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After the US ramped up pressure on Huawei, the company has finally had to acknowledge its long-secret plans for an alternative OS.

Exclusive | Inside Huawei’s secretive plans to develop an operating system to rival Google’s Android

  • The OS issue took an extra urgency after the US government in mid-May placed Huawei and its affiliates on a trade blacklist
  • One of the biggest technical challenges for the Huawei OS under development has been its compatibility with Android, people say

Seven years ago, in a villa facing a lake in Shenzhen, a small group of top Huawei Technologies executives headed by founder Ren Zhengfei held a closed-door meeting that lasted for several days.

Their mission was to brainstorm ideas on how Huawei should respond to the rising success of Google’s Android smartphone operating system (OS) around the world – software that it used on its own handsets. The underlying concern was that dependence on Android could render the company vulnerable to a US ban in the future.

The group agreed that Huawei should build a proprietary OS as a potential alternative to Android, according to people familiar with the matter, who declined to be identified because the information is private.

This meeting was later called the “lakeside talks” internally and access to documents relating to the gathering became highly restricted last year, the sources said.

Following the talks and direction from senior management, a specialist OS team led by executives including Eric Xu Zhijun, currently one of the three rotating chairmen for Huawei, was established and began to work on an OS under conditions of tight secrecy.

A specialised zone was created inside Huawei to house the OS team, with guards on the door. Only employees on the OS team had access to the specialist area, which was accessed with registered staff cards. Personal mobile phones were not allowed and had to be kept in an outside locker.

The OS project became an important part of Huawei 2012 Laboratories, which functions as the innovation, research and technology development arm of the company.

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The lab, which includes Huawei scholars and researchers, aims to drive cutting-edge innovation and sucks in billions of yuan of investments every year with no immediate contribution to company profits.

Most of the lab’s output is not public knowledge, including the OS project, the existence of which has only recently been acknowledged by Huawei.

Times have changed, though, since 2012 when a small group of international brands dominated the smartphone market and Huawei had less than a 5 per cent share of the global market. It is now the world’s second-biggest smartphone supplier and shipped a total of 206 million smartphones in 2018, according to IDC data, with nearly half of that number going to overseas markets.

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“As we have noted before, Huawei does have backup systems but only for use in extenuating circumstances. We fully support our partners' operating systems – we love using them and our customers love using them,” a Huawei spokesperson said in an emailed response.

“Android and Windows will always remain our first choices. In the meantime, we will do everything within our power to protect the interests of our customers.”

The topic of Huawei’s proprietary OS came up in March this year when Huawei’s mobile chief Richard Yu Chengdong told a German publication that the company had developed its own OS for both smartphones and computers, which could be used in the event that current systems provided by US technology giants were no longer available.

Huawei is currently facing a string of US charges, including that it stole trade secrets and violated economic sanctions. Photo: Reuters
Yu’s remarks came as the US began to ramp up pressure on Huawei over its participation in global 5G network roll-outs, warnings its allies that the Chinese company’s equipment posed a national security risk.

The world’s biggest telecommunications network equipment supplier is currently facing a string of US charges, including that the company stole trade secrets, violated economic sanctions and concealed its Iran business dealings via an unofficial subsidiary.

Huawei has repeatedly and vehemently denied these allegations, accusing the US of lacking evidence.

The OS issue took on extra urgency after the US government in mid-May placed Huawei and its affiliates on a trade blacklist that restricts the company from buying services and parts from US companies without approval.

Google and Microsoft, whose Android and Windows software Huawei largely relies upon in its smartphones, tablets and laptops, have both suspended access for new Huawei devices.

With only a 90-day reprieve from the US government until supplies are completely blocked, the Chinese company has finally had to acknowledge its long-secret plans for an alternative OS.

The Huawei OS is based on a microkernel that is light and can react quickly to adjustments and batches, according to the people with knowledge. Huawei engineers on the OS project have also studied Android and Apple’s iOS closely to learn from them.

One of the biggest technical challenges for the Huawei OS under development has been its compatibility with Android, one of the sources said.

Compatibility would enable a Huawei phone with its own OS to download and run Android apps seamlessly. Having a successful compatibility layer with Android would also mean that app developers around the world would not need to develop extra code for Huawei’s OS.

Past attempts by other companies to create an Android alternative have not been successful. Microsoft tried to develop a layer on its Windows OS that could run Android apps in the past but the American software giant failed as not all Android apps could run smoothly. Samsung also tried to replace Android on smartphones with its Tizen OS, but the effort failed.

Similarly, if Huawei OS cannot run Android apps then the lack of a supporting ecosystem of its own will remain a headache for the Chinese company.

Huawei registered the brand name “Huawei Hongmeng” last year in China, according to public trademark information, leading to speculation that this could be the name of the OS. It translates into English as “primordial world”. Separately the company applied to register “Huawei Ark OS” through the European Union Intellectual Property Office at the end of May, according to public records.

Publicly, Huawei has struck an optimistic note on the OS.

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Huawei’s self-developed OS would be able to support a range of products and systems within its ecosystem, including smartphones, computers, tablets, TVs, automobiles and smart wear, which would also be compatible with all Android applications and existing web applications, Yu was quoted as saying in a Securities Times report published on May 21.

“The Huawei OS is likely to hit the market as soon as this fall, and no later than spring next year,” Yu said in a WeChat group discussion. Although the screenshot of the conversation has been widely circulated on Chinese media, Huawei has declined to verify the information.

“I am not able to reveal more information beyond Yu’s remarks,” Zhao Ming, president of Honor, one of Huawei’s two smartphone brands, told reporters in Shanghai last month, when asked for an update on the proprietary OS.

Questions remain though over potential user experience issues and whether overseas customers will actually want a phone without popular Google apps.

Google’s Android and Apple’s proprietary iOS have a stranglehold on smartphone operating systems, accounting for 99.9 per cent of the global market, according to Gartner estimates last year.

Huawei was confident of its OS prospects in China as it believed developers and local consumers would support and build up the ecosystem quickly, the sources said. Huawei’s sales have continued to rise in the country as the Android system used on the mainland has never carried Google services, to comply with government restrictions.

But Bloomberg reported on June 5 that consumer fear in Europe that Huawei phones would quickly become out of date has meant demand for its devices has “dropped off a cliff” in some markets there, according to analysts.

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“It is not the best time to introduce an OS as Huawei would have liked to try it when they have an even bigger market share,” one analyst said. “Domestically it may be OK, but the company remains concerned about the international response.”

Huawei certainly needs some counterpunches after finding itself on the receiving end of a rapidly escalating US attack.

Although Huawei has long prepared for the worst case scenario, the arrest of its CFO Meng Wanzhou at the end of 2018 and events since have accelerated its plans, Huawei founder and CEO Ren Zhengfei – and also Meng’s father – told a group of Chinese media in late May.

As the US turns the screws on Huawei, launching its own OS has now taken on critical importance.

“Huawei is not fully prepared to launch the OS as the US [trade] ban came suddenly,” two people close to the matter said. Although the alternative to Android has been tested “thousands of times” inside the Huawei specialist team, “it hasn't yet been widely tested on consumer product lines, which means Huawei does not have a solid commercial release date yet.”