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In 2020, for the first time in Huawei’s history, the company became the largest seller of smartphones globally (1). This is likely an effect of the pandemic – China was affected first but was able to control the situation internally, which allowed the country to recover. A report from Statista (2) shows that China also has the largest number of smartphone buyers. The report reveals that the United States is the third largest consumer of smartphones, therefore the ban on Huawei in the US is likely to impact the company’s market share and global position.

The US decided to ban Huawei as officials believe it is using equipment for espionage. For this reason, the US chose not to extend Huawei’s license. Following the US ban, Donald Trump has been putting pressure on other countries to follow suit and ban Huawei from its 5G networks. As a result of the pressure placed on the UK, Boris Johnson also decided to ban Huawei from 5G telecom networks (3).

Dowden, the UK culture secretary, suggests that we need to ‘have confidence in the security and resilience of the infrastructure’ (4) upon which 5G is built. But the UK government perceives Huawei as a threat to infrastructure, which is why the decision was made to ban Huawei from 5G.

But how will this ban impact the UK? It is likely to affect BT, Three and Vodafone (5). There are likely to be many network interruptions and blackouts. The market share of Apple and Samsung is set to increase as more customers look to ‘switch over’. The ban may lead to many unhappy customers in the UK for another reason – many customers look for a good camera when buying a smartphone and according to Huawei smartphone owners in the UK, the Huawei camera is ‘better than Samsung’.

The increase in Samsung and Apple shares in the US, the UK and other countries that follow in the footsteps of the US, will provide these firms with higher global dominance. The firms may require regulation as a result, which can be achieved in the UK through the Competition Policy Authority.

 

References

  1. https://www.bbc.co.uk/news/technology-53594435

  2. https://www.statista.com/statistics/748053/worldwide-top-countries-smartphone-users/

  3. https://www.theguardian.com/technology/2020/jul/18/pressure-from-trump-led-to-5g-ban-britain-tells-huawei

  4. https://www.reuters.com/article/us-britain-huawei-reaction-instantview-idINKCN24F1JL

  5. https://www.ft.com/content/abadf6d9-361f-40d4-a7f2-fdd734e8fdf7

 

Sonia is a Postgraduate student studying MSc Economics and Finance at King's College London. During her undergraduate degree she spent a year abroad studying at NTU Singapore and working in Germany her birth country. As a woman who desires to work in the financial sector you can catch her regularly reading the Financial Times and the Economist. She enjoys photography, painting as well as taking regular trips around the world.  
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