Huawei Technologies has become the centerpiece in the rising dispute between the US and China. With Huawei becoming the second largest seller of smartphones globally, the issues facing the company have taken on a more serious turn. Huawei was initially founded in 1987, following which it expanded into different domains and managed to become the second largest seller of mobile phones across the globe. Unfortunately, the rise of the company has been met with speculations that this allows Huawei to use its technology to collect data as well as spy on its customers. The CEO of Huawei was a former member of the People’s Liberation Army, adding to concerns about espionage and mistrust. However, Huawei has maintained that it acts as an independent company and has no ties with the Chinese government.
Huawei first faced espionage allegations in 2012. This was followed by US intelligence agencies alleging in 2018 that Huawei devices consist of a backdoor, which allows the Chinese government to spy on the customers. Although no evidence has been released yet, these allegations have dogged the Chinese company till now, even resulting in severe sanctions being placed on it by the US government. Huawei’s CFO was arrested in December 2018 and charged with conspiracy to defraud multiple international institutions.
As of May 20th, the Trump administration has eased restriction on Huawei by allowing it a temporary license to offer service and support, as well as software updates to its devices.
With the ongoing turmoil at Huawei, Samsung seems to have a good chance in strengthening its position as number one in the smartphone market globally. As a result of the turmoil, tech companies like ARM and Google will stop updates and supplies to Huawei.
Losing access to Google’s Android system will be a huge blow to the Chinese company, allowing Samsung to increase its market share according to Fitch Ratings.
The severe sanctions put forth by the US government agents Huawei prevented the company from purchasing American goods. According to the rating agency, Apple Inc can also face problems as a result of the trade tensions between the US and China by resulting in major market share loss in China.
Huawei is one of the major providers of smartphones that are 5G enabled. The current issues faced by Huawei will make it difficult for the company to compete with the other companies in getting a footstep in the race when the next generation of wireless technology is rolled out.