It is no secret that Chinese phone makers have a bit of a hard time penetrating the United States mobile market. It may have something to do with all that espionage stuff, but the truth of the matter is, it is about to become even harder. According to a report by Reuters, Chinese phone maker ZTE is about to handed restrictions regarding what it is permitted to import from its suppliers in the US.
Starting on March 8th of this year, those American suppliers will be required to submit applications for export licenses in order to be able to ship anything to ZTE. What is worse is that Reuters’ sources believe that those licenses will most likely be denied. The reasoning behind it is that it might be some form of payback because the China based mobile manufacturer reportedly violated export rules and regulations by shipping American technology to Iran.
Back in 2012, it was reported that ZTE had inked various agreements in order to ship millions of dollars worth of hardware and software acquired from some of the best known tech companies based in the US (including Microsoft, IBM, Oracle, and Dell) to Telecommunication Co of Iran (TCI), considered the biggest telecommunications carrier in Iran, plus a certain unit of the consortium that controls TCI. At that time, the American tech companies involved have all stated that they did not have any knowledge regarding the Iranian contracts. Today, it has not been revealed if these firms still have business connections with ZTE.
In fairness to ZTE, the phone maker has since gone on record to say it has significantly reduced its dealings with Iran, which should allow it to escape even further punishment from the US Commerce Department. Washington DC has long tried to bar the sale of technology or products that are made in America to Iran, a country that is currently under US sanctions.
Be that as it may, the export restrictions will certainly not help ZTE, most particularly its growing smartphone division. Over the last few years, ZTE has been able to attract big names to its current roster of US suppliers, including familiar brands such as Microsoft, Intel, Qualcomm, and IBM, just to name a few. But with restrictions put in place by the US Commerce Department, the Chinese phone maker has no choice but to search for other alternative options if it can not acquire key smartphone components or mobile software from its American partner suppliers. Apart from ZTE, the restrictions will also affect a couple of its Chinese affiliates, namely ZTE Kangxun Telecommunications Ltd and Beijing 8-Star, as well as an Iran based company called ZTE Parsian.
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