Two years after the first warnings, it looks like Google may have a serious problem on their hands, as cracks in the Android ecosystem open up. This is a serious game changer for millions of users around the world. Here is what you need to know.
Headlines this week (1, 2, 3, 4) warn of an impending nightmare for Google, with the most serious threat to date to its globally dominant Android ecosystem. Blacklisted Huawei is already taking a non-Android path, with its own devices poised to switch to its alternative operating system. But is this just the start of an Android exodus?
It was always the risk when Donald Trump pointed the finger at and cracked down on Huawei. It was never about sensational short-term damage to a single brand, it was always about long-term seismic change for the industry. Major Chinese phone makers considering switching to Huawei’s new operating system would certainly qualify as seismic. US control of global mobile standards via Android and iOS is reportedly at stake.
If you want to understand why these early metrics are so serious to Google, just look at the numbers. For the first quarter this year, Samsung got a 22% market share, with Apple over 15%. The rest of the top five are Chinese: Xiaomi, Oppo and Vivo, with 14%, 11% and 10% respectively. Add in around 4% of Huawei and RealMe each, and that’s 43% of the overall global market controlled by the top five Chinese brands.
Specifically, these four Chinese brands control 50% of the global Android market, and although they offer a scaled-down version of the operating system in China, where many Google services and apps are banned, their exports are now increasing as they each adopt a variation of Huawei’s incredibly successful export strategy of the past decade.
Math tells you everything. The three main Chinese equipment manufacturers are enjoying annual growth of 62%, 60% and 48% respectively. Compare that with Samsung’s 28%.
While Huawei’s steep fall has clearly made headlines in recent months, the growth of other Chinese OEMs has already made up for the difference. China inc’s global market share has not declined and it is overtaking the market.
The export push started with Xiaomi, first to recognize and target the market share left vacant by Huawei’s demise. But remember, this is not a static user group – Huawei was growing at a breakneck pace before the blacklist. There is a much larger market for the Chinese recipe for lower-cost high-end hardware and features that has yet to be converted.
The market is essentially segmented into Samsung, Apple and “China”, with sales in China being split between Xiaomi and BBK’s Oppo, Vivo and RealMe. All except Huawei continue to use Android, but if you could switch the other four Chinese OEMs to HarmonyOS over time, then it would be much bigger than Android or iOS.
Over the past two years, Samsung’s market share has been stable while Apple’s has fluctuated from quarter to quarter. Meanwhile, major Chinese OEMs fell from 31% in the first quarter of 2018 to 43% in the last quarter. They crowd out the “others” to fuel their growth, without needing a serious market share from Samsung or Apple.
Xiaomi now said it overtook Apple in Europe, with just Samsung to catch up. It was Huawei’s rallying cry before Trump’s growing sanctions put to work.
Rumors and speculation out of China suggest that these major OEMs are now evaluating HarmonyOS. Reports also suggest that Huawei will adapt HarmonyOS to run on Qualcomm and MediaTek chipsets, expanding its reach.
Unintended consequences of the blacklist. Huawei’s removal from the equation has given confidence to its domestic rivals to follow its lead – three budding Huawei with the balance sheets and domestic support to push hard and fast. Google’s full Android removal from Huawei has prompted the Chinese tech giant to develop and launch its own ecosystem of alternative global operating systems to compete with Android.
“Developing a good ecosystem is much more difficult than developing good technologies”, Huawei’s software boss told his developer conference in September, because the company has confirmed that HarmonyOS will be available for other OEMs. “I hope developers and partners can unite with us at this historic moment. In this way, a Chinese ecosystem can be sustainable and prosperous … Today we are taking the first step. “
Like I warned in 2019, the most serious risk has always been that the Chinese tech giants act in concert, with perhaps a push from the state, to adopt an alternative operating system and ecosystem, in order to offer a viable alternative to Apple’s iOS and Google’s Android, a viable alternative to US-controlled technology.
“The world is eagerly awaiting a new open system”, Huawei Chairman Guo Ping openly said last year. “And since Huawei has helped Android succeed, why not make our own system successful? It is plausible to have two systems in one world. And Huawei will be able to survive and take the lead even in an extremely hostile environment. “
“The price for Huawei if it can achieve this feat”, I had suggested a year earlier, “is huge. Make no mistake, it is likely to carry other Chinese manufacturers with it. Huawei said the time has come for an alternative to traditional Android and iOS, and if Huawei can control this` ‘third way’, then he can build his own ecosystem and infrastructure, he can license his software as well as sell his hardware. “
At that time, the United States had not guillotined Huawei’s silicon supply chain, and so Huawei remained a viable hardware supplier – it just needed an operating system. Now it has lost so much ground on the hardware front, and its rivals have won so much, that its ecosystem of software and developers is its best bet to regain its leadership position in the market.
This situation has been exacerbated by the decline in Huawei’s home sales. It’s impossible to overstate the severity of the impact this will have on Huawei – its domestic sales have bolstered its bottom line thanks to the blacklist. But, according to CanalysHuawei’s annualized sales in China for the first quarter were down 50%.
Timing is everything, and speculation is escalating now. And remember, this is China. Do not take a 12 month view. Take a 5-year view. Even a view of 10 years.
This week, a new video was posted on YouTube that appears to show Huawei’s HarmonyOS on a Xiaomi smartphone. Xiaomi told me that he was not commenting on the “speculations”. Huawei also didn’t comment, but reminded me that “HarmonyOS is open to other smartphone makers.” Google rejected the reports.
But the whispers have started, and the change makes sense when you consider the geopolitical context as the East is fighting against the West. While Europe may take a while to convert, markets such as India, South America, and Southeast Asia will be much easier. And the markets adopting budget handsets are even easier.
“OPPO, Xiaomi and Vivo may soon switch from Android to Huawei’s Harmony operating system,” Mashable India reported, citing a blogger report suggesting “surprises“Were imminent and that” the model of the Android era does not represent the future. “
As to whether we can take these reports seriously, keep in mind that attracting major Chinese smartphone makers is exactly what Huawei envisioned when it made the decision to develop Harmony as an open operating system. source. This was Huawei’s response to the sanctions imposed on its own computer hardware company – how else to get its software to market?
Let’s be realistic. It is not a short term threat. HarmonyOS is not a viable switch for most Android users in most key markets. Again. But give it a few more years, during which time these Chinese brands could have built an even bigger share of the Android market, and it will likely become a different proposition.
The real nightmare for Google is that this shouldn’t happen. Huawei was fully committed to Android before the blacklist, a threat to Samsung but not to Google. For a year or more after the sanctions were imposed, Huawei executives were quick to say they would switch back to Android if given the chance. But a lot of water has passed under the geopolitical bridge since then. And Huawei is a different business.
Last year, the Huawei president warned that pushing his Android alternative would be “a protracted war that she’s destined to win in the end … No matter how high the mountain, dig an inch or less, persist and fight for a long time. , we will certainly succeed.
Whatever that actually means, it has now started.