Will AT & T’s call to drop Huawei’s end phone maker’s US hopes?

Will AT & T’s call to drop Huawei’s end phone maker’s US

AT The consumer electronics show in Las Vegas last week, one piece of news especially for Chinese phone-maker Huawei . Despite months of preparation, the giant US mobile carrier AT & T announced last Monday that it was pulling out of a deal to sell Huawei’s smartphones.
The decision was taken by the American Federal Communications Commission (FCC) – who said they had written to the Federal Communications Commission (FCC) – which must approve of the sale of phones and other devices in the US – saying they had “long Chinese spy in general, and Huawei’s role in that espionage in particular “. Richard Yu, chief executive of Huawei ‘s consumer division, was forced to go with the motions of introducing new spending and spending $ 100m.
For Huawei, it’s a wearily familiar story. Although it’s $ 75bn annual revenue, it’s still a lot more expensive than ever before. In US politicians’ eyes, the fact is that Ren Zhengfei was once a Red Army officer is a stain that can not be washed away. Australia, too, has banned it from providing network equipment.
Goal Huawei is not alone. Earlier this month, the Committee on Foreign Investment in the United States (CFIUS) , which can block overseas acquisitions, stopped Chinese firm Ant Financial’s $ 1.2bn purchase of US money transfer business Moneygram. CFIUS was not convinced that US citizens’ data would be safe.
Last autumn, the US Department of Homeland Security told government departments to stop using Kaspersky Lab , the Moscow-based company which provides antivirus and cyber-security products, on the basis it was “concerned about the links between certain Kaspersky officials and Russian intelligence and other government agencies”. China is ripping the US off, but then retreated from any action.
Whether the US would seek a quid pro quo – where Huawei might be allowed Google, Facebook and Twitter can sell their services (via advertising and social networks) china – is unclear.
The tenor of the shares, though, seems more protectionist than bid-opening. Ben Thompson, who runs the Stratechery technology analysis newsletter , thinks that the Chinese-American tensions are “the first salvo of what is likely to be one of the biggest stories in tech in 2018”.
Last week’s rejection by AT & T really matters to Huawei, because it could drastically curtail its future. It is already US telecom equipment in the US following a report from the US intelligence committee (HIC), and had multiple takeovers blocked. But it was hoped that the 2012 report did not block.
Though it is the world’s third-biggest smartphone maker and the biggest in China, the world’s biggest market, it’s all about saturation: everyone who wants one has one.
But the US, the world’s second-biggest market, has been effectively untapped; selling through AT & T, the carrier that originally offered the iPhone in 2007, could have kickstarted a new era and fulfilled Huawei’s ambitions to overtake both Apple and Samsung. Instead, it reaffirmed that the old rules remain in place. Non-carrier sales in the US are less than 10% of the overall 170m a year total, which is part of the reason why Apple and Samsung have 70% of the market: they are sold by all the carriers.
The frustration for Huawei may be amplified by the UK. When it comes to Huawei, what does it mean to China, which would allow China to carry out remote spying, or even shut down systems, in November 2010 set up an office called “The Cell” with oversight from GCHQ where devices and software could be examined in minute detail for any flaws. So far, that has salved concerns.
Meanwhile, itHuawei is the second-biggest smartphone supplier in Europe, including Finland, Italy and Spain, where its lower-cost models are seen as better value than Samsung’s.
The company is not giving up, though. In a statement after the AT & T decision, Huawei said: “While the Huawei Mate 10 will not be sold by US carriers, we will be committed to this market now and in the future. US customers need a better choice, as a leader in technology and innovation, Huawei is prepared to fill this need. ”
Yu addressed the topic directly to that frustrating Mate 10 launch. Standing in front of a slide reads “Something I Want to Share,” he told the audience that it has gone down in numbers worldwide, with more than 70 million customers. Yu has previously stated his ambition to overtake Apple and Samsung to become No 1.
He will have to hope that the next six years will see Huawei overcome the political obstacles as it overcame technical hurdles. But five years on the HIC report, it’s clear they are not going away.

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