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They're only losing the month of early access to the AOSP security updates. They can still ship them. Updates to firmware, drivers, etc. outside of AOSP from partners like Qualcomm is another story. They won't be losing anything they need to do those updates from Google though.
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It only really takes a day to integrate the updates from AOSP, run the full test suite and other testing. Everyone without the luxury of early access has to do that. It applies to a lot of software. 1 month of early access is really way too long esp. since so many have access.
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Yep they will be able to do the MRs and the security updates. However, they will need to change their processes concerning these updates which is a big challenges. The main issue is not having the Google Play Services
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It's not an issue within China though. Lets see how China actually responds to the boneheaded escalation of a trade war. I think they'll respond and cause 10x more US pain just like before. They can throw phony accusations at say, Apple, mirroring the US. Get the popcorn ready.
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They've broadcast what they were going to do and I'm sure China already knows what they're going to do in response. China is already winning. US is just destroying their own agriculture / manufacturing industries and looks like they want to wipe out tech companies now too.
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It is largely related to the USD as a world reserve currency, which is a key for US dominance as clearly stated by thay guy asking to ban cryptocurrencies. The USD dominance position is changing rapidly and this is one of the pillars of US dominance and its weakest point too.