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article imageOp-Ed: Microsoft has yet to make an official announcement on Huawei

By Ken Hanly     Jun 2, 2019 in Technology
Because of the recent US trade ban, Huawei has lost almost all of its large US partners including Google, Corning, and ARM creating a crisis for the company. However, some major partners are laying low among the largest is Microsoft.
Microsoft yet to make a statement on relations with Huawei
Microsoft has quietly pulled Huawei laptops from its site. That suggests some withdrawal of services but Microsoft has not yet indicated what its response will be to the recently announced ban. Microsoft is one of Huawei's biggest partners. Microsoft directly licences and updates Windows on Huawei laptops.
Most in the industry assume that Micosoft will ultimately take the same position as Google and others, for the simple reason that it would be too costly not to. However, this may force Huawei to develop its own technology. It has been developing its own operating system since 2011 for smartphones. If worst comes to worst the company could always use some form of Linux for its laptops.
What would be the punishment for violating US ban?
There are numerous penalties that could be imposed for violation of the ban. These could range from civil fines to denial orders. The latter would place explicit limits on what the violating company can export. If the violations are serious enough companies can even face criminal charges. Microsoft is quite reliable on government and international contracts for its business. It is likely the company would comply with the ban rather than lose those contracts. Of course the company is also going to lose if it does comply as it loses profitable licensing contracts in China.
As a recent CNN article
points out: "China's Huawei bought $70 billion worth of components and parts last year from 13,000 suppliers. Of that, about $11 billion was spent on products from dozens of US businesses, including computer chips from Qualcomm (QCOM) and Broadcom (AVGO), as well as Microsoft (MSFT) software and Google's (GOOGL) Android."
The ban is a lose-lose situation. It will force Huawei to depend more on hardware and software of its own, other Chinese companies, or companies outside the US who do not worry about repercussions from dealing with the company.
Companies outside the US might be forced to enforce the ban
Any foreign company that licenses technology from the US faces the possible loss of those licenses if it does not go along with the US ban. This explains why companies such as ARM not based in the US nevertheless follow US policy.
Microsoft is likely just playing for time. It does not want to risk losing its Chinese market unless it is forced to. No doubt the company see the Huawei ban as part of a tactic to force China to come to a deal. Trump has hinted that Huawei could be part of any final deal. However, given the US constant rhetoric about Huawei being a dangerous security risk any deal with Huawei would show that the security risk is not nearly as great as the Trump administration has claimed.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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