A 90-day reprieve from the US government helps Huawei avert almost certain disaster

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In the wake of the US Commerce Department’s decision to place Huawei on an "Entity List," which prevents US companies from selling components to the Chinese telecom without a government license, the agency has issued a 90-day "temporary general license" to allow some companies to continue working with Huawei, according to CNBC.

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The new "temporary general license" allows US companies to supply Huawei with the products necessary to perform software updates on existing Huawei devices and those needed to maintain existing networks. However, the license doesn’t extend to components and parts for new devices. In that case, US suppliers will still have to get approval from the US government.

Here’s what it means: The 90-day exemption averts Huawei from almost certain disaster.

Following the news that Huawei was placed on the "Entity List," Google cut Huawei off from using its operating system (OS) and core apps on any new devices. Losing access to the Android OS and core Google apps, like the Google Play Store, would have crippled Huawei’s efforts to grow its smartphone presence in markets outside of China, where users are more entrenched in Google’s ecosystem: In April, Android OS owned a 73% share of the mobile OS market in Europe.

The abrupt cutoff left consumers scrambling to find out if they would still have access to core Android OS functionalities on their devices, and likely scared off consumers who were considering buying a new Huawei smartphone; for example, Huawei recently announced plans to bring its first 5G-compatible smartphone, the Mate 20 X 5G, to the UK this June.

After seeing major gains in foreign markets like Europe — Huawei’s market share by shipments in Europe ballooned to 21% in Q4 2018, from just 12% a year earlier — Huawei was likely preparing for a significant slowdown.

However, after the agency announced the extension, Google partially reverted its decision to stop supplying Huawei with its Android OS, saving the company’s devices from being dead in the water. The continued updates for Huawei’s devices buys the company time to implement a solution to keep its devices up-to-date without Google’s support. Having access to new security and software updates could be enough to quell consumers’ fears which, in turn, could stop them from jumping ship to a rival device maker, like Samsung.

The bigger picture: Though Huawei has prepared for a ban on using US products, it still isn’t completely ready to operate without US suppliers.

Huawei is still heavily reliant on US technologies, such as chips from Intel and Qualcomm. In preparation for a ban, Huawei stockpiled three months’ worth of chips and other vital components to build its smartphones. While this stockpile would give the Chinese firm time to find a new supplier, it also highlights that Huawei isn’t completely prepared to provide all of its own hardware; Huawei supplies over half (54%) of its own smartphone modems.

Also, despite Huawei divulging that it’s already built its own proprietary smartphone OS to be used as a backup in case it can no longer use Google’s Android OS, new reports claim that the software is "far from ready." And once it is, Huawei’s OS will still have an uphill battle, as evidenced by other tech giants’ attempts to break the Android-iOS duopoly.

For instance, Microsoft launched its latest smartphone OS, Windows 10 Mobile, in 2015, but struggled to convince app developers to build for the platform and eventually announced plans to end support for the system in December 2019.

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