China's ZTE says main business operations have ceased due to US ban

[Hamartia Antidote]

https://www.cnbc.com/2018/05/09/chi...ess-operations-have-ceased-due-to-us-ban.html

ZTE's main business operations have ceased due to a ban imposed by the U.S. government, but the Chinese firm is trying to have the ban modified or reversed, it said in exchange filings late on Wednesday.

ZTE last month was hit with a ban from Washington forbidding U.S. companies to supply it with components and technology after it was found to have violated U.S. export restrictions.

"As a result of the Denial Order, the major operating activities of the Company have ceased," ZTE said in the filing.


"As of now, the Company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations," it said.

It said it is actively communicating with the U.S. government "in order to facilitate the modification or reversal of the Denial Order by the U.S. government and forge a positive outcome in the development of matters."

 

[somebozo]

This represents the power of USA and might have help tame china for support over North Korea

 

[Hamartia Antidote]

https://www.forbes.com/sites/jeanba...huts-down-after-u-s-tech-ban-over-iran-sales/

Analyst: China's ZTE Shuts Down After U.S. Tech Ban Over Iran Sales

ZTE announced today that it ceased “major operating activities”, including factories, after the Trump administration banned U.S. companies to sell it technologies, including hardware and software components for 7 years. (Photo by VCG via Getty Images)

This is the beginning of the end for China's second largest telecommunications equipment maker, after market leader Huawei.

ZTE declared on Wednesday that it ceased “major operating activities”, including factories, after the Trump administration banned U.S. companies to sell it technologies, including hardware and software components.

The Shenzhen-based company's latest statement confirms Atherton Research's initial report, published last month, that ZTE will ultimately shut down as most of its products use American technologies, from high-end 5G equipment to low-end Android smartphones, and that it will be close to impossible for ZTE to redesign new products around the U.S. tech ban.

The Chinese firm does business in more than 160 countries with over 74,000 employees and annual revenues of $17 billion last year, generating more than $700 million in net profits.

Atherton Research Viewpoint

We believe that the Trump administration will use the ZTE case as an example and will not roll back the technology ban unless it can extract out of the Chinese government some extraordinary trade concessions.

ZTE's death is a great opportunity - if not a lifeline - for Ericsson and Nokia as they're one of the few companies to make the kind of carrier-grade equipment that large telecom operators, like AT&T, Verizon or T-Mobile, need to run their networks.

As the world's largest telecom equipment manufacturer, Huawei could also greatly benefit from the closure of its hometown competitor if it wasn't for the ongoing U.S. criminal investigation it's under, for possible violations of U.S. export sanctions related to Iran sales, which represents a huge clout on its future business.

Just like ZTE, Huawei's products rely heavily on American technologies. And if a similar ban is applied to Huawei, its survival will also be at stake.

On the smartphone side, HMD (which sells smartphones under the Nokia brand), Lenovo/Motorola and at a lesser extent Samsung and LG, will benefit from ZTE's exit of the U.S. market where it's the 4th largest smartphone brand with a 10% market share, according to Counterpoint Research.

In 2018, ZTE hoped to expand its smartphone business, which also includes the Nubia brand, globally (China, Europe, Americas, Africa, Middle-East), but this, unfortunately for the thousands of the company's employees, will not happen.

 

[Jugger]

Feeling really sad for ZTE telecom.
I hope they find a way out of this mess.