ZTE wasn’t kidding around when it suggested that a U.S. Department of Commerce order would “severely impact” its survival. It’s hard to image a successful path around the seven-year ban on the sale of U.S. products to the company imposed after it reportedly failed to sufficiently reprimand staff for flouting Iranian sanctions.
Earlier today, in fact, the Chinese smartphone/telecom manufacturer announced that it had ceased its main business operations as it attempts to figure out the best way forward.
“As a result of the Denial Order, the major operating activities of the company have ceased,” the company wrote in an exchange filing spotted by Reuters. “As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations.”
The company has been scrambling since the ban, reportedly meeting with Google to determine if there’s some workaround to what might effectively end its use of Android and Play services. Non-U.S. players like Taiwanese chip maker MediaTek have been stepping up in the meantime, but even with that support, it’s tough to imagine ZTE efficiently rallying.
The Chinese government has also been said to be negotiating with the U.S. on the company’s behalf, in hopes of stemming what is looking more and more like a looming trade war between the two countries. The D.O.C. has reportedly opened up a similar inquiry into fellow Chinese smartphone maker, Huawei.
ZTE also told Reuters that it’s been in touch 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.”
We’ve reached out to ZTE for further comment on the matter. We’ll update accordingly.