Huawei is no stranger to the scrutiny that it has been facing in the US, for quite a few years now. But things really started to change for the Shenzhen-based smartphone maker this year. With AT&T and Verizon dropping deals to sell its Mate 10 Pro smartphone just days before CES – where Huawei was due to announce the fact that the phone would be available at both carriers. Instead, Huawei had to opt for announcing that the Mate 10 Pro would be available unlocked in the US for $799. The latest chapter in this saga is the fact that Best Buy is going to discontinue selling Huawei’s smartphones and other products.
In the grand scheme of things, Best Buy dropping Huawei’s products probably won’t affect Huawei’s sales numbers in the US, seeing as Amazon and Newegg are still selling its products – at least at the time of writing this. It’s likely that Amazon sells far more Huawei smartphones than Best Buy, though that is not confirmed, since those specific numbers are not made public by either the retailers or Huawei. But Best Buy was the only physical store that you could walk into and actually see a Huawei smartphone, so that could have a big affect on Huawei’s business in the US.
How Huawei got here
It all truly started back around 2011 when Huawei was looking to enter the US in earnest. The US Government – at the time, under President Obama’s leadership – was worried about Huawei using its devices to spy on its users. The White House opened an investigation, as well as a few other regulatory agencies, and found nothing. The White House’s investigation actually lasted around 18 months, and found no proof whatsoever of Huawei spying on its users with its smartphones. The spying allegations seemed to dissipate in recent years, until around 2016, when Huawei began looking to get back into the US again. However, it really gained steam in late 2017 and into 2018, under the Trump Administration.
As we mentioned before, AT&T and Verizon both pulled the plug on its deal with Huawei to sell its Mate 10 Pro smartphone ahead of CES – where the US availability was slated to be announced. Later on in January, a few reports came out that the US government was urging carriers to not only refrain from carrying Huawei smartphones, but also refrain from using their equipment for their 5G networks. Huawei doesn’t just build smartphones and tablets, it also builds network hardware, which is very commonly used in Asia and Europe, but you won’t find it here in the US.
The company’s CEO, Richard Yu, seemed to have gotten fed up with all the allegations of spying, and when talking to the BBC at Mobile World Congress in February, stated that its competitors are keeping Huawei out of the US. Stating that competitors (likely referring to Samsung and Apple, which have a stranglehold on the US market) are using the government to keep Huawei out of the US market. While Huawei’s public relations department was in damage control shortly after that interview, the entire company has since followed Yu’s words, and are also claiming that it’s competitors are keeping Huawei from entering the US.
Are competitors scared of Huawei entering the US?
Competitors should be scared of Huawei entering the US, but they shouldn’t be able to keep them from entering. Huawei builds quality smartphones, that can rival the best from Samsung and Apple, and is pushing the boundaries in the camera and battery departments. Huawei isn’t a small smartphone maker either, in fact it is the third largest, globally with 11% market share, sitting behind Apple and Samsung. So it’s definitely possible that both Apple and Samsung see Huawei as a competitor, but there is no proof that those two companies are using the government to keep Huawei out of the US. And it likely won’t be proven, unless a whistleblower comes out and says that is exactly what is happening here.
It is very possible that Samsung and Apple are using President Trump’s hatred towards Chinese companies to keep Huawei out of the US. The President recently signed an executive order keeping Broadcom from buying Qualcomm (even though Broadcom is technically a US company, though its’ second headquarters are now in Singapore, but are moving back to the US soon). Trump has also been keen on making sure Chinese companies are not able to start business in the US. So it’s very possible that Samsung and Apple are playing on Trump’s views on China to keep Huawei out. Especially since Huawei’s hardships really started when Trump took office in January 2017.
How can Huawei stay in the US?
After Best Buy opted to drop Huawei’s products in the US, other retailers could do the same, which could effectively keep Huawei out of the US. Now as long as the FCC approves Huawei’s smartphones to be sold in the US, Huawei won’t be officially leaving the market, but if its devices are only sold on Huawei and Honor’s websites, it’s going to be much harder to get a decent chunk of the market share in the US. Seeing as many people buy smartphones from retailers like Best Buy, Amazon, Newegg and B&H Photo, and even more buy from carriers – which is why Huawei had been trying to get carrier agreements in place.
It wouldn’t be too surprising to see Huawei pack up shop and head out of the US. Though, many are going to hope that Huawei does opt to stay, as it does make some incredible devices, and some that are even better than what Apple and Samsung both offer. Hopefully, Huawei is able to clear its name in these spying allegations, especially since many believe that Huawei is part-owned by the Chinese government, which is not true whatsoever. Huawei has quite a bit of work to do in the US market, if it really wants to succeed and challenge the heavyweights of Apple and Samsung.
Wrap Up
Huawei isn’t the only Chinese manufacturer that is having trouble in the US, ZTE is also having issues, and it’s business is essentially the same as Huawei. Where it also does network equipment, though it hasn’t been [reportedly] barred from carriers using its equipment for 5G networks. But it is appearing that any Chinese smartphone maker that wants to enter the US, there’s going to be some big hurdles for them to climb. And that includes Xiaomi who has been looking to get into the US market for quite some time now, and may jump in next year. Regulation should loosen up for these companies in the coming years – considering easing regulations is one of the things that President Trump campaigned on when running for President in 2016. But only time will tell.