Huawei can’t complain about its smartphone sales and their evolution in recent years, but it seems that they were getting too much attention from the United States. This year the U.S. added Huawei to its Entity List, but there’s so much more happening behind curtains. If you want to know everything about the Huawei ban, you’ve come to the right place.
When did the problems between Huawei and the U.S. start?
Huawei has been having problems with the U.S. for years now. It all started in 2001, when they finally opened their first office in the U.S. and the UK. During this year, India’s intelligence had placed the company in a watch list for allegedly supplying the Taliban with military telecommunications equipment. This was finally dropped because there was never proof of these deals, and Huawei denied having anything to do with the Taliban since their practices were abiding the rules of the UN.
Two years after that, Cisco accused Huawei of stealing source code from its routers. Huawei accepted these practices, but they reached an agreement. Now, things started to heat up in 2007, when Huawei wanted to buy part of 3COM, a tech company in Massachusetts. Huawei wanted 16.5% of the company, but lawmakers in the Bush Administration advised to block the purchase since Huawei was considered one of China’s least transparent companies. The deal was finally not completed in 2008, and in the same year, the FBI started to investigate Huawei’s founder for violating U.S. trade sanctions, for making deals with Iran in 2007. If you think that sounds familiar, it’s because Huawei was also accused of doing so again this year.
However, 2010 was a troublesome year for Huawei since they got sued by Motorola for corporate espionage. They were also trying to go to work with Sprint and build its mobile network, but it was blocked by Obama’s Administration for national security concerns. Huawei could still build a 200,000 square foot facility in California in April 2011, because they were hoping to expand to the US. Still, their intentions were frustrated again because of the same national security concerns.
By 2012 Huawei and ZTE were mentioned in a report by the U.S. that said that these companies could not be trusted. This report also accused these companies of unusual behavior, and that they also used their equipment to send data to China. The interesting part is that there was no proof of this in the public version of the report, but that also made Australia block Huawei from its National Broadband Network.
In 2013, Softbank bought Sprint, but to do so, they had to promise not to use Huawei equipment to improve the network. During this time, one of Huawei’s CFOs was linked to a Hong Kong company that tried to sell U.S. tech to Iran. The following years didn’t give us important events except for the end of 2017 when the U.S. decided to review China’s intellectual property policies.
January 2018, Huawei was already getting ready to launch its devices in the U.S., and the Huawei Mate 10 series was the one device that everyone was waiting for. Huawei had made arrangements for this device to be available in Verizon and AT&T, but then both companies backed out and Huawei’s CEO Richard Yu talked about this during 2018’s MWC. Then in February, six US intelligence agencies warned people about the use of Huawei and ZTE products, while a memo of Trump’s administration said that Chinese companies are a threat when it comes to 5G networks.
By March, Huawei had lost Best Buy as a retail partner to sell its devices, and two months later the Pentagon was banning sales of Huawei and ZTE phones on US military. To make matter worse, a report revealed that Facebook was giving Huawei special access to user data, and then the government started to call out on Google for its ties with the Chinese company.
In spite of all these problems, Huawei managed to take Apple’s second-place as phone seller on a global scale by August 2018, and things were starting to look better. Unfortunately, in December 2018 Britain’s BT said that it was going to remove Huawei’s 4G equipment, and that it wasn’t going to use its 5G core. To make matters worse, Huawei’s CFO Meng Wanzhou was arrested in Canada upon request of the US. Reuters also reported that Japan was going to stop buying Huawei and ZTE material, but December wasn’t all bad. Huawei exceeded 200 million smartphone shipments, and the Canadian court granted Huawei’s CFO bail for $10 million.
On January 3rd, a report suggested that President Trump wanted to use an executive order to ban Huawei and ZTE purchases, and ZTE already knew what that was like. During the same month, Huawei went to CES to try and stay in the US with laptops and tablets. They also fired an employee that was arrested over the alleged spying. Then China as a nation started to react to the “harassment” their companies were facing on behalf of the US and Canada. They said that the Canadian ban on Huawei’s 5G tech could bring repercussions. At the same time, Huawei was making declarations that placed them on top of smartphone sales by 2020, taking the crown away from Samsung.
By the end of January, the U.S. came at Huawei with 23 indictments for alleged trade secret theft and fraud. Colleges started dropping Huawei equipment, and rumors of a new Huawei foldable phone coming in February were getting stronger. However, February wasn’t so great, since the U.S. started discouraging European countries from using Huawei’s 5G equipment. Even secretary of State Mike Pompeo said that any country using Huawei technology would pose a risk to the US. Shortly after that Huawei was presenting the Huawei Mate X, while more European countries were taking sides with the U.S. on a possible Huawei ban.
By March of this year, the United States had warned many countries against the use of Huawei’s technology. Huawei wasn’t going to just sit there, so they sued the U.S. government over its equipment ban, and they also called for international cybersecurity standards. The U.S. also told Germany to drop Huawei products, or they would limit the intelligence they shared with them, or at least those were the rumors.
Huawei sales kept on growing with the Mate 20 hitting 10 million devices shipped. Rumors also said that the Chinese giant was working on developing its own OS in case they couldn’t use Android or Windows anymore, and on building a chip factory in the UK.
On March 26, we saw the launch of the Huawei P30 and P30 pro in Paris, maybe one of the best phones of this year. Three days later, Huawei said that the U.S. was having “a losers attitude” because its tech couldn’t compete with them. Whatever the case, Huawei just wanted to surpass Samsung and Apple in sales, at the same time that MIT servers were linked to Huawei and ZTE, so that the U.S. could carry out their investigation.
By this time Huawei was also open to selling 5G chips to Apple, and that was great considering that Intel modems haven’t been so great in iPhone models lately. Reports also said that during the month of April, the U.S. wasn’t demanding a Huawei ban from other countries, and even Britain would reportedly allow Huawei limited access to 5G infrastructure. Unfortunately, on April 3, Vodafone reported having found hidden backdoors in Huawei equipment.
May started great, with Huawei hitting 50% phone sales growth, but on May 15 President Trump completed his Huawei ban with a national security order. This ban would significantly harm American jobs and companies because Huawei buys components from companies in the US. It seemed that things weren’t that big of a deal until Google announced it was going to cut off future Huawei phones from Android updates. On May 20, Huawei got a temporary reprieve from the US trade ban, so that the Chinese company could still work with U.S. companies. Unfortunately, this ban made ARM, the company that’s behind the architecture of the Kirin processors drop Huawei and the UK also left out the Huawei Mate X from its 5G launch.
By this time, Huawei was already working on a way to get past this ban. They wanted their app store to compete with Google. They were also developing a new operating system called Hongmeng OS. China also started to move against the U.S., and there was a possibility that the country was planning against Apple, even though the founder of Huawei said that he’d be the first to protest if that happened. By the end of May, Huawei was asking the court to rule this ban as unconstitutional, since there was no proof of them spying. Fortunately, before the month was over, Huawei restored its membership to the SD Association and Wi-Fi Alliance. They also launched a 5G lab and made its wearables shipments quadruple in the first quarter of 2019.
Huawei started taking more action during June. They reportedly started to decrease the production of phones because of the issues with the US. There was also supposed to be a Huawei trade secrets trial being held in Texas while the chairman of the company said that they would sign a “no-spy” deal with the US. But this ban was now also starting to affect American companies. Facebook stopped letting Huawei preinstall apps, and Google warned that this ban also creates a national security risk because of this new OS.
By June 10, Huawei was already asking developers to publish on their AppGallery store, while the White House was apparently trying to delay the government’s Huawei ban. Hongmeng OS was close to being officially registered and Huawei was going after $1 billion from Verizon for patent licensing fees. Of course, they also said that they would need more time to surpass Samsung in smartphone sales. The good thing is that Microsoft had already started to sell Huawei’s laptops again by June 18, and the Huawei Mate X was also rumored for a September launch.
The last days of June were marked by the launch of new Nova 5 smartphones while tensions between U.S. and China started to settle down. Huawei keeps on investing in 5G, and the U.S. starts thinking about requiring domestic 5G equipment to be made outside of China. Some companies have been bypassing the Huawei ban, and FedEx sues the Commerce Department over Huawei packages. The best part is that on June 29, Trump decides to lift some restrictions, and now companies started selling to Huawei without any type of repercussions.
On the first day of July, Trump decided to officially lift restrictions to Huawei only on widely available products, even though the Commerce Department still has the company blacklisted. Huawei is still not sure if their future devices will have Android, even though their Hongmeng OS alternative was supposed to be up to 60% faster than Android, or at least that’s what their CEO said. By that time, the U.S. government was trying to get Huawei’s lawsuit dismissed, and they also allowed licensed sales to Huawei again.
By mid-July, Canada said that they were going to wait until after October elections to decide on the Huawei ban. A group of senators introduced 5G legislation that would keep Huawei blacklisted. Things got even more interesting when the Chinese giant confirmed that Hongmeng OS was not an alternative to Android or a replacement. This software was never designed or intended for smartphones since it contains fewer lines of code than a phone OS. There have also been reports that suggest that Huawei helped to build North Korea’s wireless network in secret.
August has brought more information concerning this ban. We received information that Huawei had already started to make tests on their smartphones with HongmengOS, even though they recently said that this operating system wasn’t designed to be used in smartphones. There is also a rumor that says that this new OS will come in the new Huawei Mate 30 series, but there’s also information that says that there could also be a mid-to-low-end-class device that could also include this OS and its price would be around $288.
Huawei losing access to Google would indeed imply a big hit to their interests, but the U.S commerce department started to consider giving Huawei another 90 days reprieve from the ban. This information was later confirmed on the 19th.
This trade war between the United States and China that’s affecting Huawei is far from over, we’ll keep you posted, so stay tuned.