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According to The Times, the UK plans to form an alliance of democratic nations to create a 5G alternative to Huawei.

The Times says the group will include the G7 nations: Canada, France, Germany, Italy, Japan, the UK and the United States as well as Australia, South Korea and India.

No doubt if the plan goes anywhere there will be pressure on New Zealand to join. It is the only Five Eyes intelligence alliance member not in the Times’ list.

Huawei top equipment maker

Huawei is the world’s top telecommunications network equipment maker. It has the most advanced cellular technology and is a leader when it comes to 5G networks.

Thanks to favourable currency conditions Huawei manages to make better 5G technology and, in many cases, sell it for less than rivals.

There are dark mutterings from the US that Huawei climbed to the top of the telecommunications market by stealing intellectual property.

Whether or not this is true, Huawei also enjoys significant tax breaks from the Chinese government and favourable trading conditions in the world’s second largest economy. Unlike western governments China is not frightened to intervene in key markets. The nation has long had an industrial policy to become a world leader in telecommunications technology.

Spying accusations

The headline reason Huawei has western democracies clinging together are reports the company either already does, or could soon start, giving Chinese intelligence agencies access to data carried on networks.

While there is no smoking gun proof this has happened yet, the potential for it to happen is real enough. And that’s before you consider the rising tensions between China and the US.

Behind the headline reason is a second, more nuanced argument. Huawei dominates telecommunications hardware.

Huawei’s main competitors still in the market are Nokia and Ericsson. Both are a fair distance behind Huawei. They can’t compete with Huawei’s rapid development cycles, they struggle to match Huawei’s price advantage.

Monopoly

Before the spying accusations became public the gap between Huawei and the also-runs was widening. There was a danger Huawei would move from dominance to something more like a near-monopoly.

Think of how Google dominates web search. Strictly speaking search is not a monopoly, but only one company matters.

Believe it or not, the world could manage without web search. It can’t manage without telecommunications networks. And much of the world would certainly would be in trouble if the only supplier of that network technology was based in an increasingly aggressive, potentially hostile country.

Crippling

So crippling Huawei before it reaches that position stops it from becoming a serious threat. Well, that’s the theory and the thinking behind the UK’s alliance plan.

There’s another angle to this. Huawei aside, Chinese companies dominate the supply chains for telecommunications hardware. Both Nokia and Ericsson have operations in China. Many of the chips and components they use come from Chinese factories.

During the early stages of the Covid–19 pandemic we saw the chaos that comes when supply chains shut down. The Chinese government could shut them down whenever it chooses. Sure that would come at a huge cost, but the risk cannot be ruled out.

Tensions between China and the West, especially the US, are higher than they have been for decades. Things have reached the point where even suggesting the formation of an anti-Huawei technology alliance will be seen as ratcheting up the tensions.

Precious little optimism

The UK plan may come to nothing. It’s possible tensions will reduce. But optimism in this area is in short supply right now.

Nokia and Ericsson are the most likely winners if the UK plan gets anywhere. Samsung and NEC also have 5G network equipment, but the two are even further behind and can’t offer a comprehensive suite of products.

Assuming it is Nokia or Ericsson or both the winners will get guaranteed markets and, presumably, buckets of government money. The move won’t be good for innovation and will reduce choice for mobile carriers.

On the other hand, it will bring much needed certainty to the sector. Everyone will be able to get back to building networks and stop worrying about the politics of what should be engineering or commercial decisions.

Huawei p40 pro

In March Huawei launched the P40 Pro. It is the company’s latest flagship Android phone.

Going by the reviews, the hardware is as good as it gets for Android.

It could have been a contender for 2020’s best phone.

Yet there is more to a phone than hardware. If anything the software and services are more important. So is the way these two integrate with the phone hardware.

Android, not Google

This is a problem for the Huawei P40 Pro because it is the first major Android phone from a top brand that doesn’t include Google Mobile Services.

Last May the Trump Administration placed heavy sanctions on Huawei. The company is not allowed to licence or otherwise use US-made technology.

Which means Huawei’s new phones can only use the open source version of Android.

Moreover, new Huawei phones can’t offer Gmail, Google Maps or You Tube. Huawei is cut adrift from the Google Play Store. You can’t pay for stuff using Google Pay.

Clever, up to a point

Huawei has found one clever workaround the problem. It has re-released versions of earlier phones that are still allowed to use these services. The Huawei P30 Pro recently appeared complete with everything Android.

That works if customers don’t mind buying what could be thought of as old technology. Not that 99 percent of users would ever know the technology is old, it still feels modern enough. As my P30 Pro review says, you get a lot of camera.

Homegrown ecosystem

P40 Pro buyers are stuck with Huawei’s own homegrown ecosystem. You get Huawei’s unexciting EMUI 10 operating system wrapped around Android and a handful of substitute apps. The apps might get the job done, but while some buyers may be satisfied others may not warm to them.

Huawei also offers its own App Gallery. The company said it was going to, or maybe that is will, spend a billion US dollars on the gallery. It has 3,000 software engineers working on it.

Whatever the claims, it’s like entering an Eastern Bloc shop in the bad old Cold War days. There are gaps everywhere and many apps are limp, pale copies of the real thing.

Even the included email app is, well, not a patch on Gmail. Huawei really ought to have poured some resources into making that one sing and dance.

If you are hooked on Facebook, there is no app. In fact you won’t find any of the most popular apps.

A brave decision

You’ve got to really want a Huawei P40 Pro to get one. Or you have to be extra keen to stick-it-to-the-man.

For a start, the P40 Pro isn’t listed in the Spark or Vodafone online stores at the time of writing. You could buy it from 2degrees at NZ$1500 a pop or on a plan.1

Then the challenge is making it work the way you’d want an Android phone to work. A lot of geeky folk are attracted to Android precisely because it does offer more scope for tinkering that Apple’s iPhone.

No doubt some of these will enjoy the P40 Pro challenge.

Security melt-down

You can use third-party app stores. If you work for a corporation your IT security people will probably have a melt-down at the thought. There are downloadable and published hacks and so on. Android is already a minefield for malware and scams, heading into this territory is not for the faint hearted.

Patching security updates is likely to be troublesome and P40 Pro owners may even be violating the terms and conditions for services like online banking using such risky software.

Huawei has made some great phones over the years. In another world, the P40 Pro would probably be among them. But it isn’t. Whether its handicap is fair or reasonable is one thing, but regardless of those matters, it would not be wise to sink $1500 of your own money into a crippled phone.


  1. The marketing material at the 2degrees site doesn’t go anywhere near mentioning the phone is not like other Android phones. This could be grounds for getting your money back if you feel duped. ↩︎

IDC reports shipments1 of new phones dropped 11.7 percent year on year in the first three months of 2020. That’s a total of 275.8 million phones.

It is the biggest year-on-year drop ever seen.

First quarter numbers are usually lower than the fourth quarter which includes all the phones purchased as Christmas gifts. The fourth quarter usually also captures sales of new phones immediately after the major product launches.

Yet this took place before phone buyers faced the full impact of the Covid–19 pandemic. Sure parts of China were closed down. And China does account for about a quarter of the worldwide new phone market. That’s going to have a huge impact.

Likewise, most of the world’s phones are made in China. Production and the pre-production supply chains were badly affected in the second half of the quarter.

It’s unlikely the current quarter will see much improvement. China may be back at work, but people elsewhere have been, many still are, in lockdown. That’s not great for phone sales. Nor is the economic uncertainty. That new phone sale is an easy expense to cut when the future looks tougher.

Samsung hit hard

While Samsung remains top dog with 58.3 million phones and a 21.1 percent share, it suffered the largest drop in shipments during the quarter. Year on year sales are down 18.9 percent.

There is good news for Samsung. IDC says the higher price of the Galaxy G20 phone means better profits.

Samsung has two important phones scheduled for launch later this year. The Fold 2 and the Note 20 are both likely to be expensive phones at a time when demand for pricey high-end models could cool.

Huawei better than you might expect

The political waves rocking Huawei’s boat have harmed phone sales less than you might expect. Year on year sales are down 17 percent. That’s bad, yet not as bad as Samsung.

Apple’s year on year sales were, in effect, flat with a 0.4 percent decline. This translates into an increased share of the overall market. It has 11.8 percent. The company’s success was mainly thanks to its iPhone 11, which in certain configurations is the most expensive non-folding handset.

IDC says that if the trend to lower price phones continues, and let’s face it that looks likely, Apple should have a hit on its hands with the iPhone SE.

What next?

To get an idea of how this quarter could go, Qualcomm, which makes chips for mobile phones, says it expects a 30 percent year on year drop for the current, second quarter. Given that it takes orders from phone makers ahead of manufacturing, it has a good handle on the market. That would be a huge drop.

IDC suggests a bright spot could be 5G. People need new handsets to use the faster wireless technology. It’s possible customers will trade up to 5G phones later in the year.

On the flip side of this, most users won’t notice any performance difference from switching to 5G. Data will download faster, but at the time of writing there are no mobile apps that can use faster data speeds.


  1. Shipments is industry talk for products that have left the warehouse en route for customers. While a shipment is not the same as a sale, it is close enough. Retailers don’t tend to carry huge inventories of product these days. ↩︎

Samsung is on its second generation of foldable phones. Motorola and Huawei are a step behind, but remain in the game. Will your next phone be one you can fold?

The technology is impressive. All the foldable phones I’ve seen to date look great. They are also useful.

Folding means a handheld phone can morph into a small iPad Mini sized tablet. They make reading and simple online tasks easier than on everyday phones.

From a phone maker perspective they do three important things.

First, they give phone buyers a reason to upgrade. People have been hanging on to phones for longer because there is less pressing reason to upgrade. Adding a new functionality breaks that cycle.

Out of the cul-de-sac

Second, they give phone makers a route of the design cul-de-sac.

Phone formats have stabilised as slabs of glass and metal. They would be almost featureless if it were not for the ever swelling camera bumps. Makers add more lenses and more receptor pixels in a bid to competitive1.

Folding phones open up new ways to differentiate and compete.

The third benefit of folding phones for phone makers is they sell for premium prices. Phone makers can increase the average unit price at a time of intense competition downward pressure on prices.

Phone makers announced two more foldable models in the last week or so. Samsung’s Galaxy Z Flip and Lenovo’s $1,500 Motorola Razr are both flip phones with folding screens.

Foldables have not got off to a good start. Samsung’s Galaxy Fold was a botched launch. A second wave of models was better, but they are still fragile and expensive at NZ $3400.

Fragile, foldable

The Motorola Razr is as fragile and has poor battery life.

In other words, the models we’ve seen so far are undercooked. They will sell to well-heeled early adopters. These people will pay a king’s ransom to act as guinea pigs. Meanwhile the phone makers can go back to the drawing board and perfect their designs.

They will make it into the mainstream in one of two ways. Either Apple will create a folding iPhone that gets the technology right and resets the market or Samsung will brute force its way to success. The other possibility is that folding phones go the way of 3D television sets.

There’s no doubt this is a development worth watching. My advice is to hang on to your money for now, maybe squeeze another year from your existing phone. The benefits of having a bigger screen are not enough to outweigh the risk of spending a lot of money on something that’s easy to break.


  1. It’s questionable this is what most buyers want. ↩︎

Hear me on this week’s NZ Tech Podcast. I talk with Paul Spain about Huawei teaming with Oppo, Vivo and Xiaomi as a defence against Chinese phone makers being locked out of Google’s Android services. We talk about the incredible progress made by New Zealand’s games developers who have doubled revenues in two years. We also discuss Telsla’s latest moves and a plan to test flying taxis in Christchurch.

You can listen to the podcast on the site or use one of the download services.