While there's been plenty of talk about the consequences of Google, ARM, Qualcomm, the SD Association, the Wi-Fi Alliance, carriers, and the USB-IF no longer working with Huawei, one company has been kept out of the discussion to date: the Bluetooth SIG.
For those of you who may not know, the Bluetooth SIG is a non-profit corporation headquartered in Washington state, and it holds all the keys to its trademark, closed-source wireless technology. Nobody can build a product with Bluetooth without the blessing of BT SIG, and it requires every product to use the technology to go through its certification program. The problem is that it will almost certainly not be able to do so for any Huawei products going forward, owing to a certain Presidential Order.
A smartphone without Bluetooth may not sound like the worst thing in the world, but I'd argue this may be the last straw for Huawei's already-endangered smartphone business. A phone without Bluetooth can't connect to wireless headsets or speakers. It can't pair to in-vehicle infotainment systems. It can't be used with countless accessories, smart home devices, fitness trackers, or smartwatches. Think about that: Huawei wouldn't be able to build a phone that worked with its own smartwatch, or even the smartwatch itself. A smartphone without Bluetooth - even a very cheap one - isn't just bad, it's fundamentally uncompetitive in a way that would not make it worthwhile to build in the first place. It would be a product without a customer.
Huawei could attempt to reverse engineer the Bluetooth specification or use the technology without a license in China, where it would enjoy relative immunity from the Bluetooth SIG's legal attacks, but in almost any other nation in the world such a strategy would be unlikely to work - injunctions would be handed down and the phones barred from sale. Truly, the impact of this would be the utter devastation of Huawei's phone business in a way few other companies could match. The Bluetooth SIG has rarely had to go so far as to sue licensees, but it did last year when it took on Chrysler for attempting to weasel its way out of paying license fees. That case is ongoing.
Suffice it to say, though, that the Bluetooth SIG holds all the cards here. No competing technology exists, and there's every reason to think Huawei will be unable to license handsets (or watches, or laptops, or tablets) going forward. The Bluetooth SIG's unique position as a non-government entity through which basically every smartphone on the planet must pass arguably makes it even more important to Huawei's business than Google. Huawei can keep making smartphones without Google's apps and services - people would probably just sideload most of them anyway. But a phone without Bluetooth is not something that is easily worked around. One very inelegant solution could be to encourage buyers to purchase Bluetooth transmitter dongles, but such products don't have meaningful market penetration and rely on 3.5mm headphone jacks that smartphones are increasingly foregoing. But Huawei wouldn't even be able to build the dongle, it would have to rely on the demand for such products in the aftermarket materializing.
We've reached out to the Bluetooth SIG for comment, but given the holiday weekend here in the US, we're not expecting an immediate response. We'll also be reaching out to Huawei for comment on the Bluetooth certification status of its upcoming smartphones, including the Honor 20 Pro and the Mate X.