Chinese smartphone companies mired in surging new global concern

Chinese smartphone companies mired in surging new global concern

posted Saturday Dec 8, 2018 by Scott Ertz

Chinese smartphone companies mired in surging new global concern

Over the past few years, fears over Chinese smartphones manufacturers has grown. In the US, under the previous administration, Congress banned the import of any Huawei phones, later downgraded from an outright ban to a governmental ban. Under the current administration, bans were renewed and expanded to include ZTE, and then reduced once again. Following the US lead, Japan has reportedly banned governmental use of both manufacturers' handsets.

These bans come from reports of Chinese government-backed software included on the phones, with the intent to log keystrokes and data transmissions. These fears were raised after several security firms raised concerns over some software discovered deep inside the Android operating system installed on handsets tested. Handsets are not the only concern, however, as UK telecom company BT has announced they will not use Huawei's hardware for their 5G installation and will, in fact, remove all existing Huawei hardware over the next 2 years.

Adding to Huawei's global troubles is the arrest of CFO and deputy chairman, Meng Wanzhou. She was arrested by Canadian authorities at the request of US law enforcement, with extradition expected quickly. While charges have not been made public, it is likely that it has to do with violations of international sanctions against Iran. The company has reportedly shipped handsets to the country, despite sanctions over human rights concerns.

During the last Olympic games, Samsung had to scramble to deal with the sanctions themselves. While not shipping handsets to Iran regularly, their plan, as a title sponsor, was to give special phones to every Olympian. Unfortunately, sanctions prevented them from following through on the gifting to both Iran and North Korea. Olympians from those nations were required to return the phones after the games. Huawei could certainly learn a lot from the commitment of Samsung in this case.

This will not be the end of troubles for these two manufacturers, however. With 5G installations underway internationally, Huawei stands to lose a lot in their network infrastructure sales. And, if more countries follow the lead of the US and Japan, handset sales will be a problem, as well.

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