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ZTE Exports Ban May Mean No Google Apps, a Death Sentence For Its Smartphones (arstechnica.com) 139

New submitter krazy1 shares a report from Ars Technica: The U.S. government is going after another Chinese Android device maker. After shutting down Huawei's carrier deals and retail partners, the government is now pursuing ZTE. The U.S. Department of Commerce has banned U.S. companies from selling parts and software to ZTE for seven years. ZTE was caught violating U.S. sanctions by illegally shipping telecommunications equipment to Iran and North Korea. The company then made things worse by "making false statements and obstructing justice, including through preventing disclosure to and affirmatively misleading the U.S. Government," according to the Department of Commerce.

The latest news from Reuters raises even bigger issues for ZTE, though. A source told Reuters that "The Commerce Department decision means ZTE Corp may not be able to use Google's Android operating system in its mobile devices." Android is free and open source and will probably remain free for ZTE to use without Google's involvement. Reuters' source is probably referring to the Google apps, which aren't sold to device makers but are carefully licensed to them in exchange for other concessions. The Google apps package includes popular services like Gmail and Google Maps, and it also unlocks the Play Store, Google Play Services, and the entire Android app ecosystem. For a market-viable Android device, the Play Store is pretty much mandatory in every country other than China. So while ZTE could conceivably source hardware components from non-U.S. sources, being locked out of the Play Store would devastate ZTE's smartphones worldwide.

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ZTE Exports Ban May Mean No Google Apps, a Death Sentence For Its Smartphones

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  • Cool, I guess.. Though I would have used to on other companies first.

  • In the EU, sure, the Google Play store is gonna be expected. However, I imagine there are scores of 3rd-world countries where most buyers never touch the Google Play store, and only run pirated apps via sideloading or sketchy 3rd-party stores (ya know, the ones filled to bursting with malware.) Remember back in the days of feature phones, when every carrier had their own software shop? ZTE could roll their own; it could have a few big names so they can say "we have X!", but otherwise be a ghost town.

    • by jonwil ( 467024 )

      They can't get the big names in their alternate store either since most of the big names are American and would likely be prohibited from supplying their software to the ZTE store under the sanctions.

  • by Viol8 ( 599362 ) on Friday April 20, 2018 @06:27AM (#56470161) Homepage

    ... and whether you agree with them or not they broke them. If you want to trade with the US you don't break US sanctions, its pretty clear, and lying on top of it was just the cherry on the cake. Serves them right frankly.

    • by iCEBaLM ( 34905 )

      ...and so do I. A full commitment is what we're looking for. We wouldn't get this from any other guy.

      • At first the company was just warned and requested to discipline it's management (firing 4 and reducing bonuses for about 30), the company agreed and ... didn't do it, then came the ban - it's hard to feel sorry in this case, if at all then only for the not involved workforce.
    • It's great that we're actually punishing a business for their wrongdoing, but I think it's only happening because they're a Chinese company. What's the country that only punishes foreign companies while giving their own a pass again?

  • by Errol backfiring ( 1280012 ) on Friday April 20, 2018 @06:32AM (#56470177) Journal

    No Google Apps, a Death Sentence For Its Smartphones

    Seriously?

    Where can I get a phone that is sentenced to death? I sure as hell wish I could easily replace the too-instrusive and never asked for Google junk for better alternatives. And tell my mom how to do it for her phone as well.

    I mean yes, I know that there is lineage OS, but that is not exactly mom-friendly. And installing F-droid is easy, but removing the Google junk is not. And every Android update brings more unwanted Google junk.

    • by Anonymous Coward

      > Where can I get a phone that is sentenced to death?

      Seconded. Usually, I'd pay premium for some gadget if it is Google-free.

    • There -are- no better alternatives.

      Doesn't mean you can't have a perfectly functional phone however.
      They can use alternative main apps and app-stores (Amazon, F-droid), so that things look good enough on display, but reviews will be brutal. Google apps could possibly be sideloaded also.

    • by AmiMoJo ( 196126 )

      You may get your wish now. ZTE isn't a small company and Chinese manufacturers have been shipping their own AOSP based systems for years. Maybe this is just the push they need to go world wide with them.

      It also seems to have screwed Google's Go launch in the US pretty badly. Maybe they will look for a way around it, like moving their intellectual property to their Irish HQ so they can continue selling it to ZTE.

    • by m00sh ( 2538182 )

      No Google Apps, a Death Sentence For Its Smartphones

      Seriously?

      Where can I get a phone that is sentenced to death? I sure as hell wish I could easily replace the too-instrusive and never asked for Google junk for better alternatives. And tell my mom how to do it for her phone as well.

      I mean yes, I know that there is lineage OS, but that is not exactly mom-friendly. And installing F-droid is easy, but removing the Google junk is not. And every Android update brings more unwanted Google junk.

      Exactly! Google loses by someone not using their system, not the other way round.

      ZTE will use Taiwanese chips and create its own version of android and store.

      If ZTE plays it right, this might just be the right amount of disruption to create a new ecosystem for their phones.

      Instead of creating low end, low margin phones, they might actually be forced to innovate and create something unique.

    • What? Lineage is basically stock android. Why is that not "mom-friendly"? Install F-droid on lineage and you're done. You answered your own question but kept on bitching.
    • Where can I get a phone that is sentenced to death?

      China, India, online from many places. Seriously look around. There are MANY devices out there that don't qualify for Play Services. The fact you haven't already got one just shows how much your post is more about hyperbole than actually caring about Google.

  • I think the Chinese market is large enough to support a few major telecom equipment makers through domestic sales. Enough western companies are making huge concessions to be allowed to sell there.

    So I guess if there is not already a flourishing market for non-Android phones, there will be one eventually. There goes one source of revenue from exports to China. In short, the Chinese can make do without us.

  • by sad_ ( 7868 ) on Friday April 20, 2018 @06:39AM (#56470195) Homepage

    they keep using android, and just add their own store, which just copies over all the apk's from the google play store and done.

    • by mentil ( 1748130 )

      That could technically 'work'... except that'd open them to a massive class action copyright lawsuit. Also they'd have to remove some DRM and that'd mean violating the DMCA. They'd never do business in the USA again, basically; worse than the 7 year ban they're currently subject to.

    • they keep using android, and just add their own store, which just copies over all the apk's from the google play store and done.

      Sounds easy . . . so that is why the US export laws are written to catch that.

      If HP sells computers to folks in France, and those folks later sell them to Iran . . . HP is still on the hook.

      By a coincidence out of the "Theater of the Hard to Believe" . . . I got a company internal email instructing us to review and obey US customs laws.

      • by dcw3 ( 649211 )

        That's known as a "re-export", and HP would be on the hook only if they had any knowledge that the French were going to take that action.

      • It seems that the rest of the world increasingly has to choose if they want to do business with the US or with others. In loosely related news, Huawei has been excluded from US government business and is considering leaving the US market entirely.

        In some cases, I guess US customs laws will just drive a wedge into US/Asian business relations. Without a winner.

    • by AmiMoJo ( 196126 )

      Google would be legally required to block them. Same as if ZTE set up another company to buy Google services and sell them on to ZTE.

    • Can’t sell that outside of china
  • by weedjams ( 4349793 ) on Friday April 20, 2018 @06:40AM (#56470197) Journal

    The Lifeline program was established by the Reagan Administration in 1985 to provide discounted phone services to low-income Americans. The program was expanded by the George W. Bush Administration in 2005 to include wireless services. Typically, these involve a modest prepaid service requiring no deposit, which includes a free cell phone, free minutes, and free texting. This program provides a basic need that many low-income individuals would not have access to otherwise.

    In 2015 there were 12.6 million households enrolled in the program, most of them on Safelink, part of Tracfone.

    Guess what brand phone they give out?

    yup, ZTE

    Soylent green is poor people!

    • by mentil ( 1748130 )

      The Lifeline program doesn't pay out money for hardware, only for service. The recipient has to obtain their own phone. Many Lifeline service providers do give away cheap phones (ones that are ancient and won't sell, and/or recycled) however.

    • Re: (Score:1, Informative)

      by Anonymous Coward

      The Lifeline program was established by the Reagan Administration in 1985 to provide discounted phone services to low-income Americans. The program was expanded by the George W. Bush Administration in 2005 to include wireless services. Typically, these involve a modest prepaid service requiring no deposit, which includes a free cell phone, free minutes, and free texting. This program provides a basic need that many low-income individuals would not have access to otherwise.

      In 2015 there were 12.6 million households enrolled in the program, most of them on Safelink, part of Tracfone.

      Guess what brand phone they give out?

      yup, ZTE

      Soylent green is poor people!

      That's disingenuous, deliberately misleading BULLSHIT

      A short history of the ‘Obamaphone’ [federalnewsradio.com]

      During the 2012 election, a viral video concerned something call the “Obamaphone.” A woman in Cleveland exclaimed she and all her friends were given “Obamaphones.” Free cellphones from the government! It registered in my mind as an oddball concept, but I never followed through. The term somehow got creatively twisted to sound as if Obama — the administration, or the campaign maybe — was buying votes with cellphones.

      So what is the etiology of “Obamaphone”?

      ...

      During the Obama administration, the FCC’s approach to universal service expanded. Congress in 2009 enacted a law ordering the FCC to develop its National Broadband Plan. The Obama administration, well into the internet and wireless age, agreed that broadband and cellular services are essential. So, yes, citizens of various federal programs could qualify for a cellphone — a basic one, not the latest iPhone or Galaxy — with a plan they receive under Lifeline.

      The program has come back into the news in recent days, principally on conservative sites, because of a Government Accountability Office study of Lifeline, one of four FCC programs funded by the Universal Service Fund.

      The fund itself has reached about $10 billion ...

      So, cell phones weren't given out until Obama.

      So, yeah, they're appropriately called OBAMAPHONES. And the program is rife with fraud - again appropriate for an Obama initiative designed to curry favor/buy votes.

  • are those stupid Google apps. Do not even use their email client, you never know if they send my imap credentials into the USA NSA PRISM et a. database for later use. No thanks.
    • by gtall ( 79522 )

      Stop watching T.V., it is bad for you.

  • ... and ZTE moves to Sailfish OS as a fallback and we finally get more than one iteration of relyable non-Gooapple Touchscreen Smartphones. That would be so cool. Lineage is neat, but I would rather use Sailfish and some Phone that officially uses it. And not just as a side-project.

    • ZTE's sales are 95% in the US, they won't be able to sell in the US for 7 years. This is a corporate death sentence and it's well deserved based on what they did.

  • When other Chinese companies run afoul of their customers, they just pack up shop and re-incorporate under a different name, and then sell the same damn thing again. What's to keep ZTE from doing this?
  • I got my kids some ZTE ZMax Pro. These have been great phones. Decent screens, and fair amount of memory for a $179 phone. Best of all, USB Type-C which means I am not needing to buy replacement charging cables for my kids every two months. Way faster charging, way way way more durable.

    Zero problems... which when you have 6-10 year olds using regularly, is pretty darn amazing.

  • by Citizen of Earth ( 569446 ) on Friday April 20, 2018 @12:48PM (#56471921)
    Sanctions with actual teeth is why North Korea is in the process of negotiating denuclearization. Supply NK, get the Corporate Death Sentence.
  • ANYONE who even thinks of challenging the stranglehold in the USA, gets taken down one way or another. Look what happened to Huawei, now ZTE. If I were a lot of these manufacturers, I wouldn't even bother trying to break into the USA market. Bunch of fools in the USA think you HAVE to buy a phone from a carrier store, which means you are pushed toward the apple/samsung brands. Oh, but they offer zero down, zero interest!!! Yeah, they got rid of the 2 year phone contract, now lock you into the no money d
  • ZTE sells the company under a rebadged name, and they don't have a problem as long as major ZTE shareholders don't control the new company

  • Just as well. My ZTE smartphone ignores my settings anyway.
    The more notifications and auto-whatever settings I disable, the MORE start running!

    Now I have to turn my cell phone off when I sleep because I keep getting these STUPID notifications about stuff I disabled; thinking it is an emergency call!
    W T F ? ! ? ! ?

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