Huawei surpassed 200 million Android smartphone shipments in 2018, the company confirmed over the weekend, being quick to point out how the new milestone is exactly what it promised to achieve a year ago. The unprecedented figure includes both Huawei and Honor-branded handsets, with the latter being described as a significant contributor to the firm’s new internal shipment record, particularly thanks to the critically acclaimed Honor 10. The P20 and Mate 20 Android flagship lineups also sold remarkably well and are the other two major factors responsible for the historic success, a company spokesperson said.
But nobody feels like celebrating
While nearly every other handset manufacturer on the planet bar Samsung and Apple would be celebrating the new milestone, Huawei’s management currently doesn’t appear to be in the mood to indulge in festivities as the firm’s conflicts with Western governments — particularly the United States one — are presently reaching new heights and have even escalated into a full-blown diplomatic earlier this month. On December 1, Canadian authorities arrested Huawei Chief Financial Officer Meng Wanzhou on the behest of the U.S. Department of Justice, with stateside authorities suspecting the veteran executive of being personally involved in an illegal banking scheme that involved fraud and was organized with the intention of breaking the Commerce Department’s trade sanctions placed on Iran.
Ms. Meng, 46, is suspected of personally hiding Huawei’s ties to Skycom Tech, a Hong Kong company operating in Iran, with investigators believing the firm in question is actually a Huawei satellite. While it’s presently unclear whether the alleged conspiracy actually led to any trade embargoes being broken, the fraud itself is enough for Ms. Meng to face up to 30 years in federal prison, assuming Ottawa agrees to extradite her. The veteran CFO has been with the company since its startup days in 1993 and is one of three children of Huawei founder Ren Zhengfei, a former official of the People’s Liberation Army whose close ties with Beijing are among the main reasons Huawei continues to face distrust in the West. She’s currently under limited house arrest after a Vancouver court set her bail at the equivalent of $6.5 million, though it also ordered her passport to be taken, concluding she poses a flight risk.
Huawei hardly blameless
Even before Ms. Meng’s arrest, Huawei has been clashing with both the U.S. government and American companies for almost two decades, facing accusations of being a national security threat and a repeated perpetrator of large-scale trade secret theft. Even as the company has always been dismissing those allegations as baseless, it has a track record of being on the short end of the stick in many settlements concerning cases of trade secret theft, including those involving established technology firms such as Cisco Systems and Motorola. Last year, T-Mobile even won a lawsuit alleging Huawei engineers sketched and stole components of its secret mobile user experience testing robot “Tappy” during a routine visit to its Bellevue, Washington operations.
With the advent of 5G, Washington is now lobbying for its allies to drop Chinese telecom equipment, particularly solutions from state-owned ZTE and Huawei. While the latter is describing itself as an employee-owned company, its opaque shareholder voting structure and the fact that its stock can only be held by current employees often raised concerns in the West. Many members of the U.S. intelligence community previously warned that even if Huawei isn’t directly controlled by Beijing, China’s strict laws allow its communist government to easily compel the firm into yielding sensitive customer data or spying on its clients on behalf of the Far Eastern country, a notion that Huawei often dismissed as frivolous.
This January, Huawei was close to a large-scale return to the U.S. after agreeing a distribution partnership with AT&T, the second-largest wireless carrier in the country. The collaboration was meant to see AT&T carry the Mate 10 range of Android phablets but the telecom giant dropped the initiative mere hours before the thereof was meant to be officially announced at this year’s CES, having reportedly been pressured to do so by U.S. legislators and regulators who threatened it with scrapping its lucrative federal contracts if it proceeds with the idea of working with Huawei. The American government’s push against Huawei also yielded results in other segments over the course of this year; earlier this month, Deutsche Telekom agreed to drop all Huawei-made 5G technologies in order to have stateside regulators approve the proposed merger of its subsidiary T-Mobile and SoftBank’s Sprint. Back in late August, the Australian government indirectly banned its network gear by tightening the requirements for state telecom suppliers. South Korea, Japan, and Canada are presently understood to be pondering similar moves.
Huawei is now once again daring the Western governments to show any evidence of its products and services posing a spying risk but the global intelligence community remains adamant the crux of the issue isn’t what the company did or did not do in the past but what it could feasibly be forced to do by the Chinese government in the future, its ties to Beijing and a history of trade secret theft and corporate espionage accusations notwithstanding.
Consumer electronics ambitions still growing
Regardless of its issues in the U.S. and some other Western markets, Huawei’s ambitions in the consumer electronics segment keep growing, as does its commercial performance. Numerous company officials previously said the firm doesn’t need the U.S. to become the world’s largest smartphone vendor, even though a significant stateside presence would be preferable. The firm is presently the third-largest handset manufacturer by sales and shipments, behind Apple and Samsung, though it also trumped Apple’s performance in two consecutive quarters this year and appears to be close to overtaking it on an annual basis as well. Recent reports suggest Huawei is already working on a number of new wearables, smartphones, and flagship system-on-chip for mobile devices – the Kirin 985. Still, the current global political climate makes it unlikely that most of Huawei‘s products will be coming to the U.S. in 2019, so its Western ambitions will likely once again be stopping with Europe over the next twelve months.