In case you don’t watch a lot of international news, or don’t trade stocks or have been living under a rock lately, the biggest economy, USA (thousand points for guessing) started a war with its biggest arch-rival, China which is the second-biggest economy. But it’s not about arms, ammunitions or nuclear weapons this time, it’s about trade. A trade war so big that it resulted in the bloodshed of money and a disturbance in the global economy as a whole.
You know that the earthquake is big when it uproots even the biggest tree in the forest. The same happened with the US-China trade war, which nearly knocked out the biggest technology giant in China, Huawei. It got hit and as a result, had to create its own Operating System (like IOS and Android) called Ark OS/Hongmeng OS/Oak OS.
What happened in the trade war that made Huawei take such a bold decision? What could be the future of the Oak OS? Is the Oak OS meant to die? You can find answers to this question (and even more of them) in this article.
THE TRADE WAR- WHERE IT ALL BEGAN
The story starts much, much long ago when Donald Trump got elected as the President of the USA in 2016. One of his tweets in 2014 indicated his motivation behind trying to cut ties with China. He tweeted, “Remember, China is not a friend of the US”. That might seem like a small remark but in 2017, when he was in power, he granted permission to carry out an investigation on China’s trade policies with the US.
They realised that the US was falling into trade deficit (the difference between imports and exports, suggests that the country is dependent on others for resources), and China constituted 67% of the trade deficits, which is huge just for one nation. The reason was that China didn’t require many imports from the US but the US was heavily dependent on China’s cheap labour and cheap resources. The solution to this problem, according to Donald Trump was hidden in the word “tariff”.
A tariff is a tax imposed by the country importing resources on the country exporting them
Now, to repel China from exporting too many resources, the US started imposing big tariffs on China-based products. The result was a drastic increase in the prices of Chinese goods for the American producers as well as consumers using them, due to which they chose cheaper American goods instead.
As a result of consumer behaviour, China was forced to reduce its exports which stabilised the United States’ trade deficit. But China retaliated and did the same thing to the US, the whole thing being called a trade war.
“Enough of this boring lecture, where’s Huawei in this?”
HOW HUAWEI SUFFERED DUE TO THE TRADE WAR
No matter how fairly competitive Huawei seems, it has always had a dark side to it. It has been accused of intellectual property thefts, espionage, dealing with terrorists multiple times since it started doing business in the first place. Its CFO (also the CEO’s daughter) got arrested in Canada in December 2018. This is one of the biggest reasons why the USA thinks that Huawei could be a big threat that is spying on US citizens and probably on the advantage of the whole trade war
But the thing doesn’t just end here. There are multiple reasons just like Huawei’s history that made it the centre of hue and cry. Another reason being the fact that China has projected to be the only country that would actually implement 5g before 2020. Other countries are not even close. Huawei, being the “Apple” of China, is sure shot the one winner that gets the 5G contract, which could potentially decrease the chances of the US being a country that gets the contract from Huawei.
Huawei may seem like an unfamiliar name but its revenue projections show a big increase in its market share.
Huawei’s smartphone shipment increased from a meagre 5% in 2015 to a crazy 17% in 2019. Other major rivals like Apple and Samsung couldn’t even maintain their worldwide market share. Though the trend is a little different in the USA, Huawei’s market share increased in the US as well. Seeing a rival brand reach this fast to run over the best company in your country, how would you react?
Donald Trump reacted aggressively seeing that a company with such a negative repute and allegations was rapidly increasing its market share amidst a trade war.
On May 15th 2019, Donald Trump signed an Executive order refraining any US-based company from doing business with Huawei
What the order implied was that Huawei had to cut all ties with companies such as Android and Google. So to exist as a company, Huawei had to create an OS which does not support Google or Microsoft.
THE SECRET MISSION
Huawei’s excellence can be measured by the fact that it is still relevant after being hit by such a big tide. All of its smartphones were compatible with Google and were fully android-supported, and now both of these things are non-existent. Still, instead of becoming bankrupt, the company found a way out of this, thanks to something happened 7 years ago.
The founder, Ren Zhengfei conducted a secret meeting with some top Huawei executives with the motive to come up with ideas that could make Huawei less dependent on Google’s Android. They agreed to secretly build an OS, independent of Google that could work even in a future ban by the US.
The CEO was smart enough to understand this possibility which became a reality. That meeting came to known with the name ‘lakeside talks’. Everything related to the strategy was kept classified and out of reach of even the top tier employees of Huawei.
A lab and a developer team were assigned to this task. Huge chunks of profit have been diverted towards this mission of R&D. After the Executive order by Trump, a disclosure was made by Huawei’s mobile head Richard Yu Chengdong about the new OS.
On 24th May, Huawei filed a trademark request with the EUIPO (European Union Intellectual Property Office) for the names Huawei Ark OS, Huawei Ark, Ark and Ark OS.
THE CEO’S TAKE ON HUAWEI BAN
“I think our role has been exaggerated by them (Donald Trump and other US officials)”, Said Ren Zhengfei, the CEO of Huawei in an interview with CNBC. He believed that the ban on Huawei in the US wouldn’t cost them as much as the world thinks, because a very little part of their sales was from the US. Huawei has projected 130 billion dollars in revenue and is growing at a rate enough to not care about what the US thinks or does.
The executive order by trump didn’t mean that Huawei was fully disbanded from trading with American firms, it’s just that they would have to get approval from the US government, according to Ren.
But after a few weeks, the CEO admitted in a show “a coffee with Ren” that the ban was more serious than they expected. The revenue is projected to drop from 125 billion to 100 billion in the next year.
He is confident about the revival of these numbers in 2021. An important thing not to forget is the fact that it probably has faster access to 5g technology than any other corporation in the world. But on the other hand, Google has revoked Huawei’s android licence which means that it can’t have android in its phones.
WHAT TO EXPECT IN THE HUAWEI OS
One thing that we can conclude about Huawei is that it does not want control of foreign government, companies and sellers on its sales, which is why it is a private company in itself. Hence the Ark/Hongmeng OS is going to reach the market soon (probably the fourth quarter this year)
It is rumoured to be 60% faster than the android, but also more data theft-prone. But there are a few facts that we can surely rely on.
- The name of the OS is probably Hongmeng in China and Ark in other foreign markets because the trademark requests made by Huawei are for these two names only.
- The Operating system isn’t just for the smartphone world. It is also developed for things like tablets, laptops and even PCs. Hence, it’s going to be an atmosphere like windows and Apple, unlike Android.
- The Os is based on Linux and could be very similar to the rival Android because it is Linux-based as well. The plus point is that it will be compatible with other applications that only Android supports. About a million of them are already sent for testing.
We know that the OS is coming, we know that it’s new, but the only question that is left is the consumer behaviour which can only be answered if you see this post using a Huawei phone with the Ark OS. Till then, be curious