Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that Huawei just announced its mobile phone operating system HarmonyOS will replace Android and will challenge Google. However, none of the major Chinese domestic mobile phone heavyweights, such as Xiaomi, Oppo and Vivo plan to use HarmonyOS. It’s worth noting that Android is an open-source system and anyone can use it. What Huawei cannot use is the Google suite of applications (such as Gmail), which do not have a large share of the Chinese market. To the Chinese mobile phone manufacturers, the important part of a mobile device operating system is its ecosystem. The Mobile device hardware profit margin for these manufacturers is extremely narrow. Software and related services provide their primary profitable income, and Huawei’s new HarmonyOS has a very limited number of apps. Also, in the past, Huawei took a very competitive approach in dealing with other domestic manufacturers. The mobile vendors are very hesitant to rely heavily on Huawei. In fact, Google has been a lot more neutral than Huawei when developing business relationships with the Chinese manufacturers. Huawei used to promise not to enter the mobile phone market – then it became the world’s second largest mobile phone maker, crushing all domestic competitors.
Source: NetEase, June 4, 2021
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