ZTE’s handset business is facing troubles, as it was mooted a US ban on the export of technology to the company could impact its Android device activities.
The US Department of Commerce took action this week, stating the Chinese equipment vendor made false statements related to senior employee disciplinary action it said it would take following an earlier investigation into the sale of telecoms equipment to Iran and North Korea.
While it was immediately obvious that ZTE’s relationship with Qualcomm would be impacted (ZTE offers Qualcomm-powered devices), there are alternative options open to the company. But the exclusion order also includes software, meaning the company may not be able to licence Android-related technology from Google.
A “source familiar with the matter” said Google and ZTE have been discussing the issue, but the impact is still unclear.
While Google released a chunk of the Android code as open source, and a number of key Android applications remain proprietary, if ZTE is unable to do deals with the search giant, it may find itself unable to access such key technology as the Play app and content store. This would make its smartphones less appealing than rival products.
There have been projects to offer Google-free Android platforms in the past, for example Cyanogen OS, but these have not come to fruition. ZTE could certainly work to build its own non-Google variant of Android, but doing it without US tech partners would be something of a feat.
And while there are alternative platforms available, these would not allow ZTE to deal with the core problem of providing access to a compelling content catalogue.
There is also the issue that the US is a significant market for ZTE’s smartphones, where it is particularly successful in the no-contract/prepaid segment.