Huawei can buy from US suppliers again — but things will never be the same

U.S. President Donald Trump has handed Huawei a lifeline after he said that U.S. companies are permitted to sell goods to the embattled Chinese tech firm following more than a month of uncertainty.

It’s been a pretty dismal past month for Huawei since the American government added it and 70 of its affiliates to an “entity list” which forbids U.S. companies from doing business with it. The ramifications of the move were huge across Huawei’s networking and consumer devices businesses. A range of chip companies reportedly forced to sever ties while Google, which provides Android for Huawei devices, also froze its relationship. Speaking this month.

All told, Huawei founder and chief executive Ren Zhengfei said recently that the ban would cost the Chinese tech firm — the world’s third-larger seller of smartphones — some $ 30 billion in lost revenue of the next two years.

Now, however, the Trump administration has provided a reprieve, at least based on the President’s comments following a meeting with Chinese premier Xi Jinping at the G20 summit this weekend.

“US companies can sell their equipment to Huawei. We’re talking about equipment where there’s no great national security problem with it,” the U.S. President said.

Those comments perhaps contradict some in the US administration who saw the Huawei blacklisting as a way to strangle the company and its global ambitions, which are deemed by some analysts to be a threat to America.

Despite the good news, any mutual trust has been broken and things are unlikely to be the same again.

America’s almost casual move to blacklist Huawei — the latest in a series of strategies in its ongoing trade battle with China — exemplifies just how dependent the company has become on the U.S. to simply function.

Huawei has taken steps to hedge its reliance on America, including the development of its own operating system to replace Android and its own backup chips, and you can expect that these projects will go into overdrive to ensure that Huawei doesn’t find itself in a similar position again in the future.

Of course, decoupling its supply chain from US partners is no easy task both in terms of software and components. It remains to be seen if Huawei could maintain its current business level — which included 59 million smartphones in the last quarter and total revenue of $ 107.4 billion in 2018 — with non-US components and software but this episode is a reminder that it must have a solid contingency policy in case it becomes a political chess piece again in the future.

Beyond aiding Huawei, Trump’s move will boost Google and other Huawei partners who invested significant time and resources into developing a relationship with Huawei to boost their own businesses through its business.

Indeed, speaking to press Trump, Trump admitted that US companies sell “a tremendous amount” of products to Huawei. Some “were not exactly happy that they couldn’t sell” to Huawei and it looks like that may have helped tipped this decision. But, then again, never say never — you’d imagine that the Huawei-Trump saga is far from over despite this latest twist.


Android – TechCrunch

Apple spent $60 billion with American suppliers in 2018

Apple has released an update on its spendings in the U.S. According to the company, Apple is now working with 9,000 different companies in the U.S. Those companies mostly work on hardware components and chipsets for Apple’s devices.

You may remember that Apple announced last year it would spend $ 390 million to expand Finisar’s production in the U.S. Finisar has been working on a key component for the iPhone and iPad Pro — the TrueDepth camera system.

That investment was part of a commitment to spend $ 1 billion in U.S.-based companies with its Advanced Manufacturing Fund in order to build new facilities and help manufacturers.

But Apple is already spending much more money with American companies. In 2018 alone, Apple spent $ 60 billion, which represents a 10 percent increase compared to 2017. The company estimates that it represents around 450,000 jobs.

In addition to Finisar, Apple names a few partners in its announcement — Corning, Cincinnati Test Systems and Broadcom.

Finally, if you take into account everybody working for Apple in one way or another, there are now 2 million people in the U.S. helping Apple as an employee, a contractor, a store manager, a supplier, etc. This number is up from 600,000 in 2011.

Gadgets – TechCrunch

Falling iPad Mini Demand Claims Show Why Watching Suppliers For Apple Success Misses The Point

ipad-mini-white

This week, Bloomberg sparked a number of headlines with reports that iPad mini demand was failing based on supplier Pegatron’s earnings numbers as revealed at an investor conference. Those claims were later refuted by Pegatron CEO Jason Cheng, who argued that Bloomberg’s Tim Culpan had misquoted him to reach his conclusion about iPad mini numbers.

The problem here is one that comes up repeatedly for Apple watchers, namely that of trying to divine from scattered sources what the future holds for the iPhone maker. Reports of slowdowns, layoffs or weak fiscal results from any number of supplier companies, including Pegatron, Foxconn and Sharp have bloggers feverishly pounding keys, predicting dire straits for Apple to come. The problem is, these have never been a very strong indicator of what’s actually going on with Cupertino and its products, and for good reason.

As Fortune’s Phillip Elmer-DeWitt learned from Cheng via email, Pegatron has a wide customer base and never breaks out how each of those are affecting its bottom line or its quarterly financial outlook. Pegatron has its fingers in all kinds of pies, including home video game consoles and e-readers, both of which are currently suffering badly in terms of consumer sales.

Here’s a look back at some equally dire reports from recent memory that also turned out not to have any relation whatsoever to anything Apple was doing, performance-wise.

In the best of cases, supply chain reports offers some vague insight into the larger picture of Apple’s inventory channels, but when looked to for solid indicators of performance, they’re about as dependable as using a magic 8 ball. The iPad mini, by all reasonable accounts, looks to be a very strong performer for Apple, and it’s very likely we’ll see that trend continue.

TechCrunch » Gadgets

Apple Reportedly Changes Battery Suppliers As Samsung Walks

ipad-3-battery

Apple has reportedly changed its battery suppliers for the iPad and MacBook lines to Amperex Technology Limited and Tianjin Lishen Battery, both Chinese firms, after Samsung SDI (Samsung’s battery-producing subsidiary) stopped supplying Apple, the China Business News reports. If accurate, this would be just the latest in a series of rifts between the two companies.

Samsung is a crucial component partner for Apple and will remain so at least in the near future, according to CEO Tim Cook on Apple’s most recent quarterly conference call. But recently, rumors have been swirling that the supplier relationship between Samsung and Apple is in the process of eroding. In the past couple of months, we’ve seen reports that Samsung had increased processor prices for Apple (which the company denied) and also claims that Apple was terminating the display supply relationship with the Korean company (also later denied).

The two companies are locked in a global patent battle and are each other’s primary competition in the global smartphone race. In light of the strained relationship, it’s natural that people should expect their supply chain arrangements to suffer, too. And there has been tangible proof; Apple did indeed remove crucial design components for its A-series processors out of Samsung’s hands and in-house, which reduces Samsung to just a manufactory partner. Apple has also reportedly been grooming TSMC and others to take over chip production in the future.

But for all the reports, there seems to be little hard evidence that the relationship is indeed collapsing. Put simply, Samsung has capacity that Apple can’t find elsewhere, and Apple has a very lucrative contract with Samsung, meaning changing their relationship quickly isn’t easy or beneficial to either.

This battery supplier report is just the latest in a series of indicators that the relationship between the two could be undergoing a slow but inevitable shift, but don’t expect to see Apple and Samsung walk away from each other entirely for quite a while yet.


TechCrunch » Gadgets