Company / division: ZTE
This case has been going on for a long time, and is another example of the tensions between US and Chinese tech companies, in the wireless space in particular. Though this case has nothing to do with the concerns about back doors in wireless networks I mentioned in the context of Huawei yesterday, it highlights another concern: that Chinese tech companies have often been willing to sell technology to some of the world’s repressive regimes, and have often had to cover their tracks in order to do so. ZTE got caught doing this in Iran a few years back and the US has taken action over breach of sanctions, as ZTE was incorporating US components. The worst case scenario here was that ZTE would be banned from exporting any US technology to use in its own products, which would have included Qualcomm chips apart from other things and would likely have been devastating. It avoided that outcome, but still has to pay a fine equivalent to its last two years of profits, which is pretty bad by itself. None of this is likely to make US wireless carriers more likely to place Chinese smartphones on their premium shelf space.
The prevailing narrative around Android Wear – and it’s an accurate one – is that it’s flailing, and OEMs are largely backing away from it. ZTE offers a counterpoint here – it’s planning to launch a watch later in the year – but it’s the exception that proves the rule, as Roger’s piece here points out. I still think the best hope for Android Wear is really compelling first party hardware from Google, though that may also kill off what few OEM offerings remain.