Trump Declares National Emergency Over Threats to American Tech

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Today President Trump has issued a national emergency over threats against American technology. A ban is expected to follow that will stop U.S. companies from doing business with Chinese company Huawei.

In a statement, White House press secretary Sarah Huckabee Sanders wrote that the administration will “protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services in the United States.”

iPhone China Sales Down 30% in Q1 2019

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Apple’s iPhone China sales are down 30% in Q1 2019. Huawei continues to dominate, capturing 34% of China’s smartphone market.

Apple’s performance in China is concerning, given that the worst quarter for iPhone shipments is usually Q2 or Q3, not Q1 when new devices are still fresh. Apple has acted to cut iPhone retail prices, which has largely relieved the pressure from its channel partners.

I wonder how much of iPhone sales in China were impacted by Chinese companies encouraging employees to boycott Apple in favor of Huawei.

Vodafone Denies Huawei Italy ‘Backdoor’

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A report from Bloomberg says software flaws found in Vodafone’s Huawei equipment back in 2011-2012 were backdoors. Vodafone, while admitting that the equipment did have security flaws, denies that Huawei could have used them as such.

The issues in Italy identified in the Bloomberg story were all resolved and date back to 2011 and 2012. The ‘backdoor’ that Bloomberg refers to is Telnet, which is a protocol that is commonly used by many vendors in the industry for performing diagnostic functions. It would not have been accessible from the internet. Bloomberg is incorrect in saying that this ‘could have given Huawei unauthorised access to the carrier’s fixed-line network in Italy’.

The BBC article is worth the read. Also keep in mind that this isn’t the first time Bloomberg has reported on alleged backdoors by a Chinese company. They provided no evidence the first time and so far have refused to issue a retraction.

Huawei Suing U.S. Government Over Ban

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Huawei is suing the U.S. government because its products were banned from being used by federal agencies.

According to one of the people familiar with the matter, Huawei’s lawsuit is likely to argue that the provision is a “bill of attainder,” or a legislative act that singles out a person or group for punishment without trial. The Constitution forbids Congress from passing such bills.

Growing Questions around Huawei's Links to Chinese State

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Despite insisting on its independence, the questions around Huawei’s connections to the Chinese government have grown in recent months. CFO Meng Wanzhou remains under effective house arrest in Canada and the U.S. is preparing to ask for her extradition. Western firms stopped using Huawei technology for key infrastructure, particularly around the roll-out of the 5G network. Wired looked at what is really going on.

It has been suggested the Chinese state could put pressure on Huawei to install backdoors into its products which would allow China to spy on network traffic, potentially on a global scale. Political leaders have also questioned Huawei founder Ren, who was an engineer in China’s army and joined the ruling Communist Party in 1978. Similar concerns have previously been raised around Russian security firm Kaspersky, and its connections to intelligence services in the country.

Federal Prosecutors Push Huawei Criminal Investigation

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Federal prosecutors in the U.S. are pushing a criminal investigation against Huawei. The Chinese firm is alleged to have stolen trade secrets from U.S. business partners, including T-Mobile U.S., the Wall Street Journal reported. This latest development puts even further pressure on the company. It has already been caught up in an investigation by the U.S. Government into intellectual property theft by Chinese companies. It’s CFO, Meng Wanzhou, was arrested in Canada in December 2018 at the request of the U.S.

The investigation grew in part out of civil lawsuits against Huawei, including one in which a Seattle jury found Huawei liable for misappropriating robotic technology from T-Mobile’s Bellevue, Wash., lab, the people familiar with the matter said. The probe is at an advanced stage and could lead to an indictment soon, they said.

Huawei CEO Said Firm Not a Spy for China

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Huawei CEO Ren Zhengfei insisted his company does not spy on behalf of China. In a rare public appearance, reported by the Wall Street Journal, Mr. Ren said: “I personally would never harm the interest of my customers and me and my company would not answer to such requests.” It comes as his daughter, the company’s CFO Meng Wanzhou, is fighting extradition to the U.S. after being arrested in Canada.

“No law requires any company in China to install mandatory back doors,” Ren Zhengfei said Tuesday. “I personally would never harm the interest of my customers and me and my company would not answer to such requests.” Mr. Ren’s public comments at Huawei’s campus are his first in years and come as the telecom giant faces challenges on multiple fronts.