ZTE largely halted its Android smartphone sales in China following the beginning of yet another dispute with the United States, with its online storefront at Tmall now only redirecting visitors to an image of rowers with a caption that translates to “Youth is a time for fighting.” The company’s own website is nearly out of stock, whereas its JD.com outlet remains the only one that still appears to be selling its mobile devices in China unrestricted. The development is in line with initial predictions about the outcome of the latest U.S. sanction imposed on ZTE last month, with many industry analysts claiming the company has effectively no hope of keeping the majority of its smartphone unit operational in the near term without being able to purchase Snapdragon chips from San Diego-based Qualcomm.
The U.S. Commerce Department banned ZTE from buying and licensing any kind of American technologies over the next seven years, citing violations of their 2017 settlement that saw the firm plead guilty to a conspiracy to violate trade sanctions imposed on Iran. The development saw ZTE pay an $892 million fine, fire four officials, and agree to discipline 35 others, yet the firm failed in fulfilling that final part of the agreement. ZTE called the latest sanction “unacceptable” and unfair, suggesting its failure to fully comply with the settlement deal wasn’t an intentional act of defiance and was self-reported to Washington so it should have warranted a smaller punishment. The firm also alleged the move is related to the growing tensions between China and the U.S. over trade, a notion that American officials denied.
The Shenzhen-based company filed for a reprieve of the sanctions last week until its appeal is heard in an official capacity, with the Commerce Department being expected to respond to its request in the coming weeks. For the time being, ZTE is only able to continue manufacturing entry-level and mid-range phones with chips from Taiwanese MediaTek and is also facing the risk of being unable to continue licensing Google’s Android operating system once its existing agreement with the Alphabet-owned company runs out, which would effectively cripple the entirety of its mobile unit.
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