Yesterday at the last minute appeared one of the most important technology news so far this year, Google reported that it stopped collaborating with Huawei and the powerful Chinese company will no longer be able to use Android and the Google Play Store application store. In the last few hours, other large American companies such as Qualcomm and Intel have announced similar actions so Huawei’s situation could be a limit.
Behind all this history is the US President Donald Trump and his administration who in their trade war with China has banned the collaboration of American companies with “foreign adversaries“. Undoubtedly the future of Huawei is in the air, although they have alternatives like their own operating system Kirin OS.
However, beyond what may happen with Huawei, Apple may also be very affected by this news and we will try to analyze how this can affect the Cupertino company.
A commercial war that can leave many victims in its path
Trump has decided to start a trade war with China imposing new rates on the importation of many products, in fact, Apple has already been affected. The next step has been to ban the collaboration of their companies with Chinese companies, which has led to the veto of Google to Huawei.
As in any war, even if it is commercial, now it is China’s turn and the decisions that the Chinese Government can take could affect many American companies, including Apple of course.
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If the Chinese government decides to play the same Trump card, that is, force their companies to stop collaborating with American companies, the manufacture of millions of products is in great danger. Apple, like the vast majority of companies, has its factories in China and, although part of the production has been moving to countries like India, a very high percentage of iPhone, iPad or Apple Watch are manufactured in the Asian country.
This is a very unlikely decision since companies like Foxconn or Pegatron have Apple as their best partner and if this collaboration breaks it would mean to stop manufacturing millions of devices which would force the closure of many of its production plants and the dismissal of thousands of workers.
Another decision that China can take is to impose some kind of tax on American companies in the country. This would also affect Apple directly since, although it is not going through a good time, according to the latest financial results, approximately 17% of its revenues come from China. It is the third most important market for Apple and a tax on their devices would greatly affect their income. Not to mention that this rate could also increase the price of their devices globally.
However, this decision by Trump could also benefit Apple in a certain way. If Huawei is out of the market someone should take his place and companies like Apple and Samsung could go well if they manage to absorb all those millions of Huawei customers outside of China. However, this is not entirely clear since Huawei will be able to continue in the market if it launches its own operating system, in which they have been working for years, and its own application store.
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Of course, the consequences can be very important and this movement of Google, forced by the policies of Trump, can completely change the current market of smartphones. Huawei was on track to be at the top of the podium of smartphone manufacturers. The next decisions will be very important to see how Apple is positioned, whether it will benefit or not is something that only time will tell us.
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