Huawei is the largest multinational tech company based out of Shenzhen, China. Apart from selling smartphones and other consumer electronics, it also one of the leading telecommunications equipment provider in the world. The company which was recently banned by the U.S. government cannot do any business with US-based companies. However, the ban is now delayed by 90 days to provide support for existing handsets and network components in the U.S.
The U.S. lawmakers raised concerns over the Chinese telecommunications equipment provider long back in 2012. Till date, no one even knows who exactly owns the company, though the company claims it is owned by its own employees. With Trump’s executive order, Huawei might not only lose the U.S. market, but its existence in most other markets also became questionable. Now, let’s talk about the several shreds of evidence which might help you in better understanding of the company’s current situation.
In 2007, the FBI arrested Motorola engineer Hanjuan Jin who was found with $30,000 in cash, a bag full of classified Motorola documents, and a one-way ticket to Beijing. The investigation revealed that the engineer was not only with Motorola but also with another company called Lemko. Lemko was founded by Shaowei Pan who worked for Motorola for almost 10 years. It was started just after his meeting with the Huawei founder Ren Zhengfei and other top executives of the company.
According to the documents provided to the court, the Lemko’s goal was to build Motorola’s like wireless technology for Huawei. Shaowei Pan even emailed Ren Zhengfei saying, “If our plan can progress smoothly, Lemko will be the company we are planning to establish, and it will be independent of Motorola Inc.” While the case was later settled on confidential terms, Hanjuan Jin was sentenced for four years in prison.
Akhan Semiconductor Inc is a small U.S. company owned by the young entrepreneur Adam Khan. The company developed the Miraj Diamond Glass which is 6 times stronger and 10 times more scratch-resistant than Gorilla Glass. He saw Huawei as a potential customer and in order to license his technology, Khan sent the prototype to Huawei’s laboratory in San Diego. Later, Huawei returned back the glass and it was actually found to be completely damaged.
When Adam Khan’s company and FBI conducted the sting operation, the Huawei representatives admitted on tape for breaking the contract with Akhan Semiconductor Inc and thus violating the U.S. export-control laws.
According to PanOptis, the company has sent its executives on its own expense to Shenzhen to discuss licensing arrangements with Huawei for its patents. Huawei declined to license the PanOptis’s patents, which are used by smartphones to receive and display video. However, the Chinese company went and incorporated the technology in all its smartphones. When the PanOptis filed the patent infringement case in Texas, the court has ordered Huawei to pay the hefty sum of $10.56 million for willful patent infringement.
Last year, Huawei also entered the solar power market with its own solar inverters. A small Israeli company called SolarEdge filed a lawsuit against Huawei accusing it of patent infringement and intellectual property theft. The Chinese company is said to have followed the same tricks as it did in the networking business. Huawei later came out publicly denying these accusations and the decision is still pending in the court.
In the early 2000s, the US-based Cisco Systems has accused Huawei of I.P. infringement. It even accused the Chinese company of stealing the software code of its routers. While the lawsuit was filed in 2003, it was later settled confidentially without revealing any details.
Huawei is also accused of stealing a robot from the testing lab of one of the largest carriers in the U.S. According to the details provided by T-Mobile, a Huawei employee walked out from the T-Mobile testing lab along with the proprietary robot called Tappy in his laptop bag. The Tappy was designed to catch the flaws in new smartphones before they were put on sale. Along with T-Mobile, it was also opened for few other smartphone manufacturers to test their products but under strict non-disclosure agreements.
At first, Huawei forced its employees to collect more details about this robot. With the kind of questions asked by Huawei employees, T-Mobile even threatened to ban Huawei employees from entering its testing lab. When T-Mobile came to know that the Huawei employees were taking unauthorized photographs, they banned the whole group of Huawei employees but allowed only one to test the products that were slated to release through its network. Then a Chinese Huawei employee flew to the U.S. and carried the testing robot out of the testing lab.
According to the reports, we got the complete analysis of the functionality of the robot and even captured several photographs for the exact measurements of the parts. Next day, the same employee returned back the robot saying he accidentally took the robot to his home. After all these incidents, T-Mobile has banned all Huawei personnel from its lab. The investigation also revealed that Huawei even offered rewards to the employees who stole confidential information from the competitors.
Huawei is also the reason for the demise of Nortel Networks, one of the successful Canadian companies. In 2000, the Chinese hackers got the passwords of Nortel’s CEO and several other top executives. With the access of crucial people, the hackers then downloaded massive amounts of data including the proprietary I.P. Huawei which is the vendor for Nortel Networks later became its competitor. Huawei with no investments in R&D offered services at a lower price and made Nortel exit from the market.
The report came out earlier this year revealed Huawei even tried to steal Apple trade secrets. In order to get the details of Apple’s component production, Huawei frequently used to lure Apple’s manufacturers and suppliers with promises of big orders. In one example, Huawei engineers met one of the Apple suppliers and told their smartwatch design was similar to Apple Watch but never shared any schematics. Then, they asked the supplier to give an estimated cost of the components in order to get a better understanding of Apple’s cost structures.
Vodafone recently came out saying they had found vulnerabilities in Huawei’s equipment back in 2011. The equipment was then provided to Vodafone Italy and it included hidden backdoors that can give unauthorized access of the Vodafone’s fixed-line network to China-based Huawei. The fixed-line network provides internet service to millions of homes and businesses. Even though Huawei later said to have fixed the vulnerabilities, Vodafone also found backdoors in some parts. Now in 2019, Vodafone paused using Huawei’s equipment its core networks across Europe.
Even after all these accusations, investigations, and court cases, the U.S. government still has to come out publicly with proofs to prove the link between the Chinese government and Huawei. As of today, Huawei is pretty much in a bad spot. However, the company might benefit from the trade talks between the US and China. Let’s wait and see how far can the U.S. government goes to protect its businesses.
Update: Official statement from Huawei regarding Android Suspension —
“Huawei has made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefitted both users and the industry.
Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally. We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally.”