Huawei Technologies debuted its much-anticipated operating system – HarmonyOS, known as Hongmeng in Chinese – as it launched a smart display under its Honor brand. The new smart displays come with a pop-up camera for video chat and facial recognition and allow all devices equipped with the company’s self-developed HarmonyOS to interact in a seamless way, Honor President George Zhao said. Users can share information, text notes, and conduct video chats between the smart displays and smartphones seamlessly. With a starting price tag of CNY3,799, the Honor display is equipped with the HiSilicon “Honghu 818” intelligent chipset and a smart pop-up camera for large screens, allowing the users to operate the display through voice chat and enjoy personalized features driven by artificial intelligence (AI), according to Zhao.

“Many people have stopped using TVs in the family, and we are trying to subvert the idea,” Richard Yu, Huawei’s Director of Mobile Devices, said at the company’s developer conference in Dongguan, China. Huawei’s Harmony operating system supports a range of products and systems within its own ecosystem, including smartphones, computers, tablets, TVs, cars and smart wearables. The company is also expected to launch smart displays under the Huawei band in September. The official launch of Huawei’s self-developed OS marks a milestone for the Chinese company, which is currently affected by a U.S. trade ban and restricted in its ability to buy a range of American-made technology, including Google’s Android for smartphones and Microsoft’s Windows operating system for personal computers, the South China Morning Post reports.

Migrating apps from Android to the new system is relatively easy but the company would prefer to continue using Google’s Android OS on its smartphones if allowed, Yu said during the launch of the HarmonyOS. However, “Huawei’s HarmonyOS is ready for smartphones anytime,” he added. Huawei plans to invest CNY10 billion in a new R&D facility that can house 30,000 to 40,000 employees. The company has 36 joint innovation centers and 14 R&D institutes around the world. It also plans to attract 20 to 30 top talents in several fields – including mathematics, semiconductors and chemistry – and pay them five times as much as their peers working for other companies.

China’s 5G advancements by its biggest technology firms, including Huawei, ZTE, Tencent and Baidu, will be major attractions at the China International Fair for Investment and Trade in Xiamen from September 8 to 11. Former U.S. Commerce Secretary Carlos Gutierrez is expected to attend the fair, as well as representatives from Coca Cola, Siemens, Schneider Electric and Louis Dreyfus. Sprint Corp said it would launch a 5G smartphone made by OnePlus, becoming the second U.S. wireless carrier after T-Mobile to offer a cell phone made by the Chinese company. Sprint is already offering 5G smartphones from Taiwan’s HTC and South Korean mobile makers Samsung Electronics and LG Display.

The Trump administration announced a ban on U.S. federal agencies buying equipment and services from Chinese companies, including Huawei, rival ZTE, radio systems provider Hytera, camera maker Hangzhou Hikvision Digital Technology and video surveillance products maker Dahua Technology, citing national security concerns. The new rule, which takes effect on August 13, is a significant step in the U.S. government’s ongoing effort to crack down on Chinese technology it regards as a potential national security threat. The announcement comes a year before Congress’ mandated deadline of August 2020 for all federal contractors to stop doing business with these companies. By August of next year, the administration will be required to comply with a broader and separate ban that prohibits the government from procuring services and products from any company that uses equipment from Huawei. The company has filed a lawsuit against the U.S. government over the restrictions.

The White House is holding off on a decision to grant licenses to allow U.S. to restart sales to Huawei after Beijing said it was halting purchases of U.S. farm products. U.S. Commerce Secretary Wilbur Ross said his department has received 50 requests and that a decision on them was pending. American businesses require a special license to supply goods to Huawei after the U.S. added the company to a trade blacklist in May over national security concerns.

Meanwhile, China has told India not to block Huawei from doing business in the country, warning there could be consequences for Indian firms operating in China. India is due to hold trials for installing a next-generation 5G network in the next few months, but has not decided yet to invite Huawei to take part, Telecoms Minister Ravi Shankar Prasad has said. India’s Ambassador in Beijing, Vikram Misri, was called to the Chinese Foreign Ministry on July 10 to hear China’s concerns about the U.S. campaign to keep Huawei out of 5G mobile infrastructure worldwide.

In related technology news, Chinese chip maker Loongson Technology plans to invest CNY15 billion in a smart industry park in Jinhua, Zhejiang province, aimed at attracting smart devices manufacturers and research and development enterprises. The park will cover an area of over 5.3 square kilometers. Four research institutes and 51 companies have already reached an initial agreement with the park, including Hong Kong-listed IT service provider Digital China and Beijing-based software company Tsinghua Tongfang. Loongson is one of the few companies in China that can independently design central processing units.

ZTE Corp announced that its 5G smartphone has been available for orders in China since July 23 as the Chinese smartphone maker races to gain a foothold in the increasingly competitive 5G smartphone market. It is the country’s first 5G phone model to have its price announced and to have entered the pre-sale phase. The ZTE Axon 10 Pro 5G is powered by Qualcomm’s Snapdragon 855 mobile platform and a 4000 mAh capacity battery with wireless charging support. The handset comes equipped with a 6.47-inch AMOLED display with a waterdrop notch. It also features a triple camera setup which includes a 48-megapixel main sensor, an ultra-wide 20-megapixel lens and a 8-megapixel telephoto lens. The handset will be put on sale through ZTE’s official online store as well as e-commerce platforms including JD, TMall.com and Suning.com for CNY4,999. The pre-sale announcement comes a week after the first batch of eight 5G phone models obtained the quality certificate needed to hit the market. “We believe sales of 5G smartphones in China can only take up 1% to 2% of the whole market this year. We don’t expect large sales of ZTE’s 5G smartphone this year – probably hundreds of thousands of units. But the launch is a boost to the company’s brand,” said James Yan, Research Director at Counterpoint Technology Market Research.

Huawei presented its 5G smartphone, the Mate 20X 5G, on July 26. Powered by a Kirin 980 processor with the 7-nanometer Balong 5000 5G multi-mode chipset, the phone, priced at CNY6,199, is the only mobile phone in the world that supports both stand-alone (SA) and non-stand-alone (NSA) 5G networks, as well as the earlier 4G, 3G and 2G standards. The phone will be on sale on August 16. The price is much lower than the CNY10,000 analysts expected. “At the present time, all smartphone vendors except Huawei have to rely on chipsets from other companies. This may place Huawei at an advantageous position in the 5G market,” said Roger Sheng, VP Analyst at consultancy Gartner. In July, Monaco became the first country in Europe to set up a 5G mobile phone network, using Huawei technology.

Meanwhile, the U.S. is worrying that it is lagging behind China in the 5G race, and the sanctions placed on Huawei are not helping it to catch up. The technology promises to revolutionize everything from the “internet of things” (IoT) to autonomous driving, smart cities and virtual reality (VR), with billions of dollars of economic benefit set to accrue to countries able to keep up with it. The U.S. Defense Innovation Board issued a preliminary report on 5G’s risks and opportunities for the Pentagon, finding that if current trends were maintained, “5G has the potential to skew future networks even further in the direction of China if it continues to lead”.

“From a marketshare perspective, Huawei is leading as No 1. In the 5G space, the U.S. is a leader in many facets of the ecosystem – with the main caveat that there is no U.S. company making radio access networking equipment,” said Mark Hung, Vice President of Technology and Engineering at industry trade group Wi-fi Alliance in Santa Clara, California. “There is no U.S. company that could imminently do something similar to Huawei, Ericsson or Nokia outside of an acquisition of an existing player,” he added.

The battle over 5G smartphones has intensified in China, with the first batch of eight 5G phone models having obtained the quality certificate needed to hit the market. Huawei’s four 5G models, including Mate 20X 5G and Mate X 5G, have obtained China Compulsory Certification, according to the website of the China Quality Certification Center. Oppo, Vivo, ZTE and One Plus also each have one 5G model that secured the certificate. Xiaomi, Samsung and Lenovo failed to make their way into the first batch. Xiaomi said that it will apply to conduct quality tests this week in accordance with its product launch schedule.

Smartphones in China need to acquire three licenses before they are allowed to be sold to the public. The licenses include China Compulsory Certification, a license to allow smartphones to get connected to the 5G network, and the Radio Type Approval Certification. Oppo said that its Oppo Reno 5G model has already secured all three licenses and the phone will be available in the China market in the third quarter of this year. Oppo’s Reno 5G has already been available in Switzerland since May. Huawei announced in June that its Mate 20X 5G had obtained the country’s first license to allow terminal telecommunication equipment to enter the 5G network in China. The company is scheduled to release the phone in the domestic market on July 26. Qin Fei, General Manager of Vivo’s telecom research institute, said the company’s 5G smartphone will hit the streets in August and the testing speed of its model has reached one gigabit per second.

Xiang Ligang, Director General of the Information Consumption Alliance, said this year will only see a very small number of 5G smartphones sold, but companies are all trying to have the first-mover advantage to appeal to consumers. According to a report by market research company Counterpoint, global 5G smartphone shipments are expected to reach 108.2 million units in 2021, up an estimated 255% year-on-year.

Huawei is still struggling to be allowed to participate in the building of 5G networks in Europe. A British parliamentary committee has told the government there are “no technical grounds” for banning the use of its equipment in Britain’s 5G network. Member of Parliament Norman Lamb said a ban on Huawei’s 5G equipment “would not constitute a proportionate response to the potential security threat posed by foreign suppliers”. He added that “banning Huawei would also reduce market competition, giving network operators less leverage on equipment vendors to demand high security standards.” But U.S. President Donald Trump’s administration has warned that a failure to restrict Huawei could jeopardize the UK’s chances of cutting a favorable trade deal after Britain leaves the European Union, the China Daily reports. The UK government plans to publish a telecom supply chain review by August, clarifying whether Huawei’s equipment is to be allowed. As things stand, all four major UK operators plan to limit Huawei’s involvement to “non-core” infrastructure, such as radio access networks.

Huawei said 28 of 50 commercial contracts for 5G that it signed globally are with operators in Europe. Finland’s Nokia and Sweden’s Ericsson had secured 43 contracts and 22 contracts as of the end June, respectively. Huawei’s Chinese rival, ZTE, has publicly announced 25 commercial deals. Huawei CEO Ren Zhengfei predicted a 30% gain in global handset shipments of 270 million in 2019 despite being on the U.S. trade blacklist. Huawei’s China smartphone market share increased to 46.1% in the second quarter, according to Kantar Worlpanel ComTech.

According to a Washington Post report, Huawei is now also suspected of violating U.S. export controls to furnish equipment to North Korea to build the country’s wireless network. Separately, Agence France-Presse reported that an investigation conducted by Czech public radio found that the Czech unit of Huawei “secretly collected personal data of customers, officials and business partners”. In response to the dual reports, Huawei denied having violated any rules imposed by the EU or the United Nations.

China’s internet companies used to be called copycats for creating clones of Western social media platforms back in their home market – but those days are long gone and that trend is now in reverse. Today, global internet companies from the U.S. to Southeast Asia are looking to replicate Chinese concepts – from models such as the all-in-one super app, to social commerce as well as short video, according to findings from the second edition of the China Internet Report 2019, launched at Hong Kong’s RISE conference. The report examines opportunities and challenges facing its technology-led industrial transformation. The report was authored by the South China Morning Post and its sister site Abacus, in conjunction with Edith Yeung, Managing Partner at blockchain venture capital fund Proof of Capital.

Companies such as Indonesian ride-hailing company Go-jek, Japan’s LINE messaging app and even Facebook in the U.S. are now moving towards the super-app model, originally pioneered by Tencent’s WeChat, the report found. The WeChat messaging app offers users a range of services from making mobile payments to ordering food deliveries, that can all be accessed without leaving the app. China is also leading the way in social e-commerce as well as short video. The short video craze was popularized by TikTok, an app by Chinese company Bytedance, that allows users to post 15-second video clips. TikTok took the world by storm and became the most downloaded app on the iOS app store for five consecutive quarters.

Another key trend for China technology development is in next-generation 5G technology networks. China currently holds the most number of 5G patents, and has 5G pilot projects going in over a dozen cities with a total population of 167 million, according to the report. Artificial intelligence (AI) is also being used on a massive scale in China, with applications ranging from paying one’s subway fare or checking into a hotel using facial recognition, to making custom recommendations for online shopping or browsing news online, the report found. The China Internet Report explores 11 key sectors that make up China’s technology landscape – including e-commerce, messaging, the sharing economy, 5G, AI, smartphones and smart devices. Expert commentary from industry leaders such as Lee Kai-fu of Sinovation Ventures, Razer Chief Executive Tan Minliang and Eric Xu, Managing Partner of GGV Capital, are included in the report, the South China Morning Post reports.

The China Internet Report 2019 is available free of charge and can be downloaded in full here.

President Donald Trump’s decision to allow U.S. companies to continue selling to Huawei followed an extensive lobbying campaign by the U.S. semiconductor industry that argued the ban could hurt America’s economic and national security. In multiple high-level meetings and a letter to the Commerce Department, the companies argued for targeted action against Huawei Technologies instead of the blanket ban the Trump administration imposed in May. That includes identifying specific technologies that the Chinese company shouldn’t be given access to, while allowing U.S. firms to supply the rest.

The Semiconductor Industry Association (SIA), a trade group that represents companies including Intel, Broadcom and Qualcomm, told the Trump administration that its sanctions against the Chinese company will make them appear to be undependable partners, which will put them at a severe disadvantage globally.

Representatives of chip makers last month met with Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin to argue that the decision to place Huawei on the Entity List could hurt the country. In the letter, SIA said that the action risked cutting off its members from their largest market and hurting their ability to invest. At the same time, Huawei would in many cases be able to get components elsewhere, they argued.

“Overly broad restrictions that not only constrain the ability of U.S. semiconductor companies to conduct business around the world, but also casts U.S. companies as risky and undependable, puts at risk the success of this industry, which in turn impacts our national security,” the group wrote last month. Apparently Trump listened, telling Chinese President Xi Jinping in Osaka that American firms weren’t pleased with his Huawei policy and announcing that he had agreed to let them keep shipping some of their components and technology. He later clarified he will only allow them to sell “equipment if there is no great national emergency problem with it,” without offering more details. Trump’s comments stoked confusion among industry and analysts, and the White House has not yet announced specifics on the path forward for U.S. companies doing business with Huawei, the South China Morning Post reports.

China is U.S. chipmakers’ biggest market, providing about a third of revenue. They are arguing that not all exports to Huawei and its affiliates pose a security risk and that much of what is sold there is easily replaceable with non-U.S. products. But National Economic Council Director Larry Kudlow emphasized: “Anything to do with national security concerns will not receive a new license from the Commerce Department. I think that’s very important.”

Huawei Founder Ren Zhengfei said that Trump’s decision to relax the ban “would not have much impact on what we are currently doing. We will still focus on doing our own job right.” He added Huawei is willing to continue to buy products from U.S. companies.

In Britain, Vodafone confirmed it is continuing to use Huawei equipment in non-core parts of its network
infrastructure for the 5G rollout, even though Huawei equipment could be banned if the UK government were to join in United States-led restrictions on the Chinese company. Last week, Vodafone launched 5G in Birmingham, Bristol, Cardiff, Glasgow, Manchester, Liverpool and London. Twelve more cities will soon follow. “We are proud to be helping Vodafone open up a new world of seamless opportunities with their launch of 5G mobile services in the UK,” Victor Zhang, Senior Vice President of Huawei, told Xinhua News Agency. Vodafone recently also launched the first commercial services of its 5G mobile network in 15 Spanish cities, in 12 of them in cooperation with Huawei.