Huawei Suffers Fresh Blow in US Market

Huawei’s quest to become world’s #1 smartphone brand is threatened afresh as a leading United States’ multinational consumer electronics corporation, Best Buy, which also operates internationally in Canada and Mexico, has ceased ordering new phones from Huawei.

Persons familiar with the Best Buy’s operations say the company will stop selling products by China’s biggest smartphone maker, Huawei, completely over the next few weeks.

Best Buy’s decision had been reported earlier by Reuters and CNET.

Best Buy was formerly operational in China until February 2011 (when the faction was merged with Five Star), and in Europe until 2012.

“We don’t comment on specific contracts with vendors, and we make decisions to change what we sell for a variety of reasons,” said a spokesperson for the electronics retailer.

Huawei did not dispute the reports.

In statement to CNN, a spokesperson said Huawei “values the relationship it has with Best Buy and all our other retail partners. As a policy, we do not discuss the details of our partner relationships.”

Huawei has struggled in the US market in large part because of official concerns that the Chinese government can use its smartphones and other products for intelligence gathering — allegations Huawei has repeatedly denied.

US consumers can still buy Huawei’s smartphones without a wireless plan at Walmart (WMT), but the loss of Best Buy is just the latest blow to Huawei’s US ambitions.

Huawei’s hopes of clinching its first deal with a major US carrier were dashed this January when talks with AT&T collapsed at the last minute.

Then in February, US intelligence agencies warned Americans not to buy smartphones made by Huawei or ZTE, another Chinese tech company, saying the devices pose a security threat to American customers.

And only last week, President Donald Trump killed a $117 billion hostile takeover of US chip-maker Qualcomm (QCOM) by its rival Broadcom (AVGO), after the Committee on Foreign Investment in the United States warned the deal could allow Huawei to gain ground in 5G technology.

In 2012, Congress released a report saying Huawei and ZTE, another Chinese tech company, should be viewed “with suspicion.” The companies both strongly disputed the reports’ findings at the time, with Huawei calling them “baseless.”

Huawei said on Thursday it has “won the trust and confidence of individuals and organisations in 170 countries around the world.”

The company is the world’s third largest smartphone maker behind Samsung (SSNLF) and Apple (AAPL). It is also a leading provider of telecom equipment in Asia, Europe and Latin America.

Huawei is “committed to earning that same trust with US consumers and making our products accessible in as many ways as possible,” a company spokesperson said.

Best Buy was founded as ‘Sound of Music’ 51 years ago by Richard M. Schulze and Gary Smoliak on August 22, 1966 as an audio specialty store. In 1983, it was renamed and rebranded with more emphasis placed on consumer electronics.

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