Chinese telecoms giant Huawei is launching its HarmonyOS operating system for smartphones on June 2 in an effort to claw back ground in the global market.
The move, announced yesterday, is the latest attempt by the tech giant to shake off the effects of being caught up in trade tensions between the United States and China.
In May 2019, the Trump administration, citing national security risks, stopped Huawei and dozens of its affiliates from buying American parts and technologies, placing them on a trade blacklist.
The ban meant that Huawei’s new smartphones could no longer be bundled with popular Google apps, such as Gmail and YouTube. They also could not access Google’s Play Store, which meant users were unable to download the apps.
Sales of Huawei’s smartphones suffered as a result, particularly outside China. Huawei fell three spots down global sales rankings to fifth position between January and March this year, according to market research firm IDC.
Associate Professor Lawrence Loh of the National University of Singapore Business School said it was necessary for Huawei to roll out HarmonyOS for its smartphones. “The new smartphone operating system will lift the company’s, or even China’s, mobile technology ecosystem to match the global dominant players like Google and Apple,” he said.
HarmonyOS is an operating system designed for a variety of devices, including smart wearables and tablets. It is also expected to work with third-party vendors.
Huawei is also looking to grow its software business to ease pressures caused by the US sanctions, Reuters reported on Monday.
Quoting an internal memo, the report said Huawei founder Ren Zhengfei urged staff to “dare to lead the world” in software.
Mr Ren said in the memo that the company was focusing on software because future development in the field would be fundamentally “outside of US control and we will have greater independence and autonomy”.
On Monday, Huawei reiterated that it would not be manufacturing cars, following recent reports that it was in talks with carmakers. The company dismissed all such reports as rumours.
Prof Loh, who is also the director of NUS’ Centre for Governance and Sustainability, said: “Huawei’s declaration that it will not go into automobiles is strategic. It will encourage other automobile makers to adopt HarmonyOS without fear of competition.
“It will also allow Huawei to focus on software and its widespread global acceptance by all device makers.”
Huawei raked in record profits last year, with net profit rising 3.2 per cent to 64.6 billion yuan (S$13.4 billion) amid the Covid-19 pandemic. Sales in its consumer electronics division, which accounted for more than 50 per cent of revenue, grew 3.3 per cent.
Its revenue, however, fell 16.5 per cent in the first quarter of this year, from a year ago, hurt by a dip in sales after selling its budget smartphone unit Honor in November.
But net profit margin rose 3.8 percentage points, from a year ago, to 11.1 per cent, as the company cut costs and received a boost from US$600 million (S$795 million) in royalty payments.
