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Google to drop Huawei

Huawei could quickly lose its grip on the No. 2 ranking in worldwide cellphone sales after Google announced it would comply with U.S. government restrictions meant to punish the Chinese tech powerhouse.

The Trump administration's move, which effectively bars U.S. firms from selling components and software to Huawei, ups the ante in a trade war between Washington and Beijing that partly reflects a struggle for global economic and technological dominance.

Google said it would continue to support existing Huawei smartphones but future devices will not have its flagship apps and services, including maps, Gmail and search. Only basic services would be available for future versions of the Android operating system on Huawei's smartphones.

Though the U.S. Commerce Department grants exceptions, the ban announced last week on all purchases of U.S. technology is thus apt to badly hurt Huawei, analysts say.

Washington claims Huawei poses a national security threat, and its placement on the so-called Entity List by the Trump administration last week is widely seen as intended to persuade resistant U.S. allies in Europe to exclude Huawei equipment from their next-generation wireless networks, known as 5G.

"This is major crisis for Huawei. Instead of being the world's largest handset manufacturer this year, it will struggle to stay two, but probably fall behind," analyst Roger Entner said. "How competitive is a smartphone without the most well-known and popular apps?"

Huawei will likely use its own, stripped-down version of Android, whose basic code is provided free of charge by Google. But the Mountain View, California, company said Huawei would not be authorized to use other Google software and services if the sanctions go forward as announced.

Google could seek exemptions, but would not comment on whether it planned to do so.

Entner, founder of Recon Analytics, said Google itself won't feel a large direct impact, "as consumers will shift to other Android devices. The biggest concern is not to be caught in the crossfire of two governments."

Gartner analyst Tuong Nguyen said 48% of Huawei's phone shipments last year were outside of China and the company will need to scramble not to lose market share.

Samsung led global smartphone sales in the first quarter of this year with a 23.1% share. Huawei was second with 19%, followed by Apple at 11.7%, according to IDC.



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