Kagan: Huawei will have a rough year in 2020

The pressure is increasing on Huawei. They need to prove they can continue to make it without Google Android and US chips. Huawei introduced their first folding smartphone with their own HarmonyOS. It’s called the Mate X. It will compete with a growing number of competitors like the Samsung Galaxy Fold, Motorola Razr and more. Let’s take a closer look at whether this will be successful or not without US technology.

Huawei had a great year in 2019. The question many are asking today is, what about 2020? The expectation from many is going forward, things will start to slow down. I think it will be more of a mixed bag depending on the country.

I think Huawei will continue to grow, however that growth level will be lower than last year. It all depends on how each country proceeds. Some will jump all in like in the past. Others will take a more cautious approach. Still others will avoid them altogether.

Huawei faces slower 2020 after hot 2019

One challenge the company faces is it can no longer use Google Android. So, they have created their own HarmonyOS, to replace Android. If Huawei is successful with HarmonyOS, it will finally prove that the two biggest competitors, Apple iPhone and Google Android no longer have a lock on the wireless industry.

However, these two hold the vast majority of market share within the US marketplace and in fact, worldwide. Others have tried to compete and failed.

So, the Mate X and HarmonyOS launch is a real test for Huawei. Many competitors have tried to launch their own OS and have all struggled at best. The big two are still the big two.

That’s a significant challenge Huawei faces going forward. It’s a challenge in China and other markets in the world.

Will Huawei succeed in China long-term with HarmonyOS?

Because of that, I would have said that Huawei faces an uphill climb with their new operating system, except for one area.

On one hand, the US blocking Huawei seems to have caused patriotic pushback on the Chinese marketplace. China is a very proud land and that may give the extra nudge to keep them successful, there anyway.

On the other hand, I have been reading recent news stories of how Chinese users are increasingly turning away from Huawei. So, the truth is, we really don’t know what to believe about Huawei in China going forward.

This Chinese patriotism may only extend to China. Where Huawei does business worldwide, other countries users may not be as willing to forgo Google Android.

That means Huawei may have a harder time selling HarmonyOS based smartphones in places other than China since Apple iPhone and Google Android phones are sold everywhere.

Huawei global growth prospects

The network and infrastructure are less impacted worldwide than the handset market. I see them continuing to do business with their steep discounts on networks in other countries. The reason is simple… it’s more affordable for other governments and networks and money speaks louder than words in many countries.

Will this stay strong or will this weaken over time?

Based on these confusing factors, I see Huawei continuing to grow on the network and infrastructure side of their business in a variety of countries for now. I also see them potentially continuing to grow in China on the handset and smartphone side. The question is about long term growth.

So, much of Huawei success on the handset side in the future depends on how much users like HarmonyOS. If it is popular, this could propel Huawei globally. We’ll just have to wait and see what happens next.

Based on the consumers unbridled love of both Apple iPhone and Google Android, and what we have seen with other competitors, 2020 and beyond may be a more difficult journey for Huawei.