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Huawei vs the US: A timeline

An FAQ on Huawei’s problems

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Who’s afraid of Huawei? Right now, everyone is. Does anyone really know why?

Since 2017, the US has dealt continuous blows against the Chinese company. More than two years later, the war is still in full swing. Both sides have fired multiple salvos against the other. Still, despite the conflict’s longevity, most people are not really sure what’s happening.

Why are they fighting? Should we stay away from Huawei? Is it time to get rid of our Huawei devices as soon as possible? Should we really fear for our cybersecurity?

For ordinary consumers, the entire Huawei debacle is mired in political lingo and endless controversy. It’s time to clear the air. What’s up, Huawei?

How did this all begin?

Let’s go back to where it all started. In late 2017, American lawmakers reviewed the businesses of ZTE, another Chinese tech company. Soon after, the investigation unveiled a flurry of shady business deals involving Iran. By law, companies operating in the US are not allowed to communicate with blacklisted countries including North Korea and Iran. Naturally, the violation caused monumental sanctions against ZTE. The US banned ZTE from American soil — effectively, the same ban on Huawei today.

At this time, Huawei was just a moderately innocent passerby stuck between two fighting giants. At most, Huawei was accused of spying on its customers. American lawmakers proposed a boycott of Huawei’s products. The proposal drew from the emerging rise of Sinophobia. Still, at the time, the US government’s eyes were firmly on ZTE.

Current restrictions prevent Huawei from providing 5G technologies to American consumers

In its infancy, the Huawei-ZTE issue was a product of a small fear. It still hadn’t affected everyone. In fact, US President Donald Trump even tried to save both companies from utter destruction. Both companies enjoyed a reprieve from America’s ire. However, this was short-lived.

In a surprising about-face, Trump started his controversial trade war against China. The American leader abandoned his salvific efforts. Instead, he adopted an incredibly aggressive push against Chinese companies. Unsurprisingly, ZTE already crumbled from the initial push, leaving Trump without a company to make an example out of.

Trump set his sights on Huawei, the world’s second largest smartphone maker. His weapon: the same ban meant for ZTE. His motive: potential cybersecurity issues. This time, America means business. Recently, Trump finally pulled the trigger, enacting a total ban against Huawei on American soil. However, instead of just the US, Trump has been lobbying for a similar ban on other countries. Since then, Huawei has suffered a world of hurt.

What does the ban mean?

Naturally, a “total ban” sounds daunting. Banning Huawei smells like certain doom for the tech giant but what does the ban really mean?

When enforced, Huawei can no longer deal with American companies. To Huawei’s dismay, the tech maker uses a fair number of American components in its products. Most notably, Huawei’s smartphones come with Google’s Android. The ban will prevent Huawei from using the operating system going forward. On paper, this is a huge deal. Android remains the world’s biggest operating system. A lot of consumers trust Android. Huawei is losing a massive chunk of its package with the loss.

As if that wasn’t enough, Facebook — and its slew of apps — have withdrawn from Huawei’s products. The company’s smartphones will no longer have Facebook, Messenger, Instagram, or WhatsApp installed out of the box. The threat is becoming real.

Huawei makes its own chipsets but relies on several American companies for other components

Additionally, Intel, Broadcom, and Qualcomm have blacklisted Huawei after Google’s announcement. Huawei has also lost the support of the ubiquitous ARM chip architecture.

It’s not looking good for the Chinese company. Huawei is slowly being dismembered. Faced with an army of bans, it’s natural to worry about Huawei. Worst case scenario, Huawei will become a mere shadow of its former self, devoid of the components that helped its recent success.

Should we really worry, though?

Not just yet. Right now, Huawei is enjoying a temporary reprieve. Soon after the initial ban, the American government granted the company a three-month extension. Until around the end of August, Huawei can still operate with its current partnerships. Except Facebook, its devices will still ship with the same components we love. At least for the near future, Huawei is safe.

In the meantime, Huawei is hunting for adequate alternatives for its failing parts. This means a new operating system, new chips, and likely an entirely new package. To its credit, Huawei’s development team is working around the clock. Only a month removed from ground zero, they are already promising optimistic developments for the future. Huawei remains confident in their future, launching a bevy of new phones amidst the controversy.

Likewise, some American companies are also lamenting the loss of business. Before the ban, Huawei was a loyal customer, delivering American components to a massive global audience. They aren’t happy with Trump’s ban. For one, Google has publicly defended Huawei. According to them, Huawei’s — and subsequently, the world’s — cybersecurity standards will collapse without a collaboration between international companies. With Android, Google can act as Huawei’s checks and balances against potential cybersecurity threats from malicious forces. If anything, Huawei still has its share of public defenders.

The US ban will prevent Huawei from using Android as its operating system moving forward

Most importantly, Trump still has the power to reverse the ban before the 90-day extension runs out. If China and the US reach a meeting point, all might go back to normal. Though uncertain, it’s too early to give up on Huawei just yet.

What will Huawei 2.0 look like?

Unfortunately, Huawei’s future is muddled with uncertainty. This includes any potential iterations in the future. As far as we know, Huawei isn’t bleeding from the multitude of losses. The company has reinforced its Kirin chipsets. Further, they are developing their own dedicated operating system codenamed Ark OS.

Other than that, there’s not much to go on. Speculatively, the biggest changes will come from its app supports. If Google leaves, Huawei will be left without the Play Store’s support and security. The Chinese company will have to rely on its own native software to power their phones. Unfortunately, an all-Chinese ecosystem is less than ideal for most. In fact, having one might even justify the American Sinophobia. But again, it’s all up in the air.

I have a Huawei phone. Should I just sell it?

No, you still shouldn’t. The grey market is already doubling down against the onslaught of Huawei returns. If you don’t know a willing contact, finding a buyer will be difficult. If you do find one, you’ll receive only a mere fraction of what you paid for.

At its current iteration, Huawei’s phones are still on top. They are a delight to hold and use, and if anything, have challenged its competitors to offer better value to consumers over the years. Right now, it’s best to play the long game. Wait and see what happens. If anything, Huawei — and its official partners — already has an insurance policy in place. Several retailers have declared a 100 percent refund policy in countries like Singapore. If Google cuts the cord, Huawei users can get their money back.

Similarly, Google has promised Android Q support for existing Huawei handsets. Just this week Huawei also announced the rollout of Android-based EMUI 9.1 to older models. If you already own one, a Huawei phone shouldn’t be an immediate cause for panic.

So, should we really be worried about Huawei?

Understandably, uncertainty isn’t an ideal for everyone. Huawei’s troubles are an excruciating thorn for both businesses and consumers alike. Switching to another brand is a natural solution against the company’s shaky future. However, if you’re looking at the silver lining, worrying is likely a premature reaction. If you’re not a Huawei user, the controversies shouldn’t affect you. If you’re already a Huawei user or looking to buy a Huawei device, it will likely pay off to play a longer strategy. After all, Huawei devices are still some of the best smartphones you can buy on the market.

Editor’s Note: Looks like we really shouldn’t worry after all. Not even an entire day has passed since this article was originally published but Huawei no longer banned in the US. Rejoice, Huawei users!

Enterprise

Amazon is acquiring MGM Studios for $8.5 billion

Amazon isn’t giving up on the streaming wars

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Amazon Prime Video is going head-on against Netflix, Apple TV+, and HBO Max. And to get a headstart, the e-commerce giant is acquiring MGM Studios for a whopping US$ 8.45 billion.

The film studio is behind the Rocky, Legally Blonde, and James Bond franchises.  Also included are more than 17,000 TV shows. Once the deal closes, the short-term impact will be unfettered access for Amazon’s Prime Video platform.

Bond is the fifth most valuable movie franchise of all time, with its 24 films to date grossing more than $7bn, behind only the sprawling Marvel Cinematic Universe. MGM’s library includes unscripted TV shows like The Voice and Shark Tank and modern TV shows like The Handmaid’s Tale and Vikings.

It is the second-largest takeover deal ever struck by Amazon. In 2017 it paid US$ 13.7 billion for the upmarket US grocer Whole Foods. Amazon said it’d “preserve MGM’s heritage and catalog of films” and provide customers with greater access to existing works.

However, this transaction isn’t uncommon. Disney’s US$ 66 billion acquisition of Fox assets gave the world’s largest media company the extra content muscle to successfully join the streaming wars with the launch of Disney+. It later went onto acquire India streaming company Hotstar for an undisclosed amount. Back then, Hotstar had close to 400 million monthly active users, and many of them view the free, ad-supported content.

Amazon doesn’t report any metrics about Prime Video’s usage, for instance, and the only reference to content expense is in a footnote to its financial statements. Hence it’s unknown how many active users it has. Since the streaming service is clubbed with Amazon’s e-commerce business, it’s also a very affordable purchase for a user.

“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.”

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The US has finally lifted the formal securities ban on Xiaomi

Because Xiaomi is not state-owned

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Xiaomi said that a US court had removed it from a list of companies classified as “Communist Chinese military companies (CCMC).” The company was one of several Chinese firms to be blacklisted in the final days of the Donald Trump administration.

“The company reiterates that it is an open, transparent, publicly-traded, independently operated and managed corporation,” Xiaomi Chairman Lei Jun said in the statement.

The court filing marks a reversal in policy after Joe Biden’s administration took over the President’s office. Three Chinese telecom companies were delisted from American stock exchanges like the New York Stock Exchange (NYSE).

The relief comes after Xiaomi filed a lawsuit against the government in February. A judge proceeded to temporarily block the order against Xiaomi, saying it was “deeply flawed.” The two parties came together on a mutual agreement, ending the spat out of court and marking a fresh ray of hope in Sino-US ties.

The blacklist is different from the US Entity list, which includes Huawei and DJI. The blacklist means American investors will be prohibited from buying their securities and will have to divest their holdings by the end of the year.

Even though Xiaomi does not have any considerable presence in the US, being in the good books is worth a lot. Huawei’s ban has massively damaged its reputation outside of China, and even apps like TikTok have come under fire in countries like India due to Chinese ties.

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iPhone sales surge like never before despite raging pandemic

Apple’s daily revenue was $1 billion in Q2

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Apple reported record revenues of US$ 89.6 billion for Q2 2021, an increase of 54 percent year over year. The company’s iPhone, iPad, and Mac lineups are producing strong growth.

The iPhone range, headlined by the iPhone 12 quartet, brought in US$ 48 billion in revenue alone between January and the end of March. iPhone revenue in the previous quarter was roughly US$ 29 billion, marking a rise of 66 percent. iPad sales came in at US$ 7.8 billion while Mac sales were US$ 9.1 billion.

Apple said it would increase its dividend by 7 percent to US$ 0.22 per share and authorized $90 billion in share buyback, which is significantly higher than last year’s US$ 50 billion.

The subscription services, which include the Apple One bundles, also hit an all-time high with US$ 16.9 billion in sales. These services include Apple Music, Apple TV+, Apple Arcade, and more. Wearables like AirPods and the Apple Watch had a record-setting quarter, too, drawing in US$ 7.8bn.

Apple CEO, Tim Cook, said on a conference call with analysts that all five of the best-selling smartphones in the U.S. during the quarter were iPhones. Though, Apple did not disclose official guidance for what it presumes in the quarter ending in June.

Apple sales grew at least 35 percent in every region, and while the majority was still in the Americas, China played a pivotal role too. The company did say that future growth could be hampered due to the acute shortage of semiconductors. Its new M1 chipset is class-leading and designed on the latest ARM-based architecture. This adds a layer of complexity that could slow down shipments.

Apple said it didn’t know how long the chip shortage would keep supply from meeting demand, but it’s sure that the demand far outweighs the supply.

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