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OpenHarmony open-source operating system being championed

in

China

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HarmonyOS overtakes Apple's ( AAPL ) iOS in popularity on Chinese

smartphones

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Western operating systems face loss of market share

-analyst

By David Kirton

SHENZHEN, China, June 28 (Reuters) - Packed into a small

room, a drone, bipedal robot, supermarket checkout and other

devices showcase a vision of China's software future - one where

an operating system developed by national champion Huawei has

replaced Windows and Android.

The collection is at the Harmony Ecosystem Innovation Centre

in the southern city of Shenzhen, a local government-owned

entity that encourages authorities, companies and hardware

makers to develop software using OpenHarmony, an open-source

version of the operating system Huawei launched five years ago

after U.S. sanctions cut off support for Google's

Android.

While Huawei's recent strong-selling smartphone launches

have been closely watched for signs of advances in China's chip

supply chain, the company has also quietly built up expertise in

sectors crucial to Beijing's vision of technology

self-sufficiency from operating systems to in-vehicle software.

President Xi Jinping last year told the Communist Party's

elite politburo that China must wage a difficult battle to

localise operating systems and other technology "as soon as

possible" as the U.S. cracks down on exports of advanced chips

and other components.

OpenHarmony is now being widely promoted within China as a

"national operating system" amid concerns that other major

companies could be severed from the Microsoft Windows

and Android products upon which many systems rely.

"This strategic move will likely erode the market share of

Western operating systems like Android and Windows in China, as

local products gain traction," said Sunny Cheung, an associate

fellow at the Jamestown Foundation, a U.S. defence policy group.

In the first quarter of 2024, Huawei's HarmonyOS, the

company's in-house version of the operating system, surpassed

Apple's ( AAPL ) iOS to become the second best-selling mobile

operating system in China behind Android, research firm

Counterpoint said. It has not been launched on smartphones

outside China.

Huawei no longer controls OpenHarmony, having gifted its

source code to a non-profit called the OpenAtom Foundation in

2020 and 2021, according to an internal memo and other releases.

But both the innovation centre and government documents

often refer to OpenHarmony and HarmonyOS interchangeably as part

of a broader Harmony ecosystem. The growth of HarmonyOS,

expected to be rolled out in a PC version this year or next,

will spur adoption of OpenHarmony, analysts said.

"Harmony has created a powerful foundational operating

system for the future of China's devices," said Richard Yu, the

chairman of Huawei's consumer business group, at the opening of

a developer conference last week.

Huawei did not respond to a request for further comment.

SELF-SUFFICIENCY

Huawei first unveiled Harmony in August 2019, three months

after Washington placed it under trade restrictions over alleged

security concerns. Huawei denies its equipment poses a risk.

Since then, China has stepped up its self-sufficiency

efforts, cutting itself off from the main code sharing hub

Github and championing a local version, Gitee.

China banned the use of Windows on government computers in

2014 and they now use mostly Linux-based operating systems.

Microsoft ( MSFT ) earns only about 1.5% of its revenue from China,

its president said this month.

Originally built on an open source Android system, this

year Huawei launched its first "pure" version of HarmonyOS that

no longer supports Android-based apps, in a move that further

bifurcates China's app ecosystem from the rest of the world.

A report from the Jamestown Foundation last month said

OpenHarmony's owner OpenAtom appeared to be coordinating efforts

among Chinese firms to develop a viable alternative to U.S.

technologies, including for defence applications such as

satellites.

Beijing-based OpenAtom did not respond to a request for

comment.

OPEN SOURCE

OpenHarmony was the fastest-growing open-source operating

system for smart devices last year, with more than 70

organisations contributing to it and more than 460 hardware and

software products built across finance, education, aerospace and

industry, Huawei said in its 2023 annual report.

The aim of making it open source is to replicate Android's

success in removing licensing costs for users and to give

companies a customisable springboard for their own products,

said Charlie Cheng, deputy manager of the Harmony Ecosystem

Innovation Centre, when Reuters visited.

"Harmony will definitely grow into a mainstream operating

system, and will give the world a new choice of operating system

besides iOS and Android," he said. "China is learning from the

West."

Google, Apple ( AAPL ) and Microsoft ( MSFT ) did not respond to requests for

comment.

The Harmony ecosystem has seen strong support from Huawei's

home city of Shenzhen, a city historically used as a trial site

for policies later adopted across China.

Along with a Harmony centre that opened in the southwestern

city of Chengdu, 10 more are expected in a further 10 cities,

according to a Shenzhen centre presentation.

Key OpenHarmony developers include Shenzhen Kaihong

Digital, headed by Wang Chenglu, a former Huawei employee known

as Harmony's "godfather", and Chinasoft ( CFTLF ). Both have

worked on infrastructure software, at Tianjin Port and for mines

in China's top coal-producing province Shaanxi.

While OpenHarmony is largely confined to China,

Brussels-based open-source group the Eclipse Foundation said it

was using it to develop a system called Oniro for use in mobile

phones and internet-of-things devices.

China's previous efforts to build major open-source

projects have struggled to gain traction among developers, but

Huawei's growing smartphone market share and extra work to

develop a broader ecosystem gives Harmony an advantage, analysts

said.

More than 900 million devices, including smartphones,

watches and car systems are running on HarmonyOS, while 2.4

million developers were coding in the ecosystem, Huawei's Yu

said this month.

"OpenHarmony will need more time and iterations so that

these developers will be more confident to work with

OpenHarmony," said Emma Xu, an analyst with research firm

Canalys. "But the reputation, behaviour and confidence that

HarmonyOS has achieved will definitely bring a positive effect."