War for technological supremacy

The technological dispute between the US and China is more than the tariff war -- both want global dominance in future technologies

War for technological supremacy

The history of the evolution of mobile wireless communication system is about four decades old. This journey starts back in the early 1980s when Martin Cooper, a senior engineer at Motorola launched the first ever handled mobile phone which makes possible the first public phone call in 1985 in the UK. The history of mobile wireless technology evolves quickly from 1G to 5G also known as fifth generation wireless.

Connectivity is one of the essential elements of modernity. To stay competitive in the world’s economy, one must be adopting the latest technology over time. Technological development plays a crucial role in improving people’s life and to get pace with the evolution in the world’s economy because it is the technology that keeps us updated with the latest happenings globally. In this age of connectivity, it is the mobile technology that guides and enriches our communities around the world on a macroeconomic level.

According to Boston Consulting Group, in technology-rich countries such as Brazil, China, Germany, India, South Korea, and the United States, the annual value of the mobile gross domestic product (mGDP) is over $1.2 trillion. Only in the US the mGDP in absolute is $548 billion (3.2 percent of GDP), surpasses the auto-industry in contribution to the US economy. The consumers in emerging economies such as China and India derived more than 40 percent of their annual income from mobile technology.

The latest 5G technology is 100 times faster than 4G and one can download high definition videos in seconds. 5G consumes much less power than 4G and reduces carbon emissions, provides medical assistance like real-time control for remote surgery, monitor air quality in cities and much more.

5G will make possible the invention of thousands of new products, services, technologies along with the emergence of new industries in the long-term. 5G would be able to connect individuals or devices such as vehicles, buildings, ships, meters, a machine with electronics, sensors, software as well as with Cloud through the Internet of Things (IoT) by combining mobile communications. Exchange of information via machines and integration of the computer-based system with the physical world would also be made possible through embedded 5G technology. On April 3, 2019, South Korea became the world’s first country to launch this amazing technology nationwide.

President Donald Trump, recently, with his executive orders banned Huawei’s and ZTE Telecom equipment from the US, placing Huawei on the Commerce department so-called Entity List which means Huawei cannot trade with US companies without obtaining government approval. Huawei technologies will immediately lose access to update the Android operating system and the next version of its smartphones outside of China and will also lose access to popular applications and services including the Google play store and Gmail app. Hikvision, the largest manufacturer of video surveillance equipment, would be the next to be blacklisted. It is in charge of using artificial intelligence to track and control Uyghurs in Xinjiang Autonomous Region of the People’s Republic of China.

With the emergence of 4G/5G technology, China is emerging as strong economy and it has already started a cold war between China and US. Big data is considered as the new oil of the digital era, whereas 5G is the next set of pipes that can deliver it. China is all determined and wants to be the world leader in 5G wireless technologies in the near future.

The Trump administration doesn’t want the US and his allies Australia, New Zealand, Canada, and the United Kingdom to accept 5G services from Chinese telecommunications companies. It is also considered that Huawei is posing a new competitive challenge to Western telecommunications firms along with the ability of Beijing’s to achieve geopolitical supremacy via using Huawei technology.

Is Huawei going to beat Samsung too? Huawei has sold a whopping 59.1 million phones in Q1 2019, up 50 percent from the 39.3 million smartphones the company shipped last year. Huawei has now beaten Apple to become the world’s second-largest smartphone brand. In the first quarter of 2019, the counterpoint research report shows that Samsung and Apple have been losing ground in the smartphone world in Q1 2019. Samsung saw an 8.1 percent drop in smartphones shipments globally. Samsung shipped a total of 72 million smartphones in Q1 2019. It has also shipped 78.2 million units in the same quarter last year, whereas Apple only shipped 42 million smartphone units in Q1 2019, which is 20 percent less from the 52.2 million units shipped in Q1 2018.

In this cold-tech war, the US may lose the chips and components licensing revenue worth $10 billion annually. On the contrary, Huawei is not fully prepared to obtain the remaining half of the chips and other components from elsewhere nor can it produce it at home. China’s coastal cities may suffer from huge job losses due to interruption of technology goods, as the stockpile with Huawei is only 80 days.

How successful will be the Trump administration move to isolate Huawei from the rest of the world and slowdown of China’s long-term development in the tech industry? Next few years will be very important to watch where this cold economic war will take US and China. According to Huawei founder China is already making half of the chips and other capabilities that are used in Huawei. For the remaining half, Huawei is dependent on the US technologies but determined to be self-sufficient soon, as China dreamed of technological independence by 2025.

The dispute between the US and China is more than the tariff war. Both the countries want global dominance in future technologies such as robotics, 5G high-speed mobile phone, artificial intelligence and networks. Time will further reveal which of the two economic superpowers will have technological control in the coming decades.

According to the Wall Street Journal, China is the leader in 5G patent race owning 36 percent of all 5G standard-essential patents as of February 26, 2019. China is the leading technical contributor (11423) to 5G technology and top attender of 5G meetings while Qualcomm is on number five (4493) both in technical contribution to 5G technology and attender in 5G meetings. It seems that the US response is slow in becoming the world leader in 5G technologies.

War for technological supremacy