ZTE’s smartphone plans have been jeopardized in a major way by the latest ban placed by the United States Department of Commerce. The department has banned companies based in the United States from selling components to ZTE as a result of the Chinese company violating the terms of a sanctions violation case. While this will prevent ZTE from sourcing processors from Qualcomm, it may also lead to the company losing its Android license.
ZTE was initially accused by bypassing U.S. sanctions on Iran back in 2016. Even though it’s a China-based company, ZTE was found to be using multiple shell companies to sell U.S. technology to Iran. ZTE paid $890 million in fines and penalties aside from promising to fire four senior employees and reprimanding 35 others.
The company admitted in March this year that while the four employees had been fired, it didn’t do anything about the 35 others. The Department of Commerce has subsequently slapped a seven-year ban on ZTE which means the company can’t source components from U.S.-based companies for this duration of time.
A source familiar with the matter tells Reuters that this decision by the Commerce Department may also mean that ZTE won’t be able to use Google’s Android operating system in its mobile devices anymore. If that does happen it’s going to be a big blow to the company’s smartphone plans as there’s no other OS available right now comparable to Android that can be licensed.