ZTE Selling Off Smartphone Business Following US Ban?

ZTE is reportedly considering selling off its smartphone business now that its operations have been halted due to the sanctions levied by the U.S. government. Potential buyers are said to include its Chinese rivals Huawei, Oppo and Xiaomi.

Nikkei reported Thursday that ZTE is in the process of figuring out whether it should just sell off its smartphone business following the export ban that Trump’s administration has imposed. If ZTE were to move forward with this idea, its rivals could inevitably enlarge their shares in their home country’s smartphone market.

ZTE may not be the top player in the Chinese market, but it still managed to rake in big revenues thus far. Last year, the company ranked ninth globally in terms of revenue. It even enjoyed huge success in the U.S., where it ranked fourth in the country’s smartphone market.

However, this could just be the end of the road for ZTE’s smartpone business. The U.S. government has banned its American partners including Qualcomm from exporting components for seven years, and that’s definitely a long time to for a company that needs many of those components at present.

Without the components, ZTE couldn’t operate normally. In fact, ZTE has already announced to stock market traders in Hong Kong on Wednesday that it has suspended all major operations. “The major operating activities of the Company have ceased,” the company said in a statement.

Among the halted operations is smartphone production. Its assembling facilities currently sit idle because supplies of key components are not arriving. Production staff are undergoing technical training since they are incapable of fulfilling their assigned jobs at a time like this.

ZTE has also pulled all of its smartphones from a showroom at its headquarters and suspended the online sale of the handsets through its website. The sale of its devices at third-party retailers has also been stopped.

Though the future seems bleak for ZTE, it is still trying its best to improve its situation. China’s No. 2 telecom equipment maker is reportedly intent on resolving the seven-year ban, according to Bloomberg. It is working to facilitate “the modification or reversal” of the ban so it could resume its operations.