It’s really hard to get a break in a new market. It’s doubly hard for a Chinese company trying to achieve competitive scale in the US market. Ask Huawei, 4th largest global manufacturer of mobile phones. They were poised to launch their first US distribution channel with AT&T when a funny thing happened: Red Scare Redux.
Surprisingly, Huawei had unveiled their continued business collaboration with Microsoft just a few months ago. No accusations of espionage resulted from that cooperative effort with an American computing icon. This is from their web announcement detailing the Memorandum of Understanding:
Huawei and Microsoft already enjoy a time-honored and deepening cooperation in the field of cloud computing as the HUAWEI CLOUD has provided Windows Server and RDS for SQL Server. In this new strategic cooperation, Huawei and Microsoft will bring more Microsoft enterprise-level products online… both companies will jointly carry out market expansion and marketing activities on schedule.
Why wasn’t the partnership with Microsoft dissolved, when only three months later AT&T would renege on their carrier distribution deal? If there is a danger to Americans then wouldn’t this partnership be just as threatening as the partnership with AT&T? Two factors come instantly to mind. The US government and Apple.
Huawei Trumped by Apple?
Everyone is surely aware of the many instances of Trump’s tough talk about the trade deficit with China. Trump also promised to bring back corporate tax dollars. According to an article on NBC news, Apple made a deal just last week to pay $38 billion in taxes on overseas cash, create 20k new jobs and open another campus. They are also going to increase the amount of their Advanced Manufacturing Fund. The current budget of the AMF is $1 billion it will change to $5 billion in order to create more stateside production. While this left Apple stock with a small 2 percent gain, it seems that this spending action was more quid pro quo. There are numerous reports of businesses getting on board the Trump train as the tax bill rolls out. It stands to reason that Apple may have been able to leverage their position with any number of government officials in order to limit competition.
Huawei is a direct competitor to Apple with its Mate series AI powered phones and has even made overt snubs to Apple for their AI efforts and face ID. It shouldn’t be too hard to make the simple inference that the rumors of espionage are only lip service. Huawei has been selling feature phones and cheaper versions of its Android phones for years. Their best selling US device, the Nexus 6p, was Google’s last in the Nexus lineup. No concern over espionage with that device. I guess Huawei just became an Enemy of the State because they dared to threaten the Apple Hegemony.