Huawei has been granted a temporary US general licence, meaning it can maintain its networks and provide software updates to existing handsets.
It comes after reports from Reuters and The Verge that Google has suspended business with Huawei, undermining its lineup of smartphones and tablets which run on Android.
The temporary licence scales back the restrictions imposed by the US government on Thursday, which had added Huawei and 68 entities to a blacklist making it difficult for the Chinese company to buy US-made goods.
The licence is for 90 days, the US Commerce Department said.
It will mean that those with Huawei smartphones using Google apps will be able to continue to do so.
They will also be able to use and downloads app updates provided by Google, a representative of the US-based tech firm said.
Huawei’s enormous sales figures in China and impressive growth in parts of Europe have seen the company overtake iPhone maker Apple in terms of market share.
Figures released earlier this month suggested that Huawei was now only behind Samsung in global smartphone sales, with 59.1 million shipments in the first quarter of 2019.
Google apps and services are a critical part of Android devices.
The loss of Google apps would not have made much difference in Huawei’s home market of China, where most Google apps are banned anyway.
But it would have made the phones very unattractive to customers in western countries.
Former US government adviser Philip Levy told Sky News that “serious things” needed to be sorted for Huawei, Google and chip makers, for whom the “rules are being turned upside down”.
He also warned that the US sanctions against China did not have a “clear direction” and could be disruptive to the country’s economic engagement – with the potential damage felt around the world.
Huawei has not commented about the temporary licence but said earlier that it has made “substantial contributions to the development and growth of Android around the world”.
It added: “As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefited both users and the industry.
“We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally.”
Sky’s US correspondent Hannah Thomas Peter said the Huawei row had marked a “miserable week on the US markets” amid “fears of a global recession driven by the escalating trade war between the US and China”.
She said US President Donald Trump is on “pretty safe ground politically” with his moves against China and Huawei, adding: “He has moved to protect the national security of his own country and no president has ever really been punished for doing that.
“His base elected him to office because of the robust positions he takes against countries viewed as adversarial, particularly when it comes to China and issues of trade. All of that goes down very well in the Mid West, the Rustbelt and other places that helped him get into the Oval Office,” she said.
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