Well. That's not good. You may have heard about how the US Commerce Department banned American companies from selling parts and software to ZTE last month. There's certainly some tension there from a security standpoint, but this is very much a power move from an international trade perspective. And it has hurt ZTE really bad, to the point where it looks like they're closing up shop.

Shortly after the ban was issued, ZTE asked the US Commerce Department to suspend the business ban until they could figure out how to better address the situation. Perhaps unsurprisingly, the folks at the US government pretty much ignored them.

So now, ZTE has announced that they are ceasing their main business operations and running out their contractual obligations by burning through their cash reserves for the time being. "As of now," ZTE stated, "the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations"

In the interim, China's second largest telecom equipment maker is still trying to work things out to have the ban reverse or, at the very least, modified. The ban, as you may or may not recall, was imposed because ZTE apparently violated US export regulations when they started shipping goods to Iran. ZTE relies on components from US firms like Qualcomm and Intel.

Things looked optimistic for ZTE when I spoke with Chairman Lixin Cheng a few years ago. They were pushing the "affordable premium" brand positioning well with devices like the Axon 7 Mini and Axon Pro. They addressed a gap in the market and quietly moved into the hands of many consumers around the globe.


The future is unclear, at this point, but it's not looking good for ZTE.

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