Industry Voices — Baker: What chance does Huawei’s new Harmony OS have?

Huawei needs to find a new direction after being cut off by U.S. sanctions from having Google Mobile Services on its new phones. (FierceTelecom)
Industry Voices Simon Baker

On September 10 Huawei announced that it would place its own operating system (OS), Harmony, on some smartphone models both in China and in overseas markets.

It sounds like a bold move, but it is also an admission of defeat. Huawei needs to find a new direction after being cut off by U.S. sanctions from having Google Mobile Services on its new phones. Because of the U.S. Commerce Department’s Entity List, Huawei smartphones are no longer able to ship with Google-owned applications.

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To cope, Huawei has launched its own replacement app suite, Huawei Mobile Services, but this still lacks top U.S. sites including Facebook and WhatsApp. Harmony faces the same issues.

The launch looks inauspicious for several reasons. Just a reminder that beyond the story of Microsoft’s ill-starred attempts with Windows Mobile, more recent attempts in smartphones to get entry-level operating systems are finding the going tough too. Tizen, which was promoted by Samsung, has gone nowhere. The current candidate, KaiOS, has depended heavily on Reliance Jio in India, where it dovetails well with the free 4G streaming available on the Jio network. It remains to be seen whether it can gain much traction in other emerging markets, such as Africa.

A battle against the stream

Launching a new OS into the mainstream smartphone market is obviously a huge undertaking. Just think how difficult it will be now to push a Chinese OS in India, China’s biggest export smartphone market where a wave of patriotic fervor after the brutal clash of troops high up in the Kashmir at the end of June has produced a government push to restrict use of Chinese apps.

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Harmony is not just a new OS, it is one launched by a single producer of phones. Everyone else in the industry whose support it would need to thrive, is a rival. 

In addition, Huawei is sinking in overseas markets. The value of its sales outside China fell in the second quarter this year to less than a fifth of the global total, compared with a third in the same quarter a year ago, according to IDC data. Not the best position to try to launch something ambitious.

A chance at home, if the state wants it

While the international prospects do not look rosy, it could succeed at home if the government mandated use of Harmony in the domestic market. In terms of economic and technological independence, China has created the Great Firewall, which prevents the accessing of many Western apps in China, but at the same time it still allows a U.S. defined operating system (two with Apple iOS), to drive the devices all the Chinese apps are viewed on.

A state move to make Harmony a standard in China would need to bring onboard the BBK smartphone stable of vivo, OPPO and One Plus, along with Xiaomi. This is hard for the state. These other Chinese companies are not (at least yet) facing the U.S. sanctions that haunt Huawei; and as Huawei gets hit in overseas markets and turns its attention back home, its domestic rivals lose share. The more Huawei dominates the domestic market the more its competitors need to export to keep up their production volumes, so they will keep going with Android outside China as much as they can. 

Standard setting leads to inwardness

Separate from geopolitics, there is a temptation when a country reaches a certain level of technological leadership to start standard-setting on its own. China has its "Made in China 2025" plan to become more technologically independent, one aim of which is to establish advanced standards in key industries. History suggests that comes with a cost: Japan set its own technical norms in the late 1980s when it put forward Hi-Vision as an HDTV standard, which was incompatible as an upgrade with the current NTSC and PAL/Secam TV standards. Later Japan also set some norms for mobile phones, which were only for the domestic market. The impact of those moves hastened the decline of Japanese electronics companies in global markets, leaving them the one-country players they are mostly today.

The lesson from Japan is doubtless not lost on the Chinese, whose global economic rise has been driven by exports. For example, China has never developed an OS of its own in PCs, nor appeared to see the need to.

Waiting on the U.S. elections

Without the current U.S. pressure on Huawei, the question of a broad move away from Android by Huawei is unlikely to have come up. Not to be forgotten is that the U.S. attack on Huawei has subsequently taken a different direction, with a move against its chip operations. Production of Huawei’s Kirin processors was stopped in mid-September as a result. The latest U.S. move is one requiring licenses for supply of any chips to Huawei, which could potentially stop Huawei making phones at all. 

Under President Trump there has been a clear trend of ratcheting up the pressure on Huawei; the outcome of the November U.S. Presidential elections will be a key moment in the story. So far there is no reason to expect that a President Biden would ease the economic pressure on China dramatically, but he might pursue similar aims in a different way. 

Harmony is a very important concept in Chinese culture, and lies at the center of Confucian teaching and as a basic principle of nature, humanity and society. The Harmony OS has actually been around for a while at Huawei, where it was conceived as a means to link different Huawei products as the company expands into PCs, tablets and other electronics products. So we should not assume that Huawei really has such big ambitions for it now in phones. It's just that a time of discord is pushing Harmony into the limelight.

Simon Baker is program director for mobile phones and consumer devices at IDC EMEA and a coordinator of IDC global forecasting for the 5G smartphone market. He is a long-time analyst in the mobile phone arena. Please contact him at [email protected]

Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.