Best Buy Cuts Off Huawei’s Access to US Smartphone Market

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Originally set to hit the U.S. market with the tagline, “The best mobile phone you’ve never heard of,” Huawei’s new flagship smartphone — the Mate 10 — may likely be one that U.S. consumers will never be able to buy. Citing a person “familiar with the situation,” CNET reported yesterday that Best Buy will stop selling the Chinese company’s devices over the next few weeks.

That decision marks the latest blow to efforts by Huawei, currently the world’s third-largest smartphone vendor, to establish a foothold in the U.S. The company had planned to announce the arrival of the Mate 10 in the U.S. earlier this year, but saw those hopes dashed by a last-minute pullout by AT&T in January. Verizon followed suit a few days later.

Best Buy’s decision comes amid growing suspicion of China-based technology companies by U.S. trade and intelligence officials. Under President Donald Trump’s “America First” strategy, the U.S. has announced tariffs on imported steel and aluminum, and has blocked two recent corporate deals involving Asian companies on the grounds of national security.

‘Security Threat to the U.S.’

Despite its number three spot in the global smartphone market and numerous accolades for its other wireless technologies, Huawei has faced U.S. scrutiny over the trustworthiness of its devices. In 2012, for example, the U.S. House Permanent Select Committee on Intelligence concluded in an investigation that government technology systems shouldn’t use components from Huawei and ZTE, another Chinese company.

“Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems,” the committee report stated. Under a proposal made by Republicans last month, the U.S. government would be prohibited from buying or leasing equipment from Huawei or ZTE.

Meanwhile, Best Buy’s decision represents a major hit to Huawei’s ambitions for the U.S. consumer market. “Best Buy was one of Huawei’s biggest retail partners, and one of the rare places you could see its unlocked smartphones in person,” CNET reported. “Huawei’s Android-powered phones aren’t sold by any US carriers, which is how a majority of Americans typically buy their phones.”

White House Targets ‘Economic Aggression’

During a Mobile World Congress event in Barcelona late last month, Richard Yu, CEO of Huawei’s consumer business, blamed AT&T’s and Verizon’s decisions on competitors playing politics. He added that those decisions ultimately hurt U.S. consumers by reducing their choices.

In statements to both CNET and Reuters, Huawei declined to comment on the specifics of Best Buy’s decision to stop carrying its phones. However, the company has clearly anticipated such developments. In a white paper on “Trade Rules and the Digital Economy” Huawei published late last year, the company said that while national security concerns are important, they shouldn’t be used to justify “protectionist” measures.

“We live in a world today where both the public at large as well as governments have become increasingly aware of not only the benefits of a better connected world, but also the risks that greater interconnectivity brings with it,” the Huawei report stated. “As such, governments are legitimately starting to take a broader and deeper view of what constitutes critical national infrastructure and are becoming increasingly vigilant against potential cybersecurity threats. Be this as it may, we believe that the national security exception cannot be used as a blank check to justify measures that are essentially protectionist in intent and nature.”

More details about the White House’s planned tariffs were expected to emerge today, with the president set to sign a memorandum on China’s “economic aggression.”

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