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America is leaning hard on Britain to reject Huawei as a 5G network builder. Meanwhile all the parties in New Zealand have gone quiet on the subject.

US officials told British ministers using Huawei in UK 5G networks puts intelligence sharing at risk. According to a report in the Guardian, the Americans said it would be “Nothing short of madness”.

Former Australian prime minister Malcolm Turnbull also warned the UK prime minister on the matter.

He says: “The real question is not looking for a smoking gun but asking whether this is a loaded gun and whether you want to have that risk.”

Threat seen in Australia

The threat identified by Australian security agencies was not Chinese intelligence interception but potential denial of network access.

Turnbull told The South China Morning Post: “Australia banned Huawei and ZTE from its 5G network as a hedge against adverse contingencies in case relations with China soured in the future.”

Elsewhere in a video he says:

“Capability takes a long time to put in place. Intent can change in a heartbeat, so, you have got to hedge and take into account the risk that intent can change in the years ahead.”

Malcolm Turnbull – Former Australian Prime Minister

Turnbull says Australia reached this decision without pressure from the US. That may be true, but it stretches credibility to suggest there was no lobbying. Even more so when you read the stories about US officials warning British ministers.

New Zealand may have also arrived at its own conclusions, but again, there will have been lobbying on both sides. And, at the very least, our politicians will be aware of The Australian decision.

Huawei locked out

For now, Huawei remains locked out of building a 5G network in New Zealand.

That was never going to affect Vodafone who built the first serious 5G network here. Nokia has been Vodafone’s long-term partner and has most of the 5G contracts.

It’s different for Spark and 2degrees. While 2degrees has announced nothing about its 5G plans, Spark has made a lot of noise over the last two years.

Until now, Huawei has been Spark’s main partner. The two built one of the world’s first 4.5G networks. For a long time it looked as if Huawei was on track to build Spark’s 5G network.

TICSA

That now seems remote. On paper the door is still open. The two companies could still get the necessary sign-off under the Telecommunications (Interception Capability and Security) Act 2013. This is betterknown as TICSA.

The GCSB blocked Spark’s original 2018 5G upgrade proposal under the Act. At the time it said the proposal posed a “significant network security risk.”

Ministers have been careful to avoid talking of an outright ban. They say the GCSB judges each TICSA application on its merits. Officially it just happens that the proposed application wasn’t up to the standard.

Spark and Huawei could return with a fresh proposal. At times it sounds as if the government expected this to happen. Yet the first application was more than a year ago and there has been no word of a fresh attempt.

Otherwise New Zealand’s government has said little more about the affair in public. It doesn’t need to.

White House claims Huawei spies

Other governments are making plenty of noise. The US and the White House has maintained all along that Huawei spies for the Chinese government. Huawei has been adamant that it does not.

As Turnbull makes clear, Australia remains cautious.

In Huawei’s defence there is no evidence of any wrong doing. Nor is there a Chinese law in place that obliges Huawei to act on the government’s behalf. Nor is China seen as a likely aggressor. As far as diplomats, exporters and importers are concerned we are all the best of friends.

Yet, as Turnbull makes clear, there doesn’t need to be evidence of spying for there to be a potential future risk. Nor does there need to be a change in Chinese law. If tensions between the West and China ramp up, China could put Huawei under pressure.

As Turnbull points out, circumstances can change fast. Building a network, or an alternative network takes a lot of time and money. His point is not choosing Huawei is prudent.

Decision time in London

It’s not clear yet which way the UK will jump. It could still decide to go ahead with Huawei. Huawei’s prices are cheaper than rival network hardware companies.1 Huawei hardware is often the better choice for reasons other than money.

The problem the UK faces is much the same as the one facing New Zealand. Allow Huawei and there will be a diplomatic fall-out with the US. Shut Huawei out and China will take offence. There’s no fence sitting, nations are being forced to choose one or the other.

China has not helped matters. Since the question first arose, it has flexed its muscle in ways that alarm overseas observers. Hong Kong is the most obvious example.

One way or another New Zealand appears to have made a decision. Spark is pushing ahead with alternatives to Huawei with its 5G projects.

It will be interesting to see if New Zealand’s position changes if the UK give Huawei the green light. It may not. Yet a decision in Huawei’s favour will give the company ammunition in future New Zealand discussions.

A story unfolding on the other side of the world could yet have implications here.


  1. Some argue the Chinese government subsidises the business. If true, that is more, not less, reason to be wary. ↩︎

Huawei Watch GT 2

The Huawei Watch GT 2 looks OK, has great battery life, is waterproof and has a slew of health features, but it can’t run third-party apps.

Huawei has a unique take on the idea of a smart watch. The company’s Watch GT 2 almost belongs in a different product category. It has its charms, but it is, well, not very smart.

There is little in common with, say, the Apple Watch, other than both are watch-sized computers that fit on the wrist.

For a start the Huawei Watch GT 2 looks nothing like the Apple Watch. It is round, like a non-smart watch. In most of its incarnations it looks like a conventional watch with hands ticking clock-wise around the watch face.

Plenty of battery life

Unlike Apple’s Watch, you can get two weeks from a single charge, although that time plummets when you use its music playing capacity.

I didn’t test this, but Huawei says the Watch GT 2 is waterproof enough to measure your swimming activity.

The biggest different between the Huawei Watch GT 2 and other smart watches lies in what it does. Or to be more accurate, what it doesn’t do.

If you have your phone nearby, you can make Bluetooth calls on the Watch GT. Huawei says 150 metres, in testing I found it struggling if the phone was 15 metres away.

Huawei Watch GT 2 is all about activity

The device will monitor your heart rate and track physical activity.

There’s a built-in GPS so you know where you’ve been. You can check emails, texts and calendar items, although you need good eyes to read off the tiny 46mm display.

That’s about it. Unlike other smart phones, it doesn’t run third party apps. Don’t even think about using the Huawei Watch GT 2 for something like checking onto an Air New Zealand flight.

You are stuck with the stock software with little room for customisation. It is what it is.

LiteOS

Huawei has opted to use something called LiteOS as the operating system. No, I’ve never heard of it either.

LiteOS is all about fitness and health tracking. At the launch function Huawei talked about the 15 different types of exercise activities the phone tracks. You can also track your sleep. It collects a lot of data.

In that sense LiteOS is fine, but limited. Let’s hope Huawei can do better if it has to deliver its own phone operating system.

Compared with smarter smart watches you get a lot of activity tracking and a ton of battery life. Depending on your taste you might also like how it looks. On the downside you can’t do anything like as much with it as with an Apple or Samsung watch.

Huawei’s Freebuds 3 look distinct from Apple’s Airpods. Presumably they are different enough to avoid knock-off litigation.

Yet there’s little question the Bluetooth wireless earphones with a charge box idea is cribbed from Apple.

Let’s be polite and say they pay homage to the original.

You can buy a pair in local stores for around NZ$260. This compares with the NZ$450 price of Apple’s Airpods Pro.

Freebuds 3 versus Airpods

It’s impossible to write about Freebuds without mentioning Airpods. So let’s stick with comparisons here, that’s the real story.

Both products are wireless earbuds that use Bluetooth to connect to devices. Both come with snappy little charging cases. More important, both have active noise cancellation.

If you own an iPhone or iPad, it’s likely Airpods will be your first choice. And why not? They are excellent. I wouldn’t be without mine.

Likewise, if you own an Android phone or you are allergic to buying Apple kit, there’s a good Freebuds are on your wish list.

The main exception to these cases is cash-strapped Apple owners might be drawn to the less expensive Huawei option.

Differences

Looking beyond price, there are a few significant differences between the products. The Freebuds 3 earpieces are more like those of the original Apple Airpods. That is, they sit in the outer ear.

The Airpods Pro have a snugger fit. This means the physical hardware does some of the work when it comes to cutting out external noise.

Huawei Freebuds 3
Huawei Freebuds 3 – Black is the new black

Physically the Airpods have a better look. For the New Zealand market the Freebuds come in a Darth Vader black version, although there is a Imperial Stormtrooper white option overseas. Apple’s wireless earbuds only come in white.

Latency advantage not obvious

Both products use their companies’ chip designs. Huawei claims lower latency, but in practice this, if it is true, is not noticeable. Both can automatically connect without the need to stuff around with Bluetooth settings.

Apple’s active noise cancellation is one-size-fits-all. You can tinker with the Huawei settings. I wouldn’t say one approach is better than the other, they are different.

Likewise, I struggle to say one sounds better than the other. The Freebuds seem to do a better job with electronic music, while I find the standard non-Pro Airpods handle classic and acoustic material better, but this is largely a matter of taste.

Apple’s wireless earbuds have better battery life, but not by much. One thing I like about Airpods is their wireless charging, but again this is not a deal breaker.

Taking everything in account, there’s not much in it. If you have an Apple phone and the budget choose Airpods. Huawei phone owners should go with Freebuds 3. Everyone else might as well toss a coin.

Huawei P30 Pro screen

The US government has blacklisted Huawei. As a result Google has stopped providing and supporting the Android software used on Huawei phones. American chip makers can no long supply technology to Huawei. The Huawei blacklist is part of a wider trade dispute between the US and China. 

Does the Huawei blacklist mean I have to stop using my phone?

No. If you already have a Huawei it will carry on working as normal for now.

Could China be spying on me through my Huawei phone?

Don’t be silly. If you’re like the average Android phone user you already let Facebook, Google and others spy on you. They make money that way.

If China wanted to casually spy on you it could buy data from one of those companies. If you’re a serious intelligence target for Chinese agents they’re probably able to spy on you regardless of your phone’s brand.

Is my Huawei phone a security risk?

No more than any other Android phone. Android is more prone to malware and nasty stuff than other phones, but this changes nothing in that department.

Huawei has not always been the best at providing necessary software updates and security patches in the past. The company says it will go on supporting existing customers.

I was thinking of buying a Huawei phone…

That’s probably not a great idea although if sales slump you may be able to pick up a bargain.

If you buy a Huawei phone today you’ll get updates for the current version of Android. It’s most likely you’ll get upgrades for the next version. After that things start to get tricky.

At the moment we’re on Android Pie. The next version, Android Q is due in a few months. Huawei has had all the code for both of these.

The next version, R, should turn up in about 14 months. The way things stand today Huawei won’t get that code.

Without official support, you could be cut adrift from the Android mothership in as little as 14 months. Huawei says it will continue with security upgrades, but you may struggle to run some apps once R is mainstream.

What about other Chinese Android phone brands?

How much of a gambler are you? The recent Huawei blacklist is specific to one company, but it’s part of an escalating trade war between the US and China. If you count yourself as cautious, then wait to see how the dust settles before buying an alternative Chinese brand.

Isn’t Android supposed to be open source?

Only up to a point.

Android has a number of layers. At the top there’s Huawei’s own software overlay, that’s EMUI on the premium phones. There’s a service layer which connects to things like the Google Play store, Maps and Gmail.

There’s a low level layer that connects the operating system to the hardware. The underlying Android operating system, AOSP is open source. Huawei will still be able to use that. It will be updated as normal.

However, Google usually shares this code with favoured phone makers months before the code is made public. Phone makers pay vast sums for this.

The blockade means Huawei will now get the code on release day, so users may wait months for upgrades.

This is how AOSP works for many smaller Chinese phone makers. If you’ve tried one of those phones you’ll know the customer experience often leaves much to be desired.

Yet it’s also how Huawei’s Chinese phone business works, so the company already knows how to deal with the restrictions.

The real problem is with those services or those of us living in western countries. If Google makes changes there could be problems for existing phone users.

Will I be cut off from Google services?

No. At least not for the foreseeable future. You might not get any new services introduced from next year on.

Is any of this covered by the Commerce Act?

That’s a good question. The simple answer is you probably won’t be able to use the Commerce Act as a way of getting your money back if the phone goes on working as normal. Although there’s an interesting precedent that suggests otherwise.

In the longer term you may have a case if a lack of software updates means the phone is, in effect, rendered useless before a reasonable period of time. 

If this happens, it won’t matter if Huawei is no longer active in New Zealand (see below). The phone retailer is liable, not the manufacturer.

What does this mean for Huawei’s phone business in New Zealand?

It’s possible the spat between the US and China blows over in a few weeks and things will return to normal. If not, it will soon be hard for Huawei to sell phones here. Anecdotal evidence says customers are already avoiding the brand.

That’s a shame because Huawei makes some of the best Android phones. It is the number three phone brand here. While it may not always look like it, Huawei acts to keep Samsung and Apple competitive.

Phones account for about half of Huawei’s revenue worldwide. Half of its sales are in China where losing Google isn’t a problem. So a quarter of the company’s revenue is at risk.

On the other hand, no-one knows if Huawei make much, if any, profit from phone sales. The Huawei blacklist could lead to the company exiting the phone market outside of China. If that’s the case, it could be doing Huawei a favour.

President Donald Trump’s latest attack on Huawei did not come as a surprise.

Earlier this month the US banned American companies from using equipment made by firms that pose a risk to national security. Chinese technology giant Huawei wasn’t named. It wasn’t necessary. Everyone got the hint.

At the same time, the US government asked American firms to withhold technology from those companies.

Google pulls Android Support

In the most dramatic move to date, Google said last week it would no longer supply the proprietary parts of its Android mobile operating system to Huawei.

At the same time American chip makers said they have stopped supplying the company. It turns out Huawei has been stockpiling some parts in anticipation of this move.

There has since been a temporary halt on the parts supply ban for existing Huawei products. Parts for new sales, which for a technology company come around fast, are still banned.

Billions at stake

We don’t know how Huawei’s investors reacted to the news, the company is in private ownership.

We do know that if the ban stays it will cost American firms billions of dollars in years to come. It could shut them out of the world’s largest consumer market. That’s been reflected in the share prices of Huawei’s US suppliers.

Trump, and America in general has been ratcheting up the pressure on Huawei for the best part of a year.

Things kicked-off in earnest months ago. Then, American officials warned the world that Chinese spies might use Huawei’s network hardware and phones.

It’s a story Huawei has denied often since spying accusations first emerged in Australia some years ago. Huawei also denies it has links to Chinese military.

Intelligence threat

More recently America threatened to withhold intelligence material for any ally with Huawei hardware on their networks.

It would be easy to dismiss America’s attack on Huawei as mere protectionism. That’s a clear part of what’s going on. Trump has since suggested he could clear up this spat if China cuts a new trade agreement with the US.

There is no evidence Huawei uses its network to spy on behalf of the Chinese government.

There is no smoking gun. Huawei’s accusers have not managed to dredge up any plausible documented evidence.

That speaks volumes.

Where Huawei is a threat

Still, Huawei represents a risk. That’s because Huawei dominates the telecommunications hardware market like no other company.

Telecommunications is essential, critical and strategic. It is a key infrastructure. Without it commerce and finance grind to a halt. So does almost everything else. Telecommunications touches almost every aspect of modern life.

America has suggested that while there’s no evidence of Huawei spying, it could hold countries to ransom.

Should, say, relations with a country deteriorate enough, China’s government might insist Huawei shuts networks. That would be a crippling blow to any economy.

Trade repercussions

It’s possible, but unlikely. The long-term repercussions for Chinese trade would be disastrous. Even threatening this would be fatal. After all who would trade with a partner who behaves like that?

And anyway, a shut-down would escalate matters. It could even tip relations over the brink with some countries. China can be aggressive, but there is no sign it is looking for a war.

There is more pressing long-term economic risk to America and the West. For the first time in living memory a Chinese company holds the key to an important, must have technology.

5G mobile

Huawei leads the way in 5G mobile telecommunications. Its technology is months, if not years, ahead of its rivals. The company has been the driving force behind the move to 5G for the past four or five years. Until the latest US intervention, it looked like Huawei would stay out in front.

A lot of the words and projections for 5G are hype. Yes it means more wireless bandwidth, but it is no more transformational than 4G or 3G.

Even so 5G is set to become a vital component of every country’s critical infrastructure. It’s not only about voice calls or web surfing. The technology is able to control power networks, sewage and logistics.

Huawei dominating this technology puts it in a very powerful position. By extension this could extend to China. The fear is the country could call in its favours from its home grown technology success story.

Technological dominance

We seen this kind of technology-lead dominance before. IBM was, in effect, the entire computing market until the late 1960s. It stayed in control of the sector until the 1980s. After that time Microsoft Windows and Intel processors defined the PC era.

In part these technologies contributed to America’s economic and technological pre-eminence. They helped America assert and project military power on a hitherto unseen scale.

There’s a fear Huawei and China could do the same1. Older readers may remember America had similar fears about Japanese technology. It appeared to pull ahead during the 1980s. The difference there was that Japan was never a military rival. 

Huawei already accounts for about a third of all telecommunications network hardware. Until recently it was on a growth trajectory. There is no reason to think that without intervention that proportion could climb to IBM or Microsoft levels of monopoly control.

Yet this frightens strategic thinkers in the US and other western nations.

Part of their concern is they worry about what it might mean for their industries if a Chinese company dominates a strategic market. They know how powerful this can be.

Embargoes

The US has often embargoed key technology product sales to out-of-favour countries. Indeed, an early chapter in the current Huawei spat came when the US accused it of violating Iran trade sanctions.

All this means Huawei doesn’t need to install backdoors in its 5G network hardware to be a threat. Not does it need to push out malicious code during software updates. There is no kill switch, but even if there was, it would be unnecessary. 

Huawei prepared for the US action. It stockpiled essential parts. It has its own mobile operating system under development and has worked to decouple its supply chains from the US.

Google that!

It’s hard to see how Huawei can stay competitive in phones without access to new Google software. It needs to offer Google search, Google Maps and other services that are now off limits. Chinese customers might live without them, customers in other markets demand and expect these services.

Huawei may stay competitive in network equipment in markets where it is still welcome. It may need US chips and software. China could, in theory either develop its own or source both elsewhere. That’s assuming the US doesn’t lean hard on other countries.

At this point things can go one of two ways. If it’s about the US putting trade pressure on China, things could blow over, albeit with some damage.

Huawei knock-out?

That’s the optimistic view. A more negative view is that America aimed to knock out China’s most prestigious technology company. It did so either to make a point or to stop Huawei from becoming too powerful.

This can backfire. China is powerful, rich and smart. America may have a more advanced software industry. It’s chip makers may be better, but China could view this as a wake up call to bolster its own industries.

Only a brave person would bet on China not catching up if it puts its shoulder to the wheel. America may have created the monster it had hoped to strangle at birth.

Disclaimer Huawei has flown me overseas three times in the last five years. I aim to take a balanced view of this story, but I’m only human. If you think I’m missing anything important feel free to comment.


  1. This argument forgets the UK government revelation that Huawei’s network software is a shambles. ↩︎