Huawei Google Assistant FI

Huawei Smart Speaker with Google Assistant Stalled Due to U.S. Tech Export Restrictions Levied by President

President Donald Trump’s executive order on U.S. technology exports in May didn’t mention Huawei, but it was clear to all observers that the Chinese telecom giant was the primary target. Most of the news coverage centered on Huawei’s 5G telecom equipment product line and long-standing concerns among U.S. security personnel about its potential use for espionage by the Chinese government. A few people noted that Huawei grew into the world’s second-largest smartphone maker on the back of Android, the mobile operating system owned by Google. Removing Android access could be catastophic for that product line going forward. However, there was another project that was also immediately sidelined by the presidential executive order. Huawei was developing a new Google Assistant-enabled smart speaker according to anonymous sources cited by The Information (N.B. paywall).

We worked on this project with Google for a year and made a lot of progress. Then everything suddenly stopped.

The source told The Information’s Juro Osawa that Huawei planned to unveil the new smart speaker at the IFA electronics industry trade show in Berlin in September of this year. It was intended for sale outside of China including to U.S. consumers. Efforts on the new smart speaker ended in May over uncertainty about the executive order. Since that time, all discussions have been attended by lawyers to ensure Google doesn’t run afoul of the executive order. The Information reports that the Huawei employee that served as its source declined to be named but commented, that, “We worked on this project with Google for a year and made a lot of progress. Then everything suddenly stopped.”

Not Huawei’s First Smart Speaker

Huawei debuted a smart speaker with Amazon’s Alexa voice assistant called AI Cube at the IFA trade show in September 2018. The Information’s sources within Huawei say that effort “has been a flop.” That device has attempted to compete in the smart speaker segment by including additional features uncommon in the devices such as a built-in Wi-Fi router and 4G Modem. Notably, the executive order is not retroactive, so Huawei can continue selling its Alexa-enabled device and likely working with that technology provided no new technology content is added.

The company has also worked closely with Amazon to add Alexa to smartphones debuting its first model within Note 9 in January 2017. However, the reliance on Android OS for Huawei smartphones ties the company much more closely to Google and the combination of Google Assistant on Huawei smartphones along with a similarly outfitted smart speaker could provide more value to its users.

In addition, Huawei launched its own smart speaker for the China market in October 2018 called the Huawei AI Speaker. It looks strikingly similar to the Apple HomePod but has a list price of only about $60 and includes Huawei’s own voice assistant Xiaoyi. Only Apple and Huawei are currently selling smart speakers localized for both China and western markets such as Europe.

Other Chinese Manufacturers Target China

Chinese smart speaker makers have thus far focused primarily on competing in the domestic market. Alibaba, Baidu, and Xiaomi currently dominate China’s smart speaker sales. While Alibaba and Baidu have different business models than Huawei, Xiaomi is also a device maker with a focus on smartphones and smart IoT devices. Xiaomi also has its own voice assistant but also has one product for sale in China, the $30 Yeelight smart speaker, which uses Microsoft’s Cortana as its onboard assistant. Updates to that product may also run into restrictions posed by the executive order if updates are planned.

However, Xiaomi has robust smart speaker sales today in China largely using its own assistant. Research firm Canalys estimates Xiaomi’s installed base market share will settle at 25% in 2019 with Alibaba and Baidu taking 39% and 24% respectively. That will leave Huawei fighting for its share of the 12% “Other” category where it is up against, Apple, and other recent entrants into the segment. The company’s strong position in global smartphone sales would seem to offer it an advantage in selling smart speakers outside of China. Huawei announced Q2 2019 smartphone sales today and Canalys estimates unit sales rose 31% over 2018 while the company’s market share in China increased to 38%. However, the new restrictions on collaboration with Google are likely to undermine its global smart speaker effort for now.

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