Huawei focuses on software as U.S. sanctions hurt hardware business

Huawei focuses on software as U.S. sanctions hurt hardware business

GUANGZHOU, China — Huawei is boosting its attempts in application parts like cloud computing and clever cars and trucks as U.S. sanctions harm its hardware company.

Previous week, Arcfox, a brand name below automaker BAIC Group, launched a vehicle with Huawei’s car or truck know-how. It bundled a cockpit kitted out with HarmonyOS, the functioning method Huawei released in 2019, as properly as autonomous driving abilities. Huawei will not be making automobiles and will instead concentrate on the technological innovation that powers them.

And on Sunday, Huawei launched some new cloud computing merchandise as it appears to be like to obstacle China’s current market leader, Alibaba.

Huawei claimed in a push launch on Sunday that it hopes the concentrate on cloud will “inevitably improve the proportion our software program and services organization has in our full income combine.”

The pivot to software package will come right after U.S. sanctions on Huawei have brought on smartphone product sales to plunge. The Chinese large was place on a blacklist recognized as the Entity Record in 2019 which limited its access to some American technological know-how. And previous yr, Washington moved to slash Huawei off type essential semiconductor supplies.

“Huawei is doubling down on pivoting to a software program/cloud and services enterprise,” Neil Shah, investigation director at Counterpoint Exploration, said.

As a final result of Washington’s sanctions, Shah reported the Chinese firm is “unable to procure essential semiconductor parts and related tech” from the U.S.

“Huawei with this exertion is getting like Google,” he claimed.

Google helps make the Android mobile running program employed by the the greater part of the world’s smartphones. The tech huge is also doing the job on in-automobile application and has a rapid-developing cloud computing small business.

Huawei has also touted its HarmonyOS as being equipped to operate throughout various devices from smartphones to TVs and cars and trucks.

The Huawei symbol is noticed at the IFA shopper technology honest, amid the coronavirus disease (COVID-19) outbreak, in Berlin, Germany September 3, 2020.

Michele Tantussi | Reuters

“The smartphone business is dealing with problems, they have another cell platform which is the motor vehicle for them to benefit from HarmonyOS. The automobile could be a huge cellular system to utilize and use HarmonyOS,” Will Wong, exploration manager at IDC stated.

In its pursuit of spots this kind of as autos and cloud, Huawei will glance to problem some of China’s major technology corporations. Alibaba is the sector leader in China for cloud computing. And in the auto house, a slew of businesses are vying for a slice of the pie from recognized gamers like Baidu to new entrants these as Xiaomi.

Insulation from geopolitics

At the rear of Huawei’s push into computer software is also an endeavor to insulate alone from possible geopolitics and any more steps from the U.S. Though Washington properly hindered Huawei’s access to chips, it could be a larger challenge to hurt the program company.

“It will be a lot more safeguarded when conversing about geopolitics from the U.S.,” IDC’s Wong reported.

He mentioned that the chipsets essential for cars need a much less state-of-the-art manufacturing process as well than smartphones.