U.S. Congressional Report: Huawei and ZTE pose a threat to National Security

U.S. Congressional Report: Huawei and ZTE pose a threat to National Security
A draft report from the U.S.House of Representatives' Intelligence Committee suggests that Chinese handset makers Huawei and ZTE be banned from the U.S. market due to the Chinese government's influence on both companies. The report, based on 11 months of investigation, is expected to be released later today and says that both Huawei and ZTE pose a threat to the security of the United States.

Both firms are known for their low priced smartphones although each has been looking for ways to crack the high-end U.S. Market. ZTE in particular has been growing rapidly and according to Reuters, is now the world's fourth largest phone producer, planning on doubling shipments this year to 40 million units. ZTE ranks fifth in the sales of telecom equipment. Owned by its employees, Huawei is the second largest manufacturer of routers, switches and telecom equipment by revenue. It is the sixth largest mobile phone producer. In the U.S. mobile phone market market, ZTE and Huawei rank sixth and eighth respectively.

Both companies have been looking to expand in the states. Huawei gets 4% of its revenue from the U.S. while ZTE gets 2% to 3% of revenue from the states. The issue could make it difficult for Huawei to go public as it has been considering. ZTE shares are already listed for trading. The latter has released a letter it sent to the committee in September, disagreeing with the report's conclusion that it is influenced by the Chinese government. Huawei spokesman William Plummer issued a statement to Reuters denying the allegations.


Nomura Securities analyst Huang Leping said that the damage to both companies will be limited if the report focuses on telecom equipment, but would be damaging if it refers to handsets. Speaking of which, Huawei recently manufactured the latest myTouch and myTouch Q models for T-Mobile while the ZTE Athena is expected to be the world's thinnest smartphone at 6.2mm when it is eventually launched.

source: Reuters

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22 Comments

1. ajac09

Posts: 1482; Member since: Sep 30, 2009

wow..

22. PhoneLuver

Posts: 481; Member since: Jul 05, 2010

GheeZ! Why didn't they ban Apple that actually collected location data for years?!? Is there any proof that these Chinese companies have been involved in espionage of any kind?

2. InspectorGadget80 unregistered

Dont trust Chinese phones says the gov't. Didnt know Huawei was a chinese company.

3. OpTiMuS_BlAcK

Posts: 418; Member since: May 04, 2012

..but almost everything was made in China...

5. Cyan3boN

Posts: 446; Member since: Feb 23, 2012

u've got a point there.

12. jmoita2

Posts: 930; Member since: Dec 23, 2011

Yeah... Including 99% of all computers in the Pentagon and DoD.

20. Nadr1212

Posts: 741; Member since: Sep 22, 2012

NERD IS IN THE HA-OUSE!!!!

13. maxican16

Posts: 364; Member since: Sep 29, 2011

It's not their mobile products that pose the threat.. They're one of only a handful of companies that have the technology to build 4G networks. Sprint tried to contract them for that very thing.. the U.S. government stepped in and killed the deal. The reason being that any company inside of socialist China can be mandated by their government to do their bidding. Imagine all the data that gets passed over wireless networks. Now imagine all that data in the hands of the Chinese government. Scary.

4. Kronic

Posts: 321; Member since: Sep 11, 2012

That means you can't trust apple products!!!!! Lololololol

6. some1

Posts: 6; Member since: Sep 19, 2012

remember CarrierIQ recording every keystroke in your phone? US government is bunch of liars.

10. Gawain

Posts: 434; Member since: Apr 15, 2010

Remember how it was revealed that wasn't really the case?

7. f1r3z0r

Posts: 92; Member since: Nov 09, 2011

I think those companies are doing good by selling cheap phone and no expensive iPhone

14. maier9900

Posts: 272; Member since: Dec 17, 2011

I think those companies are doing good by selling cheap phone and no expensive Galaxy S3. douche.

8. ayephoner

Posts: 858; Member since: Jun 09, 2009

they covered this on 60 minutes last night. it was very interesting.

9. PilotHead

Posts: 18; Member since: Apr 26, 2009

Only further keeps me from selling their products. I've seen Huawei since it came to the states, and their products have been consistently garbage, along side ZTE which never made anything worth writing home about. But they're always at least $50-$100 cheaper than any nice Android in the market. Their biggest partners were always super cheap carriers (Metro PCS, Cricket, T-mobile), taking advantage of people who aren't the smartest shoppers by selling "awesome Androids for $50!" They've been a thorn on my side for so long due to the poor quality of their handsets. They've always cut corners such as horrible battery, dim displays, and cheap knockoff processors to get to those prices. I seriously hope this means I won't have to ever deal with their products again in the future.

11. Kan_wha

Posts: 88; Member since: Jun 25, 2012

Lol, you bought knockoff Huaweis to save a few bucks didnt you? My Ascend P1 has been ROCK SOLID and it outlasts my Galaxy Nexus in battery life

15. pikapowerize

Posts: 1869; Member since: May 03, 2012

yeah.. stop using chinese device! its ok to use chinese parts(we have no choice! its like 99% of parts are made in china) but dont buy their products!

16. FireDragon

Posts: 117; Member since: Nov 13, 2009

I believe it is China that help US to still stands on their feet.

17. phil2n

Posts: 519; Member since: Apr 30, 2012

God Created the world and the rest was made in China

18. pikapowerize

Posts: 1869; Member since: May 03, 2012

LOL!! that was hilarious!

19. snowman

Posts: 11; Member since: Oct 07, 2012

The US committee only 'advises' not to buy Huawei or ZTE's products. Why only 'advise' and not 'banned'? It kind of tells you that they don't have a particularly strong case to back up their accusations and it is in fact all down to politics, racism, protectionism and pampering to Cisco! Funny how they do not advise US citizens and firms not to buy Chinese made Apple iPhones and the countless number of other Chinese manufactured telecoms equipment.

21. Nadr1212

Posts: 741; Member since: Sep 22, 2012

I guess cricket is losing at LEAST 2 of their fones. What's even funnier i s that the only 2 "smart"phones I own are ZTE and Huawei made!!! LOL to the MAX :P

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