Smartphone makers Oppo and Huawei denied reports they are discussing an acquisition of struggling domestic rival ZTE’s device business, after the company this week announced its major operating activities had ceased following US sanctions.
Global Times reported ZTE was considering offloading its smartphone business after its operations were brought to an abrupt halt by the implementation of a seven-year ban on shipments of components and software to the vendor by the US Department of Commerce in April.
While the news outlet noted ZTE is yet to make a firm decision regarding a sale, Xiang Ligang, CEO of telecom website CCtime, said the vendor may have no choice but to split, and sell off, its businesses if attempts to overturn the ban fail.
Xiang explained ZTE is still valuable because it holds patents, technologies and distribution channels, adding that earlier in the year he spoke to ZTE CEO of Mobile Devices Cheng Lixin, who talked about doubling sales in its domestic market, China.
In its announcement regarding the cessation of its major operations, ZTE said it is still working to find a resolution to the ban, which was imposed after the Department of Commerce ruled it made false statements during an investigation into violations of trade sanctions with Iran.
Australia-based operator Telstra appears to be taking no chances, announcing it plans to pull 19 ZTE smartphones and three other devices from its shelves as a result of the US decision.