Phones and Force: The Geostrategy of Smartphones in an Era of US-Chinese Competition
The United States’ system of foreign bases has largely mediated the relationship between security, economics, and innovation. However, this relationship will likely evolve during the upcoming decade. While bases and their underlying geostrategic rationale will remain important, smartphones and their supply chains will gain geostrategic significance as everything from online banking to social networking occurs on smartphones and their associated operating systems (OS) and applications. The Gulf States, through Apple and Huawei, have gravitated toward the United States and China, respectively, despite smartphones falling in the realm of consumer preference rather than government policy. The United Arab Emirates and Oman (along with other Gulf countries) have markets ripe for smartphone production. Their strategic importance makes them noteworthy test cases in the rising geostrategic significance of supply chains.
Alongside global supply chains, the OS and applications on mobile phones foster a well-documented economic relationship, as well as a political dynamic, between user and producer and buyer and seller, respectively. Unlike a traditional exchange of money for a product or service, many applications and online services add a few steps to this social exchange. Some applications are free to use, but in exchange the companies gain legal access to personal data. They could also influence what customers do and do not interact with on their platforms.
Of particular importance, smartphone-based leverage could place influence on 35 percent of all seaborne oil shipments and 20 percent of all oil shipments. These shipments pass through the Strait of Hormuz, a regional determinant of geostrategy. With the Emirati port of Fujairah located at the strait’s eastern end, many covet the United Arab Emirates’ position for securing shipping into the Persian Gulf. Foreign powers view the United Arab Emirates, and its port management by Dubai Ports World, as especially vital to shaping the regional landscape. Furthermore, the United Arab Emirates allows foreign navies (e.g. France, the United States, and the United Kingdom) to use its ports for sea-lane protection.
Tension between a nascent civil society preferring Chinese technology and ruling elites could pull the United Arab Emirates toward a market-influenced alliance with China instead of its historical alliance with the United States. Huawei’s dominant market-share threatens US interests specifically when China can coerce countries in the US near-abroad or obstruct the US capacity to cordon China off from strategic resources like oil. This major prospective shift from Cold War geostrategy unfolds as the United States reevaluates its role as guarantor of international shipping in the Persian Gulf. Concurrently, China’s energy necessities diverge from its limited naval capabilities. 2014 figures indicate 16 percent of its crude oil imports came from Saudi Arabia, 10 percent from Oman, and 4 percent from the United Arab Emirates. Therefore, these three suppliers must take China into account when making policy decisions.
In conjunction, Oman’s mobile vendor market share skews toward Huawei. The makings of an ally near a critical choke point emerge around this mismatch between base strategy, state-owned corporate assets, and consumer-guided alliances. A near 30 percent preference for Huawei in Oman could prove strategically relevant, alongside a roughly 10 point difference in favor of Apple in the United Arab Emirates. Couple this with Oman having a 2018 smartphone penetration rate at 66.2 percent and the United Arab Emirates at 96.9 percent. The state voluntarily cedes its monopoly on force somewhat when these companies enter domestic markets. Countries like Oman and the United Arab Emirates risk losing their citizens’ loyalty as the populace becomes progressively dependent on a foreign corporate ecosystem facilitated by Apple or Huawei. This dependence opens any state to increasingly intimate forms of cyber threats.
China could influence political discourse, engage in sabotage operations, spy on elites, or even subtly change smartphones’ sound and lighting to alter people’s moods before a major political event. It could also threaten to shut down smartphone supply chains to a customer like Oman if China felt a potential US-Iran conflict threatened its oil shipments. Huawei’s noteworthy spread in Oman grants China these points of leverage, despite lacking a navy that could threaten the US position in the Gulf. These potential scenarios could, at minimum, lead Oman to negotiate for Chinese interests and even unravel any US allied consensus.
Either way, any US action in the region now needs to account for this possibility and the temptation to overreact. In facing the challenge posed by Huawei, the United States should actively promote Apple and other US products in all states vital to Chinese or US interests, while letting anyone else use Huawei. Such a focused policy would contain the Huawei challenge with negligible damage to less important bilateral relationships, while still allowing the United States to work with allies like Oman and the United Arab Emirates to further its own interests. The United States otherwise risks the masses in these less-strategic states growing combative and putting their faith in China.