Trump ban won’t stop Huawei’s mobile domination: A scenario for 2025
- Looking beyond the blow-by-blow of the tech wars, Huawei could emerge stronger in mobile than ever before
- The Trump administration has prompted China to try to end its reliance on US silicon tech
- Understanding how this scenario could unfold will equip investors to see the longer-term significance of events today
It’s September 2025, and I’m spending my birthday on the top of Kilimanjaro. I’d hoped to spend my birthday here in 2020, but Covid-19 scuppered my plans, so now I’m back five years later. I’ve done a lot of riding in the foothills of Kili before, but this is the first time I’ve pedalled to the summit. It’s a beautiful, clear day. Before getting on our bikes for the long descent back to Moshi, my guide takes out his phone and snaps a picture of the sunrise.
This note isn’t about the joys of mountain biking is East Africa – of which there are many – but rather about my guide’s phone. Like most Africans aspiring to join the middle class, he has a mid-tier Chinese smartphone. However, in this version of 2025, his device no longer runs Android. Rather, like many people in emerging markets in the mid-2020s, it runs Huawei’s HarmonyOS. While feature phones accounted for 58% of the African market in 2020, this has dwindled to 20% by 2025, and HarmonyOS phones have taken up much of the difference, as well as taking market share from Android. And the events that led to this outcome began on 14 September 2020.
Figure 1: African mobile phone market share, 2020-25 (N.B. 2020 market share based on data from IDC and statscounter Global Stats)
Scenario planning is an academic discipline and a practical strategy tool in which one rigorously develops plausible scenarios for the future. While these stories may be entertaining, their true purpose is to facilitate learning and support decision making today. What do we need to do now to be ready for these plausible futures? What do they tell us about the longer-term significance of events today? What signposts should be watch for to know whether this scenario is unfolding? Although scenario analyses typically seek to map the space of all plausible futures, in this case I’ve focused on a single plausible future to help us understand the possible long-run significance of the events of September 2020. And now, back to the story...
2020: The Trump administration wins the battle against Huawei
In September 2020, the Trump administration thought that it had finally won its ongoing battle to kill Huawei’s mobile phone division and fatally cripple its network equipment business. Banning Huawei from using Google services had not done as much damage as the administration had hoped, as Huawei used its scale to develop its own app store and mapping solutions to run on its open source version of Android. But, on 14 September, Huawei lost access to chips with any US content. Although Huawei had stockpiled two years’ worth of chips ahead of the ban, this ticking time bomb seemed likely to become a self-fulfilling prophesy, as Huawei’s customers deserted it, like rats from a sinking ship, long before its supplies of silicon ran dry. Indeed, before the ban even came into effect, the UK reversed its decision to allow Huawei to supply equipment for the country’s 5G network, citing the increased security risks of Huawei being forced to source chips for its network gear from third parties.
Against this backdrop, Huawei’s September developer conference was a strange affair. Huawei had consciously modelled itself on Apple, even copying the bad parts, and that inspiration was clear in the glitz of the event. Huawei pitched developers to supply its app store, but they were loath to commit when it wasn’t clear how much longer Huawei would be in the mobile phone business. Prior to the ban on US silicon tech, Huawei could make a credible argument that committing to its app store would give developers access to mainland China as well as a foot in a new, alternative Android open-source ecosystem that Huawei was developing globally. But, without silicon, Huawei would not even be able to make phones for the Chinese market, let alone penetrate the rest of the world. To confuse matters more, Huawei announced that, within two years, its mobile phones would move to Huawei’s homegrown Harmony OS, to which developers would need to port their Android apps. Harmony had originally been developed for wearables, not phones, and how would Huawei make Harmony a success when, by the time of its mobile phone launch, the company would have exhausted its stockpile of silicon?
2021: Huawei trudges on under the burden of sanctions
Matters got worse for Huawei in 2021, when Donald Trump was sworn in for a second term. Huawei’s executives had hoped that a Biden victory would lead to a reversal of the silicon ban, allowing Taiwanese fabs to begin making Huawei’s ARM-based Kirin system-on-a-chip again. But Huawei had no such luck. Instead, it hived off its chip design arm, HiSilicon, which was already recognised as China’s top semiconductor player, in effort to insulate HiSilicon from further US sanctions. Although HiSilicon began offering its chips to other players, the Trump administration still extended the US chip tech ban to HiSilicon. The US also ratcheted up its war on Chinese Tech by withholding visas for Chinese engineers and developers to work in the US and putting pressure on US companies, most notably Zoom, to cut their ties with China. With the second Trump administration’s nativism, 2021 was not a nice time to be an immigrant in the US, and some tech workers decided to return home, whether to India, China or elsewhere. Huawei trundled on like an ox: losing market share, depleting its stock of chips and working to get Harmony ready for prime time.
2022: Huawei and HiSilicon make their move
2022 was the year Huawei, and Chinese tech more generally, pounced. The danger of using a weapon is that once you show your adversary their vulnerability, you cannot expect them not to seek to address it. 2022 began as 2021 ended, with Huawei and HiSilicon trundling on, trying to make their businesses work under the weight of US sanctions. Or, at least that’s how it appeared to observers in Washington. In reality, in 2021, the Chinese state had decided that breaking the US’s hold on Huawei was not only a key pillar of Made in China 2025, but also a strategic imperative. With Huawei’s business in decline and HiSilicon under sanctions, China’s remaining mobile champions, Xiaomi and Oppo, were reliant on Qualcomm for chips. If the US was afraid that Huawei was a backdoor for Chinese spooks, why shouldn’t China worry that Qualcomm gave a similar advantage to the US? China was going to make HiSilicon work.
Trump’s nativism and Brexit-related economic decline in the UK, which remained ARM’s headquarters after its sale to Nvidia in 2020 (which had been excoriated at the time by Chinese state media for giving the US control over the main global mobile chip architecture), made roles in China newly attractive to Chinese engineers living abroad. With state support, Huawei and HiSilicon had been building up their technical capability and, in September 2022, the world saw what they had been working on. In a joint event, HiSilicon announced its Kirin 1000 chip, and Huawei unveiled Harmony 3.0, the software it would run. Like its predecessors, the Kirin 1000 would run the ARM instruction set, but HiSilicon had now designed its own cores and would no longer license ARM’s Cortex microarchitecture. HiSilicon had now reached a level of control of its silicon that only Apple had previously achieved among mobile phone manufacturers.
Whereas previous Kirin chips were manufactured in Taiwanese fabs, the Kirin 1000 would be made in China, by SMIC, China’s largest chip foundry. SMIC had narrowly avoided US sanctions in 2020 after US manufacturers of semiconductor production equipment lobbied the Trump administration not to kill their Chinese business. SMIC knew that manufacturing the Kirin 1000 would bring US sanctions crashing down on it, but it felt ready (not that the Chinese government gave it a choice). Although unproven, the US government alleged that SMIC benefited from state espionage to help build its industrial base. The Kirin 1000 was not the world’s fastest chip, nor its most power efficient, but it worked well and, by doing so, it showed that China could break the US’s silicon stranglehold.
HarmonyOS was more of a disappointment. It felt clunky, and app availability was limited. It could run Android apps, but that was buggy, leading to an embarrassing stutter during the on-stage demo. While foreign observers were generally impressed with HiSilicon’s performance, most felt that Huawei’s side of the launch had disappointed. They expected Harmony to follow the ignominious trajectories of Windows Mobile, Blackberry OS, Samsung’s Tizen and Nokia’s Symbian. If the Kirin 1000 was going to find customers, they thought, it was going to have to run Android.
2023: Harmony gains traction in China
If you have a choice between betting on the world’s largest economy or a bunch of tech prognosticators, bet on the former. HarmonyOS confounded expectations in 2023. Other Chinese mobile phone manufacturers succumbed to government pressure and started to adopt HarmonyOS. Under the guise of ensuring competition, Chinese regulators required that apps released in China for Android also be released for Harmony. To soften the blow of the regulatory stick, the Chinese government offered grants and loans to developers globally to develop natively for Harmony alongside Android. With the world still recovering from Covid-19, uptake outside of the US was strong. Harmony developed momentum as usage in China grew and apps multiplied like rabbits, filling the previously barren shelves of the Harmony app stores. Huawei opened a major design centre in Sao Paolo to complement its headquarters in Shenzhen and existing design centre in Paris. With a major push to refine its design language, HarmonyOS began to take on its own distinct shape. By the end of 2023, the HarmonyOS running on Kirin silicon was shaping up to be a viable third mobile ecosystem to compete with Android and Apple.
2024: Harmony makes the move into emerging markets
It was clear to Huawei, HiSilicon and the Chinese government that for the Harmony/Kirin ecosystem to spread its wings, it would need customers outside of China. Realistically, it was going to be very difficult to displace Google services with existing smartphone users, so Huawei chose another strategy. In January 2024, Huawei signed a memorandum of understanding (MoU) with Transsion, a smaller Chinese phone manufacturer, whose entry-level smartphone and feature phone brands together account for the majority of mobile phone sales in Africa and entry-level mobile phone sales in India. Under the terms of the MoU, Transsion would offer cut-price Harmony phones, supported by Chinese government export promotion grants, in its core markets in Africa and South Asia. Rather than go head-to-head with Android, these devices, under the basic itel brand, were intended to displace feature phones.
Governments and regulators welcomed Transsion’s promotion of Harmony devices. HarmonyOS had a closed architecture, inspired by iOS, so was much more secure against the Android malware problems that have plagued emerging markets. Although unsubstantiated, US officials alleged that authoritarian governments aligned to China also welcomed HarmonyOS when Chinese authorities shared access to back doors to allow them to easily spy on Harmony users.
Huawei positioned itself as a premium brand for the emerging market elite, with a new line of HarmonyOS phones based on the updated Kirin 1008 processor. Although Transsion led with entry-level phones, its dominant position and government support allowed it to offer Harmony devices with much higher specs than other mid-tier phones under its Tecno and Infinix brands.
2025: Harmony is an established new mobile ecosystem
In January 2025, after eight years of Donald Trump in the White House, a Democrat was sworn in as President of the United States. The new president began to seek to mend relations with China, lifting the semiconductor technology restrictions in return for HiSilicon and SMIC paying retrospective license fees and penalties for the US and UK technology they had utilised in the preceding four years. But the snake was out of the bag, and the Harmony ecosystem was now well-established. With US sanctions lifted, Harmony devices pushed into the low-end of the European market. Not wanting to lose users who switched to Harmony, and fearful of the competition inquiry that might follow if it prevented users of Android’s new competitor from accessing other Google services, Google began to offer Harmony apps for some its most popular services. Trump had seemingly won the battle in 2020 but, looking back, he not only lost the war, but he also lost a potentially powerful strategic asset – dominance of global tech. We’ll never know if widespread use of Android and Qualcomm chips in China conferred any strategic benefit to the US but, today in 2025, widespread use of Harmony and Kirin certainly does not.
This story is not a prediction about how the tech wars will end, but rather a way of exploring one plausible future scenario for one part of that war. Other plausible futures also exist: Huawei’s mobile business could wither and die, as the Trump administration clearly intends. President Biden could ratchet down tensions next year, restoring China’s reliance on US silicon tech. 2022, the Year of the Tiger in the Chinese Zodiac, in which Huawei and HiSilicon pounce, could turn into a year of the rooster, as China crows about its aspirations for independent silicon, but fails to make it work.
Nevertheless, this story is plausible, and we are already seeing leading indicators of the trends that make it possible. In a recent user poll by the website Android Authority, more than 40% of users indicated that they would definitely upgrade their Android-based Huawei phone to Harmony, with a similar number indicating that they were open to the idea, depending on what features Harmony offered. Meanwhile, the CEO of German chipmaker Infineon has recently explained that he expects current tensions between the US and China to lead to greater competition, with silicon coming from China.
Figure 2: >80% of users are already open to upgrading their Android-based Huawei phones to Harmony
Lessons for investors
There are at least three lessons for investors, corporate leaders and policymakers in this story. First, if the tech war is going to be a war, think about it that way—early successes don’t lead mechanically to victory, nor do early reversals automatically lead to defeat. Second, most wars drive the combatants apart. However the tech war ends, it is likely to bifurcate tech if it doesn’t end quickly. This is just one way that bifurcation could unfold. Finally, analysts, whether they are sitting in asset managers, corporate strategy departments or intelligence agencies, need to assess the signposts of each of these scenarios to get ahead of the curve by using plausible futures as a way of understanding the longer-term significance of the news as it unfolds.
It will be a wild and dangerous ride, so it’s best to be prepared and keep alert, just like riding a bike down Kilimanjaro.
 Yes, I know, it’s meant to be a cat in the bag, but 2025 is the Year of the Snake in the Chinese Zodiac.
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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a res...