Best Buy will stop selling Huawei smartphones in a move that may highlight how an escalating trade war is going to hit technology vendors.
CNET's Roger Cheng reported that Best Buy will end the sale of Huawei smartphones in the weeks ahead. Huawei already has been shut out by U.S. wireless carriers.
On the surface, Best Buy's move isn't all that surprising. Consider:
- China-U.S. trade is becoming a larger issue with tariffs being launched on a bevy of goods.
- Huawei has been flagged as a security concern by the U.S. government. Citing risks but no evidence, US intel chiefs warn against using Huawei, ZTE phones | Huawei: National security concerns not a blank cheque for public policy decisions
- Huawei has been a lightning rod in the U.S. for its power on networking infrastructure as well as mobile devices.
- Brands are wary of being caught in the vortex of President Trump tweets and political issues.
From the Best Buy side of the equation, ditching Huawei makes business sense. The sales of Huawei's unlocked devices simply weren't enough to outweigh the potential risks.
On the Huawei side of the fence, the Best Buy move is devastating from a distribution perspective. But it's worth pondering a few other wrinkles, including:
- Huawei has never had a foothold in the U.S. on the enterprise or consumer side of the business. Losing out on the U.S. isn't that big of a loss considering that Huawei was never a player.
- Huawei's approach would likely be well received in the Android ecosystem. The 10 best smartphones of 2018 (shame about Huawei) | Going rogue at CES 2018: Is Huawei a 21st century Dell?
- The game for Huawei is being dominant in the rest of the world on devices as well as networking and smart city deployments. Huawei has succeeded in emerging markets relative to U.S. rivals.
- Cisco, Huawei take duel to smart cities
- Huawei: Honor View 10 pre-orders in US begin at $499, ships March 23
- MWC 2018: Huawei and BT to trial 5G
- MWC 2018: Huawei launches 'Intent-Driven Network'
- MWC 2018: Huawei focuses on connecting emerging markets
- Via the passive aggressive U.S. ban on Huawei devices, the company may actually see a boost in interest. In the U.S., a device like the Mate 10 may be seen as cooler simply because of the lack of availability. Demand abroad could also improve where Huawei is available. It's doubtful, Huawei would have a marketing line like "banned in the U.S.," but you get the gist.
Perhaps the broader question is what happens to other companies with China ties as trade tensions escalate. Will Lenovo have issues? What about those Apple devices manufactured in China? Huawei may or may not be a security threat, but it doesn't take much to play out more tech industry issues ahead.