Will ZTE be the next Huawei in the US? By that, we mean being discouraged from flourishing in the mobile market. Huawei has finally entered the United States but not without any problem. Carriers and retailers are urged to cut deals with Huawei. As for ZTE, the company has been the fourth biggest name in the country. That may change soon as the Chinese OEM has been found to be violating some sanctions it is supposed to follow in North Korea and Iran. In the US, the effect will be ZTE won’t be able to buy products from Intel and Qualcomm and some other American manufacturers. Obviously, this will have a great impact not only in the hardware area but also software.
ZTE was once told not to ship American-made components to the countries mentioned but didn’t follow. ZTE hid the practice and a long investigation revealed the truth. The US Department of Commerce confronted the company and ZTE pleaded guilty. No questions asked. It agreed to accept forfeiture of about $1.19 billion and civil and criminal penalty. To make things worse, ZTE will have to endure a 7-year suspension of denial of export privileges.
The US government is serious about catching violations of the Export Administration Regulations (EAR). We don’t think this will be the only company to be doing such. As for ZTE, it better do good next time lest it wants to lose the American market.