Tuesday , October 23 2018 Ausdroid » News » US bans sales to ZTE – future with Android uncertain according to report


The future of ZTE as an Android phone maker is in flux at the moment, with the company facing a ban on purchasing components from US companies after they admitted to violating sanctions against both Iran and North Korea.

The ban on ZTE being able to purchase goods from US manufacturers for 7 years is coupled with a criminal fine and forfeiture totalling approximately $1.19 billion USD, was outlined in a US Department of Commerce order. The ban affects ZTE’s ability to purchase goods from US manufacturers including Intel, Qualcomm and possibly even the free Android operating system.

The ban and fine was put in place after a 5-year investigation found that ZTE had circumvented embargoes on shipping US-made components into both Iran and North Korea using a series of shell companies. According to reports, ZTE has plead guilty to circumventing the embargoes, and as a result they will be banned from purchasing components from US manufacturers for 7 years.

The wording of the ban states that ZTE cannot ‘participate in any way in any transaction involving any commodity, software or technology… exported or to be exported from the United States.’ which would technically include the ability to license Android from Google, a US-company.

According to a report from Bloomberg, ‘ZTE lawyers have been meeting with Google officials about the issue, according to the person. They asked not to be identified talking about private discussions. Google and ZTE declined to comment’.

ZTE has a lot of business invested in Android both in their Blade and Axon series phones, as well as their white-label business creating branded phones for companies including Telstra and Boost Mobile in Australia.

ZTE could conceivably do a lot with other component makers including Mediatek in terms of processors for their mobile division, however the loss of a license to use Android could be catastrophic. Very few mobile OS options exist these days with Microsoft killing off Windows Mobile, iOS is of course a closed system, WebOS is now a SmartTV platform, Firefox OS is now dead and Samsung’s Tizen mobile OS has gained very little traction.

In terms of business, trading in ZTE shares was suspended in Hong Kong soon after the announcement of the ban yesterday.

We’ve reached out to ZTE Australia regarding the issues and future of ZTE devices but haven’t heard anything back at this stage.

Via: Bloomberg.

Daniel Tyson   Ausdroid's Editor in Chief

Dan is a die-hard Android fan. Some might even call him a lunatic. He's been an Android user since Android was a thing, and if there's a phone that's run Android, chances are he owns it (his Nexus collection is second-to-none) or has used it.

Dan's dedication to Ausdroid is without question, and he has represented us at some of the biggest international events in our industry including Google I/O, Mobile World Congress, CES and IFA.

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Observations

Google has got to be pissed off at this, it could encourage other mobile platforms to be developed. Something like this is the kind of change that brings around competition.

gregoryopera
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gregoryopera

Android is Open Source – which means that anyone (including other Ausdroid readers) can access, modify, distribute and build their own Android operating system, because the code that “makes” Android is owned by the Community. ONLY the Google Mobile Services (GMS) is owned by Alphabet (Google’s parent company) – that’s all the “Google” bits in Android, such as GMail, YouTube and the Play Store… Under these new restrictions, Alphabet would be unable to continue to licence the GMS to ZTE – but the Android operating system itself is still able to be used. It’s also worth pointing out that the… Read more »

Yianni
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Yianni

I guess we’ll be seeing them pull out of the US straight away even if they come up with a way to continue to make phones.

I wonder if ZTE could employ a one click user initiated solution upon first boot to pull down Google Services/Google Apps without actually having them installed on the device from factory.

Obviously running open source Android and using SoC’s from MediaTek and others shouldn’t be a problem outside of the US.

Cheers

Darren
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Darren

Google owns the rights to the Android trademark. And you are not going to have a good time selling a phone that has no Google services either.

Not to mention all the tech that they are no longer able to use. They are going to have to change their whole supply chain. They won’t care about Android if they don’t have a phone to put it on first.

gregoryopera
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gregoryopera

Whilst I’m not familar with the technicalities of the Android trademark, I DO know that there are plenty of Chinese manufacturers selling “Android” tablets in mainstream stores (such as Target, Australia Post and Officeworks) – but without the Google Mobile Services… So clearly it can’t be too much of an issue. Amazon also advertises that Fire OS is based off Android, and the Android Open Source Project (commonly referred to as just the “AOSP”) also uses the name Android, yet again proving that this point is probably trivial at best. As for the difficulty, it’s not too hard… A quick… Read more »

Darren
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Darren

Good point on the Android name being used. I was not aware of those rubbish chinese tablets not coming with GMS as I have never touched them. I would be somewhat pissed if I bought one for a child of whatever and found I could not get apps for it and was not a technical person.
To the average consumer Android=Google=Google Play Store
or simpler Android=Apps

gregoryopera
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gregoryopera

I’m not saying it’s the ideal alternative and I do sincerely think this will hurt their sales somewhat, I’m just pointing out that it’s not necessarily the end of their Android usage – as most news outlets are claiming. As for those Chinese ultra-cheap things, yep stay away from them – I bought one (a Pendo) about a year ago and when maleware starting automatically popping-up, I did a bit of digging… It turns out there were pre-installing it at a root level (that’s built-in to the firmware, for you non-techy folks) – what’s more, my research showed that this… Read more »

Tibb So
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Tibb So

If ZTE can’t access Android for future phones then surely Huawei and other Chinese brands can’t be far behind.

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