Huawei could be the first big casualty of China’s clash with America



Sherisse Pham | CNN Business

Hong Kong (CNN Business)In little over 30 years, Huawei has gone from scrappy startup to China’s most successful global consumer brand. Now it could become the first big casualty of an escalating fight with America over trade and the future of technology

Huawei’s smartphones are more popular than Apple’s (AAPL) iPhone, and sales have been growing faster than Samsung (SSNLF). The company was aiming to become the world’s biggest smartphone brand by next year, and lead the global rollout of next generation super-fast 5G wireless networks.
Then President Donald Trump slapped it with a US export ban, barring American companies from selling components and software to Huawei without first obtaining a license. The ban has already led Google (GOOGL) to block new Huawei devices from licensing its Android operating system, as well as popular apps and services. (Existing phones will be exempt, for now.)
Huawei insists its business can withstand the crisis, reminding customers of the company’s history as a fighter that will do whatever it takes to survive.
“The current practice of American politicians underestimates our strength,” Huawei founder and CEO Ren Zhengfei said in an interview with state broadcaster CCTV on Tuesday.
The United States and China have been embroiled in a bitter trade war for more than a year, and Huawei could serve as an enormous bargaining chip to force Beijing’s hand. Huawei has built up a dominant position in 5G, technology that is critical to future services the United States wants to lead.
Ren, a former engineer in the Chinese army, said that despite the conflict, the company ultimately needs to work with the United States to be successful.
“We sacrifice ourselves and families for our ideals,” he said. “We clash with the US at the highest level, but ultimately have to contribute to humankind together.”

The road to smartphone dominance

Huawei has come a long way from its inception as a supplier of cheap telephone switches in the 1980s. The company said it saw the potential of cell phones in the 1990s, when millions of rural Chinese started migrating to cities in search of work at factories. It caught the wave of the smartphone revolution in the 2000s, when it started making phones for European carriers Vodafone (VOD) and 3. 
Today, Huawei is the world’s No. 2 smartphone maker. Its phones are often lauded for their high-end features and cameras and relatively cheap price tags.
Huawei overtook Apple in 2018 and has been nipping at Samsung’s heels. Samsung shipped roughly 72 million phones in the first three months of this year, compared with Huawei’s 59 million and Apple’s 40 million, according to research firm Canalys. That translated into 17% of the global market for Huawei, according to research firm Counterpoint, behind Samsung on 21% but ahead of Apple on 12%.
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