thinks,” Ren Zhengfei, founder of Huawei, said in a recent interview with the French magazine Le Point.

However, the company could still resort to the HongMeng OS as it may be wary of the threats coming from the US, and it still can be very competitive, according to experts. “We haven’t decided whether to develop Hongmeng into a smartphone OS yet,” Liang said. He added, however, this position may change if the US completely bars Huawei from access to Android.

“One key advantage of the HongMeng OS is that the Android apps don’t need to be recoded to run in the system,” Fu said. “As it is reportedly 60 percent faster than Android and iOS, more smartphone makers such as Xiaomi and Oppo will be likely to install the OS in their phones.”

On the other hand, as a new OS that’s almost 10 years younger than Android, HongMeng is currently lacking a robust ecosystem that Huawei will need to cultivate and sustain, Fu noted.

That said , should the new OS gain widespread adoption, it could grant Huawei even greater influence than before: according to statistics by statcounters.com, as of June 2019, Android had more than 76 percent of the mobile OS market and iOS had more than 22 percent, leaving less than 2 percent to other systems. But Huawei is encouraging app developers to join its app store, called AppGallery, to build its ecosystem.

To be sure, recreating Apple’s ecosystem will be a monumental task: “All Huawei smartphones are installed with our official app store AppGallery with more than 270 million monthly active users… To guarantee full support for your app, it is an invitation for you to join our developers’ community and portal,” said the email.

“It is hard to estimate if the new OS is put into use, exactly how many customers will switch to HongMeng in the short term,” said Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance. “But given time, I see no reason Huawei cannot take up a significant share of the market if it decides to. The millions of users of Huawei are too big to miss out for developers. As more apps operate in the system, more developers will join to build a robust ecosystem.”

And in separate news, overnight Huawei reported a surprising revenue increase for the first half of this year, despite the US government-imposed trade ban and continued scrutiny overseas about the security of its 5G network products.

Surprising industry watchers, company chairman Liang Hua said that “Huawei’s entire businesses ran smoothly [since that ban],” although he declined to provide specific figures at a press conference in Shenzhen on Friday.

The privately held company – which according to many has extensive connections to the Chinese government – which is expected to announce its financial performance for the first six months of this year on July 30, was put on a trade blacklist – known as the Entity List – in May by the US Department of Commerce, citing national security concerns. That has effectively barred the firm from buying hardware, software and services from its American hi-tech suppliers.

“Adding Huawei to the Entity List was neither justified nor fair,” Liang said. “It is not enough to ease restrictions on some US suppliers. We should be removed from the list entirely.”

Liang’s comments followed the announcement by US Commerce Secretary Wilbur Ross on Tuesday that Washington will allow American companies to sell their products to Huawei so long as these would not pose a threat to national security, a move which many saw as an attempt to mend relations between the US and China, however it was quickly followed by two major escalations, when first the US greenlighted the sale of $2.2 billion in weapons to Taiwan, which prompted Beijing to threaten the companies involved with new sanctions, while overnight Trump lamented that the agricultural purchases promised by China during last month’s G-20 summit have yet to materialize.

The stakes are high for Huawei because the US trade ban was earlier estimated to wipe out US$30 billion of sales growth, according to SCMP. Its total revenue was expected to remain stagnant at around the US$100-billion level this year and in 2020, according to company founder and chief executive Ren Zhengfei during a panel discussion in Shenzhen on June 17.
Ren said last week that the US decision to relax the trade ban on Huawei will not have much impact on the company.

Meanwhile, on Tuesday Monaco became the first country in Europe to launch a 5G network supplied by Huawei, despite US pressure on its European Union (EU) allies to ban the Chinese company’s equipment from their roll-out of next-generation mobile infrastructure over security concerns.

EU countries are expected to agree on collective measures to deal with potential spying risks from equipment made by Huawei by the end of this year, according to advisory body the European Economic and Social Committee. Many Southeast Asian nations – including Singapore, Thailand, Malaysia, Indonesia and the Philippines – have been reluctant to bow to US pressure and sever ties with Huawei.