Huawei losing ARM could ruin its plans to become top phone maker in the world

Huawei can't seem to catch a break.

Following Google's recent Android ban and Qualcomm and Intel cutting ties with the Chinese company, more popular tech giants are following suit. Now, UK-based chip designer ARM has also suspended business with Huawei.

Simply put: This is yet another major blow to Huawei that could really hamper the company's ability to produce future smartphones.

Here's what we know from earlier this week: Without a proper Android license, Huawei won't be able to release new phones with the Google Play Store and Google services outside of China.

This would essentially make new Huawei phones useless in pretty much all of the Western world, where Google's app store and its services are all but impossible to replace on Android.

The only competitive alternative for consumers would be to use an Android phone made by a different company (i.e. Samsung or OnePlus) that's not affected by the U.S. trade ban or jump ship to the iPhone.

It's worth noting that the Trump administration has eased its ban on Huawei with a 90-day exemption period where the Chinese company can still continue to send software updates to existing device users, but it's only temporary relief.

Long-term, unless the U.S. and China patch things up, Huawei might have to switch to its own operating system if it's no longer allowed to use Android. However, the challenge of that would be convincing developers to port their apps over to a new OS.

Switching software away from Android is one thing and it wouldn't be something that happens overnight, but ARM suspending business with Huawei is arguably a more serious problem for its smartphone business.

Without ARM, Huawei's own Kirin mobile chips, which are based on the UK chip company's designs, would effectively be stalled. As the BBC notes, even though Huawei's mobile chips are produced in China, the underlying technology is "created by ARM."

"ARM is complying with all of the latest restrictions set forth by the U.S. government," an ARM spokesperson said in email. "No further comment at this time."

The unfortunate reality is that almost all mobile processors are based on ARM's chip technologies, even Apple's custom A-series chips found in its iOS devices.

Even if Huawei manages to switch from U.S. component suppliers to, say, Asian ones for parts like the Corning Gorilla Glass or cellular modems, it's practically impossible to build a competitive smartphone without a chip that uses ARM tech. Without a chip or "brain," there is no phone and without new phones, Huawei's dreams to overtake Samsung as the world's largest smartphone maker would be dashed, not to mention take a huge chunk out of its revenue.

There are a few ways Huawei could get out of this mess: 1) the U.S. and China come to a trade agreement and everything goes back to normal and the Chinese company's partners start working with it again 2) Huawei switches all of its component suppliers to non-U.S. ones or 3) Huawei becomes entirely independent and designs and manufactures all of its technologies on its own. The latter would be the most difficult and take years to accomplish and who knows if the effort would be worth it.

If something doesn't happen soon, the company's phone business could be set back for years.

UPDATE: May 22, 2019, 4:48 p.m. EDT Added statement from ARM.