Trump’s ban on Huawei: Implications and lessons for business, consumers, and societies?

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Trump’s ban on Huawei: Implications and lessons for business, consumers, and societies?

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  • The ban exposes the alarming dominance of a few companies, namely, Google, Apple, Amazon and Microsoft over nearly all mobile and cloud computing platforms. We have a very high risk of exposure to these companies as consumers, businesses, and governments, giving rise to a few questions: Is there now a need to have a third mobile operating system from outside the United States? Would we need more diverse platforms if the trade wars persist? Dependence on just a few suppliers needs to be addressed.  We need to make it easy to port applications across multiple ecosystems. 
  • Even if the ban is eventually lifted, the scars from this incident are likely to remain and have a long-term impact on the industry as a whole.  The Trump administrations order also leaves a lasting legacy in terms of business continuity planning for the technology industry. Market participants now always need to prepare for a plan B when procuring from Huawei.  As an industry, procurement teams are likely to start demanding the list of every component supplier (both hardware and software) for every product being shipped to gauge exposure to geopolitical risks.  
  • Globally, 5G rollouts are expected to be delayed between 12 and 18 months.  The cost of 5G is likely to increase from 15% to 20% as demand likely leans toward European and US suppliers to circumvent geopolitical risks.  The high cost of 5G will accelerate M&As among telecom service providers who are looking for scale and efficiencies.   
  • Vertical industry applications such as autonomous cars are touted as the key demand drivers for 5G.  This development may now force many companies to re-evaluate their platform strategy and the risks of being married to one of the two platforms. 
  • Governments need to be extremely careful to ensure they do not allow monopolies and duopolies to emerge in the many platform plays happening in the digital world. As consumers, we have an extremely high dependence on a few applications which may now be considered as essential citizen services. 
  • Global companies like Huawei need to operate with the highest degree of transparency and governance. Despite making significant progress in this regard in recent years, the rapid growth pace underscores the necessity to adopt these characteristics from DAY ONE in the business. 
  • In 2018, 200 million Huawei Android smartphone sales were sold outside of the US.  Google did not have a choice but to accede to the Trump administration’s ban, forcing it to restrict Huawei from using its Android operating system even outside the US.  Google’s stance reflects its America First approach and global citizen second.  This will be the challenge every global company will need to be prepared to face.  The ban creates an opportunity for a new kind of technology company, one that is Transparent First, Privacy First, and Global First. 

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