Huawei to exit U.S. market over spying allegations?


Huawei’s 69-year-old CEO, Ren Zhengfei, has not done a lot of media interviews in his life. In fact, when he sat down with five French media outlets last week, it was only his second official media interview. While the emphasis was on Huawei’s business and past and future investments in France, Zhengfei also told Les Echos that Huawei was exiting the U.S. market. Given its not-negligible presence in the budget smartphone segment, the comment caused quite a stir in this sector.

According to Les Echos, Huawei’s withdrawal is limited to networking products. The Chinese company has faced intense scrutiny in North America with allegations that it spies on behalf of both China’s military and intelligence communities plaguing it for years when products such as routers and switches are deployed on networks. Security reviews conducted to date have found no evidence of such spying but that has not prevented U.S. companies from facing pressure not to do business with Huawei even as federal regulators have tried to limit sales in the U.S. With no end in sight, Huawei has decided to step aside to avoid being caught in the middle of U.S.-China relations.

Huawei’s exit does not appear to extend to smartphones though. As Zhengfei points out, Huawei’s smartphones are powered by Google Android which he says is an American operating system and not theirs.

Huawei is not the only Chinese company to have faced such scrutiny abroad. ZTE has faced similar accusations and Lenovo was reportedly recently prevented from acquiring BlackBerry by the Canadian government over national security concerns.

No timeline was given for Huawei’s exit from the U.S. market. It also remains to be seen how this will affect Huawei’s operations in Canada. For example, WIND Mobile uses Huawei technology for its cellular network.

We’ll have to see how this shapes up in the coming weeks and months.

Sources : Les Echos // Foreign Policy // The Globe and Mail