The Washington PostDemocracy Dies in Darkness

Huawei is in the crosshairs of the Trump administration. So why do so few Americans know about the smartphone giant?

Huawei's P30 smartphone, which sells for about $575. (Marlene Awaad/Bloomberg News)

Brittney Jones is something of a rarity among U.S. smartphone users. She prefers Huawei.

She is part of such a small group that the 27-year-old Olympia, Wash., resident says she has never met another Huawei owner, save for the man she bought the handset from for $800 in cash last year after seeing a listing on Craigslist.

Jones bought the device because of its superior front-facing camera, perfect for taking selfies, she said. “I didn’t really care what the name was,” said Jones, a student, who researched the phone online. “It’s not fair that we don’t have access to the best technologies in the U.S. I should be able to just go to the store and buy the best phone out there.”

Huawei — pronounced “hwa-way” — commands a measly 0.03 percent of the U.S. market for handset sales, according to Gartner, and is available primarily on Amazon. But abroad it is a giant and, until a kerfuffle with the Trump administration this month, was on a clear path to overtake Apple as the second-largest seller of mobile phones in the world for the year.

U.S. blacklisting of Huawei prompts global firms to follow suit

“They are as good or even better than Samsung, but for a lower price,” said Roger Entner, an analyst for Recon Analytics. Its phones — such as the P30 Pro, available to Americans for about $900 on Amazon — have won generally positive reviews. Like Samsung, Huawei phones run on Google’s Android operating software.

Huawei’s microscopic U.S. market share — far behind Apple, Samsung and LG — is due largely to a roughly decade-long spat with the U.S. government over a laundry list of allegations straight out of a James Bond film: espionage, trade violations and intellectual property theft. Huawei booked about $105 billion in sales last year, up 20 percent from a year earlier, with nearly half of that coming from its consumer business, which includes smartphones. The rest of its revenue comes from other divisions selling 5G network equipment, as well as services such as cloud computing. By comparison, Boeing posted $101 billion in sales in 2018.

U.S. officials believe that Huawei maintains close ties to the Chinese government, and as a result, have tried to keep the company at bay. The company says it is owned entirely by employees and has steadfastly denied the U.S. allegations, to little effect. Huawei didn’t immediately respond to requests for comment.

A 2012 congressional report contended Huawei’s telecom equipment, including gear essential for deploying 5G networks, posed a national security threat. As a result, U.S. carriers such as AT&T and Verizon haven’t offered Huawei’s mobile phones for sale. Other companies have also taken action against Huawei: As long ago as 2003, Silicon Valley firm Cisco sued the Shenzen-based company over claims that Huawei stole software code for routers and network switches.

Meanwhile, the United States has sought the extradition from Canada of Huawei’s chief financial officer, who happens to be the daughter of the company’s founder, over fraud charges.

The dispute with the United States reached a boiling point this month when the Trump administration said it would ban U.S. firms from providing components or services to Huawei, effectively preventing it from manufacturing phones or other equipment. Google said complying with the ban would mean future phones sold by Huawei would be without a license for its Android operating software and would have no access to its Play app store, which would render them nearly useless.

A similar sanction last year on Chinese firm ZTE, over alleged trade violations, crippled it and forced it to accept a $1 billion fine, among other penalties. The device-maker’s U.S. smartphone market share has crumbled in recent years, analysts say, representing a tiny fraction of that of leaders Apple and Samsung.

A few years ago, Huawei was ascendant in the United States, gaining market share by offering handsets to lower-income customers on prepaid plans. It sponsored a 2013 U.S. tour by teen heartthrobs the Jonas Brothers, with executives spinning up plans to be “a leading smartphone brand.”

That has largely come true — just not in the United States, the world’s third largest smartphone market after China and India. In this year’s first three months, Huawei sold 59.1 million smartphones globally and had a 19 percent market share, up from 12 percent a year earlier, making it the second-largest brand, ahead of Apple and behind Samsung’s 23 percent, according to IDC data. As recently as last year’s fourth quarter, Apple held the second spot by market share. Huawei’s increase was all the more notable because industry-wide growth in smartphone sales has declined for six straight quarters, IDC said.

Because of the U.S. ban on American companies supplying to Huawei — which could take effect in August after a 90-day reprieve — subsequent Huawei devices are likely to be without popular Google apps such as Gmail and YouTube. Huawei would have to seek out publicly available versions of the Android operating software, rather than getting them directly from Google.

Existing Huawei customers will continue to be able to download the latest versions of Google apps, the U.S. search engine company said.

Huawei has said it can deploy mobile operating software it has been developing on its own, if it needs to. Chief executive Ren Zhengfei struck a defiant tone on Chinese state television this week, saying the 90-day reprieve was of little value.

Meanwhile, Silicon Valley firms could face skimpier sales of routers, computer chips and other components they typically ship to Huawei, which spent $11 billion buying from U.S. companies out of its roughly $70 billion budget last year.

Microsoft, which had offered Huawei laptops on its website, recently pulled them, according to reports.

Firms such as Qualcomm and Intel, as well as smaller companies supplying Huawei with components, have seen their shares slip in recent days.

Jones, the U.S. Huawei fan, expressed concern her P20 Pro smartphone would falter amid the international dispute. “I can’t live without my phone,” she said. “I absolutely love it.”