On February 24, Honor V30, the first model equipped with Huawei HMS service, will be officially released. The computer team of Essence Securities believes that this is not only a milestone in Huawei's development history but also a historic turning point for the China-made software industry.
They believe that HMS service (Huawei Mobile Services) is the last puzzle of Huawei's mobile terminal, which is expected to drive the development of China-made software companies in the ecosystem and go global.
On January 16, 2020, Huawei officially released HMS Core 4.0, which is another force for Huawei in mobile terminals, which complemented its shortcomings on the software side.
Huawei HMS service is a product of Google's GMS service.
Android is essentially composed of the AOSP project and GMS service. Among them, AOSP is open source and free software ontology, and GMS is Google's commercial service.
Google GMS services can be broken down into functions and supporting applications. Among them, the function refers to the two major services of synchronization and push for mobile terminal supporting, and the supporting application refers to the accompanying Google Family App software.
The GMS service is of great significance to Google, which can help it promote products, strengthen supervision, and generate OEM fees.
At the same time, GMS services have formed strong user stickiness among software and hardware vendors and are therefore difficult to replace.
HMS Core is a collection of terminal and cloud open capabilities provided by Huawei Mobile Services. The HMS service has been iterated to the HMS Core 4.0 version, which has achieved a significant increase in the size of users, developers, and the number of apps.
Huawei's HMS service is heavily invested in building an ecosystem with a wide range of service types that basically cover GMS functions.
Huawei has certain strategic advantages and technical reserves in the terminal market share, cloud services, and AI fields, and can support the promotion of HMS services.
The computer team of Essence Securities believes that the emerging business layout of HMS services has already begun, and the future development prospects are promising.
Huawei HMS application development contest opens with $1 million in prizes
How does the launch of Huawei's HMS service affect the market? Essence Securities computer team explained:
1. As of January 2020, HMS core has 400 million monthly active user users, which is expected to bring 400 million incremental monthly active user users directly to HMS software service providers;
2. Huawei's HMS covers more than 170 countries and regions around the world, which will effectively drive HMS ecosystem companies from China to the world, from serving 1.3 billion users in China to 3.3 billion mobile Internet users worldwide;
3. Google GMS is the core business carrier of the Android ecosystem. Its 18-year revenue from Google Store has reached 24.8 billion U.S. dollars, and Apple Store revenue has reached 46.6 billion U.S. dollars. With the vigorous promotion of HMS globally, Huawei stores have more than 10 times the growth space, and companies within the HMS ecosystem will benefit significantly.
Essence Securities believes that the launch of Huawei's HMS service is expected to further improve Huawei's mobile terminal product system, thereby having more powerful capabilities to challenge Google's Android ecosystem.
Compared with the tens of billions of dollars in revenue of giant mobile operating systems such as Google and Apple, Huawei's HMS service has more than 10 times space.
The Huawei incident last year was a major turning point for the Chinese semiconductor industry. We believe that Huawei HMS will become a historic turning point for China-made software companies to go global, which is of great significance!
The following is the full text of the Essence Securities report, translated by cnTechPost:
1. HMS service: The last puzzle of Huawei's mobile ecosystem
On January 16, 2020, Huawei WeChat public account officially released HMS Core 4.0 to the world.
Huawei HMS 4.0 service further expands Huawei account, payment, cloud space, advertising, positioning and other services based on the original products, and introduces AI-related machine learning services and situational awareness services.
HMS 4.0 is another strength of Huawei's mobile terminal after Kirin chip and Harmony OS, which complements Huawei's shortboard on the software side.
On February 24, HonorV30, the first model equipped with Huawei HMS service, will be officially released. This is not only a landmark event for Huawei but also a historic turning point for China-made software. It is expected to drive the development of China-made software to go global.
Huawei HMS service is a product to replace Google's GMS service.
Huawei HMS service is a software service product attached to Huawei's mobile phone hardware terminal and operating system. Its main reference object is Google's extended GMS service on the Android operating system.
By creating HMS services, Huawei is expected to open up emerging markets in the fields of stores, maps, and videos by analogy with Google's family buckets. It will also help various China-made software partners to open emerging overseas markets and accelerate the process of China-made software going overseas.
2. Google GMS service in-depth analysis
2.1. Android: Sugar-coated shells wrapped in an "open source free" shell
2.1.1. What exactly is Android?
A popular mobile operating system product with huge installed capacity worldwide.
Android is Google's well-known mobile operating system project for mobile phones. It is deeply integrated with Google's various services and always adheres to the open-source strategy.
Google has always adhered to the position of third-party software vendors in the Android project and has an open attitude with external cooperation. Therefore, Google is widely welcomed by mobile terminal hardware manufacturers such as mobile phones and tablets.
Huawei HMS can be deployed on older models and coexist with Google GMS
According to Google's official website data, there are currently more than 24,000 mobile phones and tablet products from 1,300 manufacturers equipped with the Android operating system, including Huawei, Samsung, Sony and other well-known manufacturers.
Since Google open-sourced the Android project in 2007 and started external cooperation, the installed capacity of the mobile operating system of the Android operating system has continued to rise, surpassing the traditional mobile phone giant Nokia's Symbian operating system in 2010, and even surpassing Microsoft Windows in 2017 to become the world's number one. Big operating system.
At present, the market generally believes that the Android operating system is an open-source product, completely free and open to hardware manufacturers.
But in fact, we had a report on Open Source, Free Lunch? In the "In-depth Analysis", the purpose of the technology giant's release of open source projects is by no means public welfare charity, but to promote the promotion of commercial service products through free open source software ontology.
In fact, according to the available information, the Android operating system is a model of promotion based on the above model, which essentially consists of two parts, the free AOSP project and the commercialized GMS service.
2.1.2. AOSP: Open-source free mobile operating system ontology
AOSP is Android recognized by most people, and it is also the software entity part of the product.
AOSP stands for Android Open Source Project, which is the software body of Google's Android operating system. It is freely distributed to the outside world in an open-source manner.
Android "slimming" pure version, open-source free distribution.
AOSP is a pure version of Google Android that does not include various implanted services.
The project was first acquired by Google in 2005 for more than $50 million, and in 2007 it was released to the public under the Apache agreement for free through open source.
At the same time, Google also established an Open Handset Alliance with 84 hardware manufacturers, software developers, and telecommunications operators, including HTC, Qualcomm, etc., to jointly develop and improve the project.
For the purpose of continuous development, the project established the open-source code project AOSP.
Based on Linux kernel development, the architecture is highly scalable.
The AOSP operating system is developed based on the Linux kernel, and the software body is written in the Java language.
At the same time, in order to achieve faster App startup speed and higher running performance, some code is developed and compiled by C ++.
AOSP uses a three-layer design of the kernel, the runtime, and the upper-layer framework, which is highly scalable and easy to customize and expand.
Cooperating with many hardware manufacturers, it is a prototype product of the operating system of Chinese mobile phone manufacturers.
The Android project was strongly open when it was proposed. Google's Open Handheld Device Alliance, which was established in 2007, includes HTC, Motorola, Samsung mobile phone giants, wireless operators such as Sprint and T-Mobile, and chip vendors such as Qualcomm and Texas Instruments. In 2008, Huawei also joined the alliance.
Subject to the restrictions of Google services, the operating systems of Chinese mobile phone manufacturers are essentially variants of the AOSP project, including Xiaomi MIUI and Huawei EMUI.
2.1.3. GMS: Google's Commercial Services for Revenue
GMS is a service that Google attaches to the Android operating system, which is called Google Mobile Services.
GMS is essentially a collection of Google-related applications and platform APIs.
At present, GMS has been fully integrated into the user side and the manufacturer side.
On the user side, search, map, and other services under GMS have formed strong user stickiness;
On the manufacturer side, a large number of GMS APIs have been integrated into the development of App applications.
GMS services need to be authorized to be carried on mobile terminal products.
The original intention of the GMS service is to emulate the ANPS of iOS to strengthen supervision and end the chaos of customization of the Android operating system. Therefore, it is not essentially a voluntary freely carried service.
If any mobile terminal manufacturer intends to carry GMS services through legal channels, it must pass a series of Google company tests to obtain the GMS service authorization process.
The GMS service authorization process includes the following main parts:
(1) CTS test: Compatibility test, the full name is Compatibility TestSuite.
The CTS test mainly tests the compatibility of Google's Android API with the hardware platform. It will conduct more than 300,000-unit tests, including signature tests, Dalvik tests, platform license tests, and so on.
(2) GTS test: Google's special test, full name is GMS Test Suite.
The GTS test is a compatibility test of the mobile terminal products of designated vendors and Google's GMS services and related applications, so as to ensure that Google's stores, maps, and other apps can run.
At the same time, GTS testing also tests the security of the platform and the security of user data.
(3) VTS test: Vendor test, full name is Vendor Test Suite.
The VTS test is usually completed by the GSI system. The GSI system is a system for image adjustment for Android. It usually needs to complete a series of VTS special tests and CTS-on-GSI tests, which can be considered as an extension of the GTS test.
(4) CTS verifier test: a supplementary test of the CTS test.
The CTS verifier test is mainly aimed at APIs and functions that cannot be tested on a static device using an automatic test system, such as cameras, volume, acceleration sensors, etc.
The CTS verifier test collects results mainly through manual testing.
The development trend of the Android operating system is to transfer more modules to GMS services.
For the purpose of tightening control and enhancing App security, Google is transferring more and more functional APIs from AOSP to GMS.
At present, the well-known foreign social chat software skype relies on GMS services, some travel software cannot be located without Google Maps, and some foreign games cannot even be archived without GMS services.
2.2. Google GMS Services Full Perspective
We believe that Google GMS services can be divided into two levels of function and supporting applications.
Among them, the function refers to the synchronization and push of two services that the GMS service provides for the mobile terminal. It is necessary for the mobile terminal.
Supporting applications refer to the Google Apps included with the GMS service, including Google Search, Google Map, Google Drive, Gmail, Google Play, YouTube, Google Photos, and Google Duo.
2.2.1. Google GMS service core functions: synchronization and push
As a service for mobile terminals, GMS has two core functions, namely synchronization, and push:
Synchronization: GMS service enables users to synchronize user data between mobile phones, wearable devices, and PCs.
For example, users' search history on the search engine, map search history, and user's related settings for Google Chrome can all realize real-time synchronization updates between devices equipped with GMS services.
Push: The GMS service push function enables real-time pop-up alerts of users' installed apps.
The push function of the GMS service is essentially different from the push function provided by Chinese App software developers.
Huawei says its HMS has 1.4 million registered developers worldwide
The pushes implemented by Chinese App software developers come from the App's own functions, which need to continuously load applications in the system background, thus affecting the performance and battery life of the phone.
In contrast, the push function of the GMS service is implemented at the Android operating system level, avoiding the above problems.
Synchronization and push are the most important functions of mobile terminal services, and both are highly dependent on cloud computing.
Synchronization and push are one of the main characteristics of Android that is different from AOSP open source projects, that is, the "App-operating system", "App-device", and "device-device" are linked through services.
Among them, the realization of synchronization is essentially achieved by user settings and browsing data using a cloud server as an intermediary and uploading and downloading between different devices.
The implementation of push is essentially an application vendor submits a push information application to the GMS cloud server, and the cloud server sends information to each mobile phone user.
The realization of the two functions of synchronization and push need to rely on the cloud platform. A cloud platform that can accommodate all users is a must for mobile terminal services.
2.2.2. Google Play
For the Apple App Store, Google Play is Google's Android app store.
Google Play is a software application store for the Android operating system and one of the core bearers of Google's GMS service management functions.
Google Play was formerly known as Android Market, a digital application publishing platform, and digital media store developed by Google for Android.
Similar to the Apple App Store, software developers can publish self-developed App applications through Google Play, and users can purchase them for free or paid through Google Play.
Google Play can manage the functions of installation and uninstallation for users, avoiding the security risks caused by self-installation from unknown sources.
The number of released apps continued to grow, and alternative value-added services were launched in due course.
Affected by the Android business model, more apps are distributed free of charge.
According to Statista, the total number of apps on Google Play in 2018 exceeded 3 million, of which free apps accounted for 94.24%.
At the same time, in addition to helping GMS land as a management tool, Google Play is also actively expanding monetization channels, including the expansion of electronic malls in the fields of books and music.
On September 23, 2019, Google Play Pass was launched in the United States. The subscription service allows users to play designated paid games and apps for $4.99 per month.
2.2.3. Google Maps
The electronic map service provided by Google to the world was first released on February 8, 2005
. The map contains information such as landmarks, lines, shapes, and provides three views such as vector maps, satellite photos, and topographic maps.
Based on Google Maps, Google has further expanded Google Earth, Google Moon, Google Mars, etc.
It has a wide range of application scenarios and great potential for realization.
With the popularization of high-speed networks in the 4G era, the navigation function of the map service has been more widely used, and it has become a tool for diverting various types of catering and travel.
Google Map was adjusted in 2018, announced the establishment of a new platform, and adjusted the model and price of map interface services. The price of some services increased by 14 times.
Morgan Stanley has conducted related calculations and believes that Google Maps' revenue contribution in 2019 will reach 2.95 billion US dollars, and it is expected to reach 11 billion US dollars in 2023, with a compound growth rate of nearly 40%.
2.2.4. YouTube
This is the world's largest video sharing platform.
YouTube is a video-sharing website owned by Google, and is also the world's largest video search and sharing platform, allowing users to upload, watch, share, and comment on videos.
YouTube was registered on February 14, 2005, and was founded by Chen Shijun, Chad Holly, Judd Kalim, and others.
In November 2006, Google acquired YouTube for $1.65 billion and operated it as a subsidiary.
Most YouTube uploaders are individuals, but there are also partners such as CBS and BBC uploading their own videos on the platform.
MAU reached 2 billion in 2019, contributing over 10 billion US dollars in advertising revenue to Google.
According to Statista statistics, YouTube has reached 2 billion monthly active user users in 2019.
According to Google's annual report, YouTube had 1.5 billion users in 2015.
In the 2019 annual report, Google first disclosed the advertising revenue brought by YouTube. Its performance in 2017-2019 was 81.5/1.6/15.15 billion US dollars, accounting for about 10% of Google's overall advertising business revenue.
Subscription services have become the second-largest source of revenue, and the realization potential of the social sector is huge.
In order to expand the revenue source of YouTube business, Google gradually launched paid subscription services such as YouTube TV.
According to Omnicore, YouTube TV has 300,000 subscribers.
At the same time, in addition to the major broadcast media that cooperated with YouTube, some artists also expanded their influence by opening their own media channels, which indirectly enriched the content resources of the YouTube platform.
On the other hand, according to YouTube's disclosure, the global YouTube watch time exceeds one billion hours a day, combined with YouTube's 2 billion monthly active users, there is room for full interaction with Google products to expand the social field.
2.2.5. Other applications
Google Search: Google's search engine is Google's core business and is currently the largest and most influential search engine on the Internet. In addition to searching the web, Google also provides services for searching images, newsgroups, news pages, maps, and videos
Google Drive: Google Cloud Drive is an online synchronous storage service launched by Google. It has been gradually opened to users since April 24, 2012.
Huawei offers HMS API to facilitate Covid-19 contact tracing app development
Google Cloud Disk provides users with 15GB of storage space for free and integrates Google Docs service to enable synchronization between multiple devices.
Gmail: Google's free email service released on April 1, 2004, with 1.5 billion active Gmail users as of October 2018.
With a storage capacity of up to 15GB, Gmail is popular among individuals worldwide.
Google Photos: Google Photos was released by Google in May 2015 and is a product of image storage and sharing services.
Google Photos contains unlimited photos, video storage, and related applications, supporting up to 16-megapixel photos and videos with a maximum resolution of 1080p.
In July 2019, the number of Google Photos users exceeded 1 billion.
Google Duo: Google Video Chat is a video phone application developed by Google that provides both Android and iOS versions. It was released on May 18, 2016.
Google Video Chat uses a phone number and climbed to No. 1 on the Google Play free app list 2 days after its launch.
2.3. What does GMS mean for Google
GMS service is a product that Google intentionally attaches to the Android operating system project, and it shows the trend of enhancing GMS service and weakening the AOSP open source project. Its importance to Google is self-evident.
We believe that the GMS service has the following benefits to Google:
GMS provides Google with a bundled application medium to indirectly promote its own App products.
In fact, mobile services have been a huge help in promoting vendor software products.
According to Google's European market statistics in 2016, Apple's iPhone 7 has 39 pre-installed apps installed in the iOS system of the iOS system;
Windows 10 Mobile for Microsoft Lumia 500 has 47 pre-installed apps from Microsoft;
The Android system on the Samsung Galaxy S7 has 11 built-in Google Apps.
Therefore, by providing GMS services, Google can disguise the requirement that mobile phone manufacturers carry their own apps, thereby achieving indirect profit.
GMS helps Google to strengthen central supervision and is a powerful tool for Android to resist fragmentation.
As the global installed capacity of the Android operating system continues to increase, the problem of Android fragmentation has become increasingly serious.
As of May 2019, 0.3% of mobile phone terminals are still using the Android 2.0 operating system, while the latest Android 9.0 version uses only 10.4%.
A large number of Android versions are continuously used, which significantly increases the costs for Google's company maintenance and development of App software developers.
Google launched the GMS service and transferred some Android functions to it, which is conducive to strengthening company management and achieving seamless upgrades through cloud-based updates.
GMS is a business service, which charges itself or makes a profit for the company in the form of cross-subsidies.
Unlike Android's open-source project AOSP, GMS itself is a commercialized service product that generates overhead related to cloud services and development and maintenance costs.
Affected by the EU's monopoly penalty for Google's Android, Google further clarified the charging model for GMS, and the relevant regulations came into effect in February 2019.
According to the instructions provided by Google, GMS's OEM license fee for each mobile terminal device is $40.
Although Google's “bundled” products can be fully subsidized by fully equipped with Google's supporting bundled products, thereby enabling the free deployment of GMS services, this cross-subsidization model can still make Google profitable, such as embedded advertising.
2.4. Why GMS is difficult to replace
We believe that there are three main reasons why GMS services are difficult to be replaced:
Implement push function and master the "App-User" interactive bridge.
Push is one of the core functions of GMS. It is developed by Google following the APNS of Apple iOS.
The push function enables the App software in the mobile operating system to be notified of messages, services, and promotions to users through system services such as GMS/APNS in non-running states, such as social software new message notifications, order information notifications, and app activity promotion Information push, related information push, etc.
GMS built-in apps form user stickiness and integrate into every aspect of life.
Google's GMS service has a built-in family bucket app, which covers maps, videos, emails, social networking, and so on. It can provide integrated solutions for user life, travel, and office. It can be deeply integrated into the user through access, thereby forming stickiness.
By increasing the replacement cost of users, a product moat has been established.
Hardware manufacturers have invested in adaptation costs for GMS, and software manufacturers have developed development habits.
A set of the certification processes of Google GMS service essentially creates the corresponding standard of the Android system.
In order to meet the release standards, both hardware vendors and software vendors need to meet the corresponding guidelines, which makes habits difficult to change.
In China, there are even small and micro enterprises specializing in Google GMS service certification testing and application.
3. Huawei HMS service in-depth analysis
3.1. Review of HMS Service Development
HMS Core is a collection of end-to-end and cloud open capabilities provided by Huawei Mobile Services, thus achieving consistency across devices and platforms, and providing core capability support for platform App applications.
The HMS Core service has been iterated to the HMS Core 4.0 version. The average monthly number of users has increased from 420 million in June 2018 to 530 million in June 2019. During the same period, the number of registered developers on the platform has increased from 450,000 to 910,000.
At the same time, the number of apps integrated into the HMS Core system also increased from 20,000 to 43,000.
HMS Core has been applied in more than 170 countries around the world and strictly complies with security and privacy-related regulations such as GApp and GDPR.
The product has been greatly reformed and the service has been widely extended.
HMS Core has gone through multiple version iterations at present, and the related development and function documents have been released in two versions: 2.0 and 4.0.
Earlier versions of HMS Core 2.0 only realized the embryonic form of mobile services, including push services, payment services, and game services.
Compared with earlier versions, HMS Core 4.0 version further expands map services, advertising services, cloud space services, etc., which greatly improves the availability of HMS Core services.
3.2. Full Perspective of Huawei HMS Service Layout
Invest heavily in ecology.
As a latecomer to mobile terminal services, in order to accelerate the market expansion, Huawei has invested huge amounts of money to support the development of the HMS service ecosystem and established a global fund of $1 billion to support developers.
In December 2019, Huawei announced that it would provide subsidies and rewards of up to $20,000 for apps ported to Huawei's HMS service ecosystem.
In January 2020, Huawei announced that it would provide US $260 million in funding in the UK to help developers port apps to the Huawei HMS service ecosystem.
At the same time, Huawei is also negotiating with up to 150 App-related software vendors in India. At present, Indian software vendors such as MakeMyTrip and Gaana have released related apps on Huawei HMS services.
A wide range of services, basically covering GMS functions.
HMS Core provides a total of 22 services, including Huawei account services, advertising services, and analysis services, which basically cover the functions that Google has embedded in GMS. Core services such as map services and cloud disk services have been set up accordingly.
According to Huawei's official website information, we compared Huawei HMS services with Google GMS services:
Compared with Google GMS service, we believe that Huawei HMS service has the following advantages:
(1) Tightly combine Huawei's market share advantage in mobile terminals to conduct business in wearable devices and other fields.
According to Statista statistics, Huawei's global market share of mobile phones has reached 13%. At the same time, it has been deployed on multiple terminals through the “1 + 8 + N” strategy. Its own hardware terminals with a high market share will provide Huawei with a good user base for promoting HMS services.
(2) Huawei Cloud, as a strong backing, has solid synchronization, push, and storage services.
Unlike Google, which started with a search engine business, Huawei has been relying on related hardware and communication equipment businesses to build a full-stack Huawei cloud product system from chips to applications.
Considering that mobile service synchronization, push, and storage services are highly dependent on cloud services, Huawei HMS services have a solid foundation in the above areas.
(3) Give full attention to artificial intelligence technology and carry out priority distribution of related service areas.
Huawei has added a large number of AI-related products to HMS services, including machine learning services, and possibly related analysis services and online identity verification services.
In our report "Huawei's AI Vision-The Real Big Industry in Ren Zhengfei's Heart", we fully analyzed Huawei's rich bottom-up in AI.
Although competitor Google also has rich technical reserves in the field of AI, it has not yet officially included related services in the GMS system or provided them to users.
The layout of emerging businesses has already begun, and future development prospects are expected.
Compared with Google's GMS service, Huawei still lacks in search engines and email services and lacks experience in building products in the social field. The game business has a limited user base, and there is a lot of room for improvement in related services.
Among them, the map business, as one of the important components of mobile terminal services, is a key business of Huawei.
At the 2019 Huawei Developer Conference, Huawei has released the Huawei Map Service Map Kit, indicating that its related technologies have made certain reserves.
At the same time, Huawei has completed the relevant application for Class A surveying and mapping qualification in July 2019 and has developed the AR full-scene spatial computing Cyberverse technology.
In April 2019, we signed a strategic cooperation framework with NavInfo. In November 2019, the two parties announced extensive cooperation in areas such as electronic navigation maps and autonomous driving maps.
3.3. HMS opportunities
Huawei HMS service is moving at an extremely fast speed
Huawei's HMS service is growing at an extremely fast rate. At present, the establishment of basic mobile service-related products has been completed.
However, the strong ecosystem of Google and GMS services has always been a huge challenge in the promotion of Huawei HMS services.
Therefore, some opinions on the market believe that Huawei's HMS service is only expected to make limited expansion in local markets, and it is difficult to fully develop.
In this regard, we believe that Huawei's HMS service faces the following opportunities, despite the challenges of powerful rivals:
The EU and Google have battled many times, and Huawei's HMS service is expected to benefit from it.
In recent years, in order to maintain market balance and protect domestic European companies, the European Union has repeatedly issued huge fines to American technology companies.
Among them, Google is the company that receives the highest amount of fines among all US technology companies, and the related penalties are highly related to GMS services.
According to the contents of the EU antitrust investigation document, the EU believes that Google mandates that mobile phone manufacturers must carry their own search engines, browsers, and other services and products through the GMS service, which constitutes monopoly competition. Therefore, in 2018, it issued a fine of 4.34 billion euros.
At the same time, if this behavior is not ended, Google will face an average fine of 5% of daily revenue.
As a countermeasure, Google decided to charge an OEM license fee of $40/unit for GMS equipped mobile phone manufacturers in Europe.
Therefore, the EU region has a strong demand for mobile-side services that replace GMS.
Actively preparing to join the GDSA Alliance, gathering everyone's power to challenge Google.
According to Reuters, Huawei, Xiaomi, OPPO, and Vivo, the four major Chinese-made mobile phone manufacturers, are working together to create an application platform, the "Global Developer Service Alliance" (GDSA).
GDSA enables developers outside China to upload App applications to the application stores of these four mobile phone manufacturers at the same time.
The platform is expected to launch in March 2020 and will cover nine regions including India, Indonesia, and Russia.
Previously, the three major Chinese-made mobile phone giants, Xiaomi, OPPO, and Vivo, jointly established the "Mutual Transmission Alliance" on August 19, 2019.
If Huawei enters the new GDSA alliance, it is expected to integrate the resources of China-made mobile phone manufacturers and further challenge the Google GMS ecosystem.
5G era AIoT cornering overtaking.
In the report "5G + AI: Harmony OS Initially Connected Everything", we made an outlook on the future development of the computer industry and believed that AIoT will accelerate its implementation in the 5G era.
In fact, Google is also making Android Things, Android Cars, and other related expansions based on Android for AIoT applications.
Although the Google Android project has achieved great success in the mobile terminal operating system, it is still in the exploration stage in the field of IoT and smart cars.
Huawei has a long-standing presence in IoT fields such as wearable devices and smart appliances and is also actively developing smart car-related businesses.
Therefore, in the emerging blue ocean market of AIoT, Huawei's HMS service is expected to seize the opportunity to achieve overtaking in corners.
The Chinese market is the basic market and we are actively exploring the markets of developing countries.
As far as the Chinese market is concerned, affected by related policies, Chinese users have long used a customized version of Android, which does not include Google's GMS service.
Therefore, the Chinese market itself is not sensitive to GMS, which is conducive to the development of Huawei's HMS services.
As far as the markets of developing countries are concerned, Huawei is actively exploring relevant markets and has launched relevant attempts in India.
As Xiaomi and other Chinese-made mobile phone manufacturers have been deeply involved in the Indian market for many years, they have ranked first in India.
At the same time, according to relevant statistics from DotC United, India's non-game app free list, India's domestic products occupy 35% market share, and Chinese manufacturers'App also have a certain share, resulting in the Indian market itself is not highly dependent on GMS.
Therefore, Huawei's HMS service is expected to take advantage of developing countries such as India to take the lead in opening up the situation.
4. Huawei launches HMS service is expected to be a historic turning point for China-made software
1. As of January 20, there were 400 million monthly active user users of HMS, which is expected to bring 400 million incremental monthly active user users directly into HMS software service providers to achieve operating-system-level bundled coverage.
According to Statista's related estimates, the global smartphone user scale will reach 3.8 billion in 2021. Combined with the market share of Huawei mobile phones in the past 5 years, assuming that its share in 2021 will reach 20% and each mobile phone is equipped with Huawei HMS services, corresponding The number of users is about 800 million. At present, Huawei's HMS service has about 400 million monthly active users.
2. Huawei's HMS covers more than 170 countries and regions around the world and will effectively drive HMS ecosystem companies from China to the world, from serving 1.3 billion users in China to 3.3 billion mobile Internet users worldwide.
Huawei's mobile phone market share of 13% in the global mobile phone terminal market is expected to further enhance the Chinese market position for partners and open overseas markets.
3. Google GMS is the core business carrier of the Android ecosystem. Its 18-year revenue from Google Store has reached 24.8 billion U.S. dollars, and Apple Store revenue has reached 46.6 billion U.S. dollars. With the vigorous promotion of Huawei HMS globally, Huawei Store is expected to have more than 10 times Room for growth.
According to Huawei's disclosure, Huawei has invested heavily in the development of HMS services.
In the future, Huawei also plans to provide a $1 billion reward fund to encourage developers to build an HMS ecosystem together.
Application Store: The application store is the main support for traditional mobile operating system giants such as Google and Apple to expand their software ecosystem and is therefore the focus of Huawei HMS services.
According to SensorTower related statistics, Google's Google Play and Apple's Apple Store had revenues of US $46.6 billion and $24.8 billion in 2018, and each achieved annual growth of more than 20%.
In contrast, Huawei HMS service currently has only 400 million monthly active user users. Assuming that each user contributes 50-100 yuan in revenue, the revenue from Huawei HMS service from the application store is only 20-40 billion Compared with international giants, there is more than 10 times more space.
While cultivating the software ecosystem, the application store will also construct its own set of design standards, including development and related testing, and the related companies will benefit significantly.
Maps: With reference to the characteristics of Google's GMS services, Google Maps occupies a decisive position. Therefore, we believe that Huawei's map services have the greatest room for improvement among various emerging HMS service applications.
According to data released by Google at 2019 I/O Developer Conference, Google Play currently has 2.5 billion monthly active user devices.
According to Huawei, Huawei's HMS service application market has 400 million monthly active users.
Assume that Google Maps is pre-installed on all devices equipped with Google GMS. If Huawei HMS service fully expands the map business, its market size should reach approximately 16% of Google Maps' business revenue.
According to Morgan Stanley's related calculations, Google Maps'revenue contribution in 2019 will reach 2.95 billion US dollars, 2020 will reach 4.86 billion US dollars, and it is expected to reach 11 billion US dollars by 2023, of which the contribution ratio of PC and mobile is about 1: 10.
Based on the above data, we believe that the future potential market size of Huawei Maps will reach 12 billion yuan.
5. Investment advice
The launch of Huawei's HMS service is expected to further improve Huawei's mobile terminal product system, thereby having more powerful capabilities to challenge Google's Android ecosystem.
Compared with the tens of billions of dollars in revenue of giant mobile operating systems such as Google and Apple, Huawei HMS services have more than 10 times the growth space.
The Huawei incident last year was a major turning point for the Chinese semiconductor industry. We believe that Huawei HMS will become a historic turning point for China-made software companies to go global, which is of great significance!
