The Chinese phone manufacturer Huawei is bidding to snap up market share in the United States, but lawmakers in Congress are urging AT&T to cut its ties to the phone manufacturer and work with other companies. It’s not the first time Huawei’s government ties have caused heartburn on Capitol Hill, and it comes just a week after Huawei’s US launch of the Mate 10 was reportedly scrubbed at the last second.
These new allegations are from Reuters, which reports US lawmakers also oppose plans from the Chinese telecom China Mobile Ltd to enter the US market. Issues identified by the regulators as problematic also include an AT&T-Huawei collaboration over the emerging 5G standard and AT&T subsidiary Cricket selling Huawei phones as well. Apparently the problems are serious enough that lawmakers have been warning corporations that deploy Huawei hardware that they may not be eligible to work on government contracts.
Huawei’s global market share has risen sharply over the past few years, including strong gains in a matter of months.
If you’re thinking this all sounds rather familiar, well, you’d be right. Both the Trump and Obama Administrations have sounded similar warnings on Huawei over the years. The result is a US smartphone market that’s somewhat different from the globe as a whole. Samsung and Apple are still the top two device manufacturers worldwide, but from there the list diverges. Globally, Huawei, Oppo, and Vivo round out the top five (Others claims a 41.7 percent share of the market). In the United States, LG, Motorola, and HTC round out the top five, or did as of a year ago.
In 2012, both Huawei and ZTE were the subject of a US government investigation into whether their networking equipment and mobile phones offered loopholes or backdoors that could be exploited by actors working for the Chinese government. The government found neither company’s responses sufficient, but hammered Huawei in particular for failures in transparency. Huawei refused to explain aspects of its corporate structure, its ties to the Communist Party, the results of a 1999 tax fraud audit, the situation in which that audit was dropped, or any financial documents that would support Huawei’s claim to operate as a completely independent entity from its parent organization.
While none of Huawei’s potential US partners have said much about the report, Huawei and ZTE handsets remain rarities in the US market. And in a way, that’s a shame. The US market could benefit from better competition in handsets, particularly at the lower end where low-cost Android devices now offer surprisingly good performance for your dollar. Unfortunately, the past few years has also emphasized both the pervasive security problems posed by mobile devices (including the IoT) and the degree to which cyberwarfare has decidedly real-world consequences. From disinformation campaigns to attacks levied at specific sites or companies, things have gotten more heated. The last thing we need is to deliberately invite such problems to take root.
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