Huawei proffers $1.5bn in bid to lure software developers

Chinese technology group Huawei is spending $1.5bn to recruit software developers for its computing platforms and offering to share 5G technology, as it seeks new partners in the face of US sanctions that cut it off from suppliers including Google. 

Huawei’s search for more developers is made urgent by the fact that its new series of smartphones, to be launched later this week, will not have licensed access to Google’s apps.

As part of its outreach Huawei has also offered to sell its 5G technology to foreign companies — a move that rotating chief executive Ken Hu on Wednesday said was meant to “lessen people’s security concerns”.

The US government views Huawei as a potential spy on behalf of the Chinese government, an allegation the company denies. Washington has put Huawei on a blacklist that has largely blocked US suppliers from selling to the company, and has lobbied US allies to cut the company out of their 5G mobile networks.

Last week, in interviews with the New York Times and The Economist, Huawei’s founder Ren Zhengfei said the company had offered to license its 5G technology to foreign companies that could then manufacture 5G telecoms equipment and install it in networks outside of China, competing with Huawei abroad.

Such a proposal would “make the international 5G supply chain more competitive, and would certainly benefit consumers”, Mr Hu said at the telecoms company’s annual conference in Shanghai.

He said Huawei had won over 50 5G contracts globally, and that although the new ones did not feed through to increased sales this year, he expected a revenue bump next year when 5G is expected to roll out on a commercial scale in China.

Despite being cut off from US suppliers that provide the company with crucial chips for its smartphones and telecoms equipment, Huawei’s self-reported sales increased 23 per cent in the first half of the year. 

But pressure on the company to resolve the US sanctions issue is growing, because new smartphones — such as the Mate 30 series, due out later this week — will not have access to Google’s licensed apps under the current US Entity List restrictions.

Whether Huawei could continue to use Google’s apps has been up in the air since the Entity List came into effect in May.

Google is one of a large number of US suppliers that have been waiting months for a result on their applications for exemptions to the ban. President Donald Trump promised in July that the applications would be processed quickly, but none has yet been granted.

For Huawei, the worst-case scenario for its international customers already accustomed to the Google app ecosystem would be having to give up Google’s apps, such as the Play app store. Analysts expect the Mate 30 series to ship with an open-source version of Google’s Android operating system without Google apps pre-installed.

Huawei is also preparing its own version of Android, called HarmonyOS, although admits it will be difficult to build a new ecosystem and that it will need to convince developers to write apps for its new operating system.

The company will spend $1.5bn to expand its pool of 1.3m existing partners in its “Fertile Soil” developer program — launched in 2015 with a $1bn payout — to 5m, Mr Hu said.

Via Financial Times