ZTE does not have the slightest chance of appearing on the American market. A few days ago, the US Secretary of Commerce imposed on ZTE a ban on exports of all products (hardware and software) manufactured or developed in the United States. This means that ZTE can no longer buy Qualcomm chipsets. The ban may also include the mobile operating system Android. Ban for all cooperation with the US will be valid for 7 years, i.e. until 2025.

Chinese producers do not have an easy life in the United States. All the major American operators have withdrawn from the sale of Huawei smartphones. The producer was also accused of being able to spy on US citizens using devices that create telecommunications infrastructure. Therefore, Huawei and ZTE will never build a 5G network in the United States. Now we are dealing with another action limiting the activities of the Chinese electronics manufacturer. ZTE was caught a few years ago breaking the ban on the export of telecommunications equipment to North Korea and Iran. However, the US has set an ultimatum for the Chinese company (it was about punishing workers who broke the embargo), but it has not been kept. That is why the Secretary of Commerce punished ZTE in a very acute way.

ZTE problems are also Qualcomm problems

ZTE sells around 45 million smartphones around the world and about 50% – 65% of them have Qualcomm processors. The American chipset maker earns an average of $25 on each smartphone sold. This means that the imposed on ZTE ban means an annual loss of 500 million dollars for Qualcomm. However, where one loses, the other gains. The ban on trade with the US means that ZTE will most likely establish close cooperation with MediaTek.

However, ZTE also has another problem. Ban imposed by the US includes not only hardware but also software. This means that the Chinese can no longer collaborate with Google, which is developing Android. Although the system is open source software, theoretically ZTE can still use the most popular mobile operating system in the world. However, the lack of cooperation with Google means the lack of a certificate that is needed to run the Play store and applications and services belonging to the giant of Mountain View. Does this mean that ZTE will have to say goodbye to the smartphone market? We do not know that yet.

Source: Reuters (1), (2)