Fall of Huawei: What we’ve lost and what we’ve gained

At this point you know the story: In May 2019, then US President Donald Trump smashed the hammer on Huawei. With an executive order that put the company on a so-called “Entity List”, he essentially cut off the company’s smartphone division. Since then, the division has been limping as best it can.

In 2020, however, Huawei briefly overtook Samsung and became the largest smartphone manufacturer in the world. That achievement confirmed a longstanding claim by the company to do just that. Today, however, just about a year later, Huawei is no longer number one in the industry. In fact, it’s not even in the top 5 anymore.

Connected: Huawei Ban Explained: A Complete Timeline And Everything You Need To Know

This result is not too surprising. Without access to American companies – above all Google, on which the Android ecosystem is heavily dependent – it was only a matter of time before Huawei’s global phone ambitions collapsed. What is surprising is that the Trump administration – and ultimately the Biden administration – never revoked or weakened the powers of the entity list. In fact, it has only gotten worse. Technology experts, and even Huawei itself, seemed to see the so-called “Huawei ban” as a significant but temporary setback. However, that does not seem to be the case.

After two years have passed and the smartphone industry has accepted that Huawei is no longer a global player, it is time to take a look at where we are. What has changed in the industry without Huawei? Is the industry doing better or worse now? And most importantly, what will happen to Huawei?

Huawei’s two annual major smartphones – the P series and the Mate series – are undoubtedly some of the best of the year. Whether it’s the top-end specs, the incredible design performance, or the outstanding photo experience, a Huawei flagship is traditionally easy to recommend for any smartphone buyer. Now, however, we would recommend anyone outside of China to buy a Huawei phone. It’s a hell of a shame.

This loss will affect the entire industry. Without Huawei pushing other companies – Samsung in particular – to innovate, we will likely see fewer crossings and more incremental iterations from the big players. Admittedly, Samsung is still struggling with Apple and the litany of Chinese manufacturers, so it can’t exactly rest on its laurels. But for the past five years, Huawei has been its biggest competitor in the Android world. Now that competition is gone.

In particular, Huawei was also Samsung’s best competitor in the foldable device space with incredible devices like the Mate X2. Although there are many companies with foldable devices, Samsung has a free hand in the early days of the future of the cell phone.

And don’t forget that Huawei wasn’t just competing with other smartphone OEMs. It also competed with silicon manufacturers like Qualcomm. While Huawei’s Kirin chipsets never matched the capabilities of the latest flagship processor, Snapdragon, they have certainly held their own, especially when it comes to neural processing. In the future, Qualcomm will (at least for the time being) only have to take care of Samsung in the flagship Android area. This is not good news for innovation.

When a player leaves the game, there is of course room for a new player. Or in this case player.

What we won

When Huawei left the list of the top five smartphone vendors in the world, it allowed other Chinese companies to rise. The biggest winner here is undoubtedly Xiaomi, which is now in third place behind Samsung and Apple. While it will be a long time before it even has a chance to overtake Samsung, it’s possible it could overtake Apple in just a year or two.

Several brands have now also risen under the BBK banner, including Oppo, Vivo and Realme. In the case of Realme, it is now the sixth largest smartphone OEM after only three years of existence. That is amazing.

See also: US-China Trade War: Why Every Chinese Phone Manufacturer Should Prepare For The Worst

These companies, all of which are battling for Huawei’s shrinking piece of the pie, are good news. The fierce competition will inevitably lead to better phones at lower prices. Of course, all of these Chinese companies have no presence in the US, which means the vast majority in the US will continue to stick to two main choices: Samsung or Apple.

The placeholder here could be OnePlus. This brand is the only Chinese OEM with a presence in the United States with the (unspoken) support of BBK behind it. It’s possible that we could see bigger global ambitions from OnePlus in the next year.

Finally, let’s not forget about Google. While Google has never gotten anywhere near the top five, its new obvious strategy of developing its own silicon and finally taking its camera hardware a notch could make it a notable competitor. However, Google has made a lot of wrong decisions in the last five years, so there is a lot of catching up to do.

Where is that for us?

Obviously, right now it’s difficult to say whether what we lost by the US marginalizing Huawei will be outweighed by the gains from increasing Chinese competition. On the one hand, the top global players all feared Huawei. Now that fear is gone. On the other side, where a monster once stood, we now have many smaller beasts in its place. That brings with it a new kind of fear.

It is quite possible that Huawei’s exit will ultimately be good for the industry. While Realme, Poco and other budget-conscious gamers are fighting bitterly for the next billion customers in developing countries, Xiaomi, Oppo and Vivo can fight for a place at the premium flagship table. In the meantime, Samsung and Apple will continue to crawl each other at the top of the pile. It seems like business as always.

There is a nagging feeling that the industry really needs a Huawei, however. Samsung and Apple don’t have to worry about a third company at their table for now. While Huawei’s lack of presence in the US prevented Huawei from ever really being on par with Samsung and Apple in the premium segment, there was at least one threat that could come this day. In fact, it was a threat that was very real just a year before the trade ban, when Huawei was preparing to enter the market in partnership with AT&T. It’s been years now since any other company made that day a reality – if it ever does.

Finally, there is the elephant in the room: What happened to Huawei wasn’t a fair game. It’s not that Huawei hasn’t missed an innovation or done too much fiddling like LG. It’s not like it botched its own long-term development like Motorola. Huawei is no longer in the game because the U.S. government has decided it needs to be done. How is this changing the industry as a whole? What does that mean for all the other Chinese brands? Time will tell, but it’s certainly a nerve-wracking development.

Huawei will survive

This article has a lot of doom and gloom. The most important thing about Huawei, however, is that it doesn’t go anywhere. Sure, its smartphone division may be mostly limited to its huge Chinese audience, but that’s not all Huawei does.

Over the next few years, we expect Huawei to advance its considerable talents in other technology areas. We’ll continue to see tablets, computers, wearables, and audio products from Huawei. We’ll likely also see the company expand into new technology areas like virtual reality, transportation, and possibly even health.

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Huawei is a popular brand in China and is supported by the government of that country. It has and will continue to have billions of customers. It is literally too big to fail. The rollout of Harmony OS just a few days ago shows how determined Huawei wants to advance its smartphone division – with or without the help of American companies. Sure, so far Harmony OS has had the functional appearance of Android 10 with a new coat of paint, but it proves that Huawei wants to continue to provide China with plenty of smartphones.

However, the company’s days in the global smartphone market seem largely over. In the next few years we will be able to say whether this ultimately had a net positive or net negative effect. Until then, we can only complain that the industry has lost one of its most important players and will never be the same again.