Chinese smartphone vendor Huawei appears to have encountered a major stumbling block in its plans to expand its U.S. smartphone business, with the Wall Street Journal reporting that AT&T has discontinued plans to sell Huawei phones. According to the report, the companies had initially intended to announce their partnership this week at the Consumer Electronics Show in Las Vegas.
The Journal reported that it was unclear why AT&T changed its mind about Huawei. The two companies declined to comment on the topic.
Late last year a number of reports indicated Huawei was in talks with U.S. wireless carriers including AT&T and Verizon to expand its smartphone sale in the U.S. market. Such a deal would represent a major boost to the Chinese smartphone vendor; it currently sells unlocked phones through Amazon and other retailers in the United States, but the vast majority of smartphones in the United States are sold through the nation’s wireless carriers.
Despite AT&T’s reported decision to step away from an agreement with Huawei, another operator may well ink an agreement with the Chinese smartphone vendor. Indeed, Verizon, T-Mobile and other carriers continue to work to sell unique, exclusive devices in order to set themselves apart from the competition. For example, T-Mobile recently expanded its self-branded lineup of Revvl phones, while Verizon has retained an exclusive agreement to sell Google’s Pixel lineup.
But a U.S. distribution agreement doesn’t seem to have slowed Huawei’s global smartphone sales efforts. In its year-end message, Huawei confirmed it shipped 153 million smartphones during 2017, which the company said was a 10% increase for the year that gave the company a 10% share of the global smartphone market.
While that growth was also Huawei’s slowest since 2013, it firmly positions the company behind Samsung and Apple as the world’s third-largest smartphone vendor. Thus, the Chinese company was able to grow into a global smartphone powerhouse without any major sales agreements with U.S. carriers, the U.S. smartphone market sits alongside China and India as one of the world’s largest.
Hanging over Huawei is a 2011 U.S. government report that recommended U.S. companies avoid using equipment from Chinese vendors Huawei and ZTE due to national security concerns.