The ongoing feud between USA and China seems to be heating up although it already had some serious financial consequences. At the beginning of December, Canada authorities acted on the US warrant and arrested Meng Wanzhou a senior executive from Huawei and daughter of the company’s founder. This has made the ill-environment created by the previous move to ban Chinese phone companies from the US even worse. And although Meng Wanzhou is accused of fraud, the Chinese government and people consider this another try from the US to tarnish the country’s image and destroy its smartphone industry.
Currently, phone companies are engaged in the race to bring 5G technology to the market. The one who does it first will certainly garner more profit, and top players like Apple and Huawei are desperate to come out victorious from this race. Not to mention that Meng is a highly distinguished and respected member of the community in China and people took her detention very personal.
Not long ago after this incident, Chinese organizations and companies started showing their support for Huawei. They asked their employees to buy only phones made by Huawei and to stop using Apple products. Some even went as far as to offer to buy their personnel Huawei phones in full or participate in some percent in the purchase. Reportedly, Chinese companies even threaten their employees with the termination of their work status if they use Apple devices, while others intend to downsize workers’ salaries for the price of an iPhone and withhold bonuses. In Henan Province, a brewing company even offered free alcohol to everyone who bought a Huawei phone, while Shenzhen Yidaheng Technology intends to fine employees who purchased or plan to buy an iPhone.
“The US aims to contain China’s rise… I believe we Chinese people should stand united and support our national products,” said National Chamber of Commerce in Shanghai in mid-December.
This whole conflict started long before Meng’s arrest with the US government stating that Chinese phones are used to spy on the citizens and companies like AT&T and Verizon terminating their deals with companies from China. U.S. Commerce Department even issued an Export Ban on ZTE which almost destroyed the company. In turn, China decided to boycott Apple products which affected Apple’s revenue quite a bit, which is apparent in the fact that Huawei took second place from the company as the top global manufacturer of smartphones. Namely the Huawei sold over 200 million phones in 2018, which is more than 50 million more than in the previous year.
On the other hand, US authorities say that Meng was detained due to breaking US sanctions on Iran, as well as that Huawei is engaged into potential cyberespionage against the West. Allegedly, Meng claimed that Huawei has nothing to do with Skycom, a company from Hong Kong which sold US manufactured products to Iran.
But this is not the only hit Apple took. Just a few days ago Qualcomm won the court proceedings in Germany with a verdict banning the sale of all iPhone 7 and 8 models from the country due to the violation of the Qualcomm patent. In China, the courts ruled infringement of Qualcomm patents by Apple when it comes to app arrangement and photo editing.
“In Germany, Qualcomm is seeking a ban on some iPhones with chips from Intel Corp. The judge ruled that phones that contain a combination of chips from Intel and Apple supplier Qorvo Inc violated one of Qualcomm’s patents around so-called envelope tracking, a feature that helps mobile phones save battery power while sending and receiving wireless signals,” reported Reuters.
In the end, we will have to hope that this crisis won’t escalate even more and cause serious diplomatic issues between the two countries.