ZTE faces bleak future after U.S. ban prevents it from making phones

ZTE faces bleak future after U.S. ban prevents it from making phones

ZTE faces bleak future after U.S. ban prevents it from making phones

ZTE Corp, China's biggest publicly traded telecommunications equipment provider, has halted sales of its consumer products and related services after the U.S. government last month banned the sale of American technology to the company.

The Chinese OEM said in its exchange filings that their major operating activities have been halted after the enforcement of the Denial Order.

The ban on United States companies selling device components and software to the Chinese firm took place as Washington and Beijing gear up for a potential trade war. Analysts predict it will be hard for ZTE to stay competitive without supply of components from American suppliers. "The organization and related parties are actively communicating with all the appropriate USA government departments in order to ease the modification or adjustment of the Denial Order from the united states administration and forge a beneficial outcome in the maturation of the topics". USA officials have said the decision of the BIS to impose the ban against ZTE was not related to trade policy, according to Chinese press reports.

Telstra's Michele Garra - the company's head of innovation, product innovation and strategy in the telco's consumer business - said the decision was a product of a new prohibition on USA companies selling device components and software to ZTE that has led to the company halting operations.

ZTE said that the U.S ban was unfair and threatens its survival.

This followed the revelation that ZTE had flouted a U.S. order by shipping US-made components to Iran and North Korea in 2017. The Chinese government is said to have raised the issue of ZTE last week with a visiting USA trade delegation.

In attempt to find the now missing components that were supplied by American companies such as Qualcomm Inc. and Intel Corp., ZTE is turning to Taiwan-based chipmaker Mediatek Inc.

Earlier this week China pleaded with the United States to amend the seven year ban during talks in Beijing between senior officials from both countries who are close to a trade war.

It looks like the sanctions that the US government has placed on ZTE may be the beginning of the end, at least for their main business operations. A ZTE employee also mentioned that employees are reporting to work as usual, but "with not much to do".

ZTE noted that it maintains "sufficient cash" to keep its commercial operations up and running for now, but at the time of writing the firm's online stores are showing as "under construction". ZTE said on Sunday it had submitted a request to the U.S. Commerce Department for the suspension of the ban.

From what we can tell in the crowd support link above that current users of Telstra/ZTE devices can continue to use these devices and that safety has not been compromised nor will it be.

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