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2 June 2019

Huawei Shows the Chinese Internet will Win

Michael K. Spencer

In late May, 2019 something interesting is occurring. Google has suspended business activity with Huawei, activity that involves the transfer of hardware, software and key technical services. 

Huawei is being locked out of Android

However, Huawei has created its own operating system just for a case like this. This is essentially the bifurcation we are witnessing, where China’s version of the internet has begun to out-innovate the American version.

The trade war is a battle over the future of the internet. Make no mistake about this. America’s Commerce Department, which had effectively halted Huawei’s ability to buy American-made parts and components, is considering issuing a temporary general license to “prevent the interruption of existing network operations and equipment”.
Google confirms that its app store will continue to function for existing Huawei device users.
As Huawei evolves it won’t just beat Apple globally but out-smart Google.


Currently it looks like Huawei will not be able to license the Android operating system complete with Google services and will instead have to use an open-source version.

Huawei has said it has developed a ‘Plan B’, should US restrictions jeopardize its business relationship with Google. The problem is this, China’s Plan B for the world and its internet is actually a better internet. Companies like Huawei, Tencent, Alibaba and ByteDance already create a more innovative app, services, utilities and retail experience than the best American firms.

China has a “Plan B” for the Future of the Internet

Huawei’s own OS would mean the start of the point where China’s version of the internet grows up in what I think will eventually “replace” the American version where Google, Apple and Facebook have ruled for what feels like forever. We all know Huawei will rule the 5G world, it’s basically like an Apple + Cisco in the scope of its business.

The blacklisting, officially known as placing Huawei on the Commerce Department’s entity list, was one of two efforts the Trump administration this week allegedly made in an attempt to thwart national security risks. I get that. I do, but the POTUS won’t even likely be alive to see the Chinese internet replace the American version, as it might take as long as twenty years, so circa 2039. But as a futurist, I see this is a critical moment in technology’s history that motivates that to take place.

The United States believes Huawei’s smartphones and network equipment could be used by China to spy on Americans. Chinese companies must comply with any request of the Chinese Government to use whatever means necessary to catch up to America technologically, and of course will continue to do so.

Huawei is one of the pivotal companies in China’s rising tech dynasty that will scale to heights no American company outside of Amazon is even capable of attaining. However Alibaba and ByteDance both have chances of becoming such companies as well. Even Tencent could be in that category as well one day. If ByteDance’s TikTok app has been taking market share away from Instagram in Asia, you can imagine how quickly this could all occur.
The Bifurcation of the Internet Means China Wins

China’s version of surveillance capitalism or the data state is far more advanced than the United States’. Remember, they own the majority of the top facial recognition startups. China is also superior in offline to online convenience. It’s only a matter of time before China starts to win not just in apps, but in the Cloud and with a superior economic, techno-machine-intelligence system.

The U.S. tech giant has decided to stop licensing its Android operating system to the Chinese telecommunications firm, in order to comply with a U.S. trade blacklist. But if you haven’t noticed recently, Google, Facebook and Apple aren’t exactly innovating at a frantic speed. In 2019, Chinese innovation has overtaken Silicon Valley. The battle with Huawei only puts this inevitability under the spotlight. America can stall China, but China is the heir apparent in the global economy, technology, artificial intelligence and how the future of the state itself evolves.

China has developed a proprietary OS, Alibaba is in the smart home and the Cloud, ByteDance is the most innovative company in apps, Meituan is the leading delivery centric super-app, Tencent’s WeChat is the most ubiquitous app. Meanwhile Apple and Facebook are mostly pivoting to some kind of encrypted walled garden internet, not exactly very fresh or innovative, more just like monetization strategies.

Huawei is a state-backed company of China’s nationalism and New China’s spirit. You can blacklist it in the U.S., but the rest of the world knows what China will become.

Huawei has been growing at explosive speed around the world over the last year. In the first quarter of 2019 it shipped 59.9 million smartphones, according to analysis firm IDC — selling an average of more than 660,000 phones every day. Huawei is one of China’s most global companies, but it won’t be the last.

Google’s full compliance with the US order could mean that future Huawei devices will lose access to Google services including the Google Play app store, as well as popular apps such as Gmail and YouTube. This will also force Huawei and China down a different path, with the result likely the development of an internet that is just superior to the American global version (what I’ve called the Western internet). China’s great firewall might turn out to be brilliant.
Huawei has 24% of the smartphone market share, two thirds which comes outside of China. Huawei doesn’t need America to win.

Out of $70 billion Huawei spent for buying components in 2018, some $11 billion went to U.S. firms including Qualcomm, Intel Corp and Micron Technology Inc. Essentially Huawei already operates at such scale that the U.S. blacklisting it just means it will re-double efforts in global areas outside of the U.S. China cannot and will not be stopped. The bifurcation of the internet is coming, and it’s only a matter of time.

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