ZTE Corp, China’s second largest telecom equipment maker, was hit by a ban last month at Washington after the company was found to have violated export restrictions of the US by shipping goods to Iran. Reports have been in the air for a while, but this ban is real and will have implications for the company’s Android business as we know it, both here and abroad.
It’s not often we report on ZTE around these parts, but a lot has been going on around the company. In the latest report on the ban situation by Reuters, ZTE Corp says that it is trying to have the ban modified or possibly reversed. This won’t be easy, but is clearly worth every bit of energy trying. I mean, what do you expect? In case you don’t know, this ban prohibits a handful of major activities and functions by the company including its ability to use US suppliers, which would impact its global supply chain. As per the article source, ZTE now has just barely enough revenue to be in compliance with the laws and regulations in place.
Analysts have said that it will be hard for ZTE to stay competitive and turn a sufficient profit even shall it find non-American suppliers going forward. This is because America is one of the largest markets for ZTE and its Taiwanese semiconductor company you may have heard of, Mediatek. This branch produces the processors inside many low to mid-range Android smartphones today, so there are your implications.
As mentioned, ZTE is in hopes of reversal or at least some modification of the ban as it is in constant talks with the US government, who previously said the ban was “unavoidable” as it would have led to a trade war between the US and China. For the very same reason, the US Government has put restrictions on other outside companies including some Chinese OEMs as they pertain to the US and expanding to its markets. Never have we see the government get involved in our parts, but this has been the case all throughout the last few months with Huawei and others, and many are hoping it won’t continue with those currently looking to expand their smartphone products to the US.
Right now there’s nothing more that we know. We’ll have to just wait and see how everything turns for ZTE. This is a tough area to be in, especially for a company like ZTE. Let’s hope the company can continue business somewhat as usual as it pertains to the Android sphere. Even though it does not seem like this will result from the situation, there’s still hope so stay positive.