[The reality is anyone can get an open source version of Android and put it on a device. The problem is it won’t be perfectly compatible with all the apps, may not work with all devices or bluetooth, etc. With open source, no profit incentive, so no incentive for long term development.]
No they won’t. I don’t know enough about Chinese culture and the nationalistic tendencies of the people. I did read recently that there is a coordinated anti-US PR campaign going on. So I expect some increase in nationalistic fervor. But overall I suspect that at least among Chinese who live in cities (e.g. the chinese middle class) they are like anyone else and have some affinity for American products and American brands.
What I am driving at is, suppose Hauwei does get boxed out. They will have no choice but to create their own OS. And the PRC will very likely support it, probably making it the mandatory OS for government use. And due to the variety of factors it would gain some traction in China.
I don’t expect, and don’t suspect they expect, to compete worldwide with Google on their OS. They would at first simply try to stop hemorrhaging. They can deliver a lower cost phone to a large number of people (they probably already do). They can make money locally. They can sell ads to anyone.
Longer term if this drags out, they could shift gears. They would have to decouple the OS to succeed but in theory they could compete worldwide over time. I don’t think they will get anywhere in the short term, and not far until they can convince non-Chinese users that the device isn’t just one giant piece of espionage for the PRC government (and note AAPL tries hard to present itself as pro-privacy). But if they were content with a shot at say 10% of something huge vs 100% of something modest and forced by sanctions, they could spin off their OS to third party developers to take a run at the duopoly of Android and iOS. Or, spin off a non-China version of it.
Someone is going to do it. Microsoft and possibly Facebook both could give it a shot. FB doesn’t seem likely and MSFT has been trying for ages. There are other tech firms with the resources. AMZN is crazy enough to try it but I don’t think they would succeed - I thought they were nuts to get into hardware, but it seems to be working a little bit for them. They subsidize everything they do. They sell goods at a loss, they “sell” movies via Prime at a loss. They have free cash flow from their services and lots of shareholder money to burn. But since you mentioned it, little by little, FB and AMZN are both nibbling away at GOOG’s revenues/profits. Sellers are pushing more money onto the Amazon.com website sponsored searches and ads, while FB has its many platforms which are all circulating more ads than ever and plans for more. Both drawing dollars from GOOG. My point here simply that there may be a little blood in the water already and now there is at least one desperate shark with the potential to be disruptive.
I sorta wish - and think it will happen - because as I said 10% of something massive is still something pretty damn big - that another option will come to the market. Not just for OS’ but across the board. Peter Theil’s Block.one is still kind of amorphous, based on blockchain but I think that is just buzz marketing/financing for a plan to develop variety of “Web 3.0” enterprises. I am certain they are going to try to take on Google, Facebook, Twitter and the Mainstream Media. Combined that’s $100 billion in industry and there is plenty of profit motive for someone to try to slice off 5% or 10% by willingness to make less money - because it’s still a lot of money! And with the censorship of social media and bias of MSM there is a political will in the air for it.I don’t want to speculate too much more than that but the technology exists now to disintermediate these massive companies. Going off topic here but example Uber/Lyft are taking some 35% of rideshare income - but the transaction cost between drivers and the company is a fraction of that, and could be lower still, while the back office support is bloated. Rideshare is just one step in a direction that imo will result in the demise of those who fostered its growth since technically speaking the drivers don’t really need such an expensive middle man. They will disintermediate themselves, “unionize” themselves if you will and jump to support a driver-centric platform. Facebook is working on blockchain supposedly going to “pay users” a portion of the revenue they generate and in the meantime create a currency to displace credit cards. News companies make money on ads seen by users, users will gravitate to news platforms that pay them to read. Writers are already being outsourced by the newsrooms and forced onto platforms that pay them based on readership. You can see where this is going.