Huawei, who have been splashing the cash with consumer electronic retailers and mass media organisations in Australia during the past 12 months, in an attempt to get consumers to buy their P30 and P20 smartphones, that carriers such as Telstra in Australia and AT+T and Verizone in the USA have stopped selling because of security concerns, is today facing a new problem after the Trump administration ratcheted up attacks on the Chinese tech group.
Key to Huewei smartphones are components made by US Companies such as Qualcomm and Broadcomm and in the PC market software from Microsoft and processors from Intel.
This week two things have happened that could impact sales of Huewei products in Australia. The US Government has banned Huawei from selling technology into the American market.
They are also set to be prevented from buying US licensed components that are crucial for its production resulting in Huawei smartphones sold in the future in Australia using ‘inferior’ components when compared to a Samsung or Apple device.
US chipmaker Qualcomm, which earns around 5 per cent of its revenues from Huawei, saw its share price drop 4 per cent to close at $82.81 in New York last night.
The US Department of Commerce said it would put Huawei on its so-called Entity List, meaning that the American companies will have to obtain a licence from the US government to sell technology to Huawei.
US president Donald Trump also signed an executive order declaring the US telecoms sector faced a “national emergency” — giving the commerce department the power to “prohibit transactions posing an unacceptable risk” to national security.
This includes Huawei smartphones which the US Government see as a security risk which is why carriers such as Telstra have stopped selling Huawei made products.
Countries including Japan and Australia have banned Huawei — which is the frontrunner in building next-generation high-speed 5G networks around the world — and raised concerns that it could help the Chinese government conduct electronic espionage.
Don Vieira, a former top national security lawyer at the US justice department, said the moves suggested that the White House had given the intelligence agencies and commerce department a green light to “take on” Huawei.
“I don’t know if the US can destroy Huawei, but maybe the US government can get some concessions,” said Mr Vieira, a partner at the Skadden Arps law firm.
In Australia Huewei is collecting owner information via their handsets, they are telling consumers who have purchased one of their devices that the information is being stored on a Singapore based server. The only problem is that ther Singapore based servers can be easily accessed by Chinese based organisations and Huewi executives.
ChannelNews understands that despite the Chinese Company pouring millions of marketing dollars into the market and while also taking journalists on junkets around the world, they have still not been able to win over Australians with the bulk of their Australian sales coming from suburbs heavily populated by Asian nationals who are familiar with the Chinese brand.
The two most popular smartphone brands in Australia are Samsung and Apple. Also popular are Alcatel devices which have the major share of the below $500 market.
The move by the US Government is aimed at disrupting Huawei’s supply chain and to dent its ability to dominate the telco vendor ecosystem.
Last night the share value of many of the Companies who supply components to Huawei slumped.
