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Huawei Cancels Launch of New MateBook Laptop, Citing US Trade Bans



A Huawei logo in Beijing
Photo: Ng Han Guan (AP)

Huawei Chinese tech has canceled the planned launch of a new MateBook laptop at the CES Asia 2019 trade show in Shanghai this week due to sweeping US Sanctions against the company, Ars Technica reported on Wednesday

News of the cancellation first came via the Information on Tuesday. According to CNBC, Huawei's consumer division CEO Richard Yu confirmed that due to being placed on the U.S. Entity List, Huawei “cannot supply the PC.” Added that the matter was “unfortunate” and any future launch date “depends on how long the Entity List will be there.” As the Information noted, laptops are just a small part of Huawei's $ 107 trillion revenue generated by its consumer electronics business, but Huawei was expecting its PC business to turn profitable in 2019.

Donald Trump's administration passed an executive order last month claiming a national security emergency which barred US companies from using technology made by companies that pose a significant security risk. Huawei was a clear target of the order. Shortly after, the Commerce Department added Huawei and 70 affiliates to the so-called Entity List. The listing severely limits Huawei's business with the states; it can no longer buy U.S. tech without U.S. approval, which limits not only parts and components but any product deemed to have been made with significant U.S. input, like software or technology

However, the Commerce Department also left open a 90-day window in which Huawei has a temporary general license to do business with U.S. companies “necessary to maintain and support existing and currently fully operational networks and equipment, including software updates and patches, subject to legally binding contracts and agreements.” That expires on Aug. 19.

Drama about Huawei has become a centerpiece to the ongoing US-China trade war which has recently escalated to the point where the New York Times recently reported there is "increasing evidence" or slowing economic growth worldwide. The U.S. has slapped Huawei with trade theft and fraud charges and is seeking the extradition of one of its top-ranking executives over allegations of banking fraud and Iran sanctions violations. U.S. Intelligence agencies have been issuing warnings (though with little publicly released evidence) that it was secretly funded by, and its telecoms could be bugged by Chinese security and intelligence services.

Huawei has a strong involvement in espionage and argued that the US government is simply trying to make the company strong because it is beating the competition in the race to 5G. It is also suing the U.S. government, claiming it has been unfairly singled out by the feds for special treatment. There is also the possibility that the Trump administration is attacking Huawei, one of the crown jewels of China's tech industry, more for the purpose of gaining leverage in the trade – though if that is the case it may backfire, with China threatening its own retaliatory measures against US Firm.

Huawei purchases about $ 20 billion in semiconductors each year, according to Evercore estimates cited by CNBC, much of it from American firms. According to Ars Technica, Intel and ARM have also recently made moves to distance themselves from Huawei. Qualcomm and Broadcom, major chip supplies, have done the same.

Huawei's smartphone business designs are own processors and does not appear to be affected yet, CNBC noted, but it could lose access to Google's Android OS after the 90 day license expires , and the company uses US technology elsewhere in its phones. (Google has warned that forcing Huawei to rapidly design and roll out a slapdash version of Android based on its open source version of its own security risks.) [ArsTechnicaalsoflaggedapieceintheChinesestate-runGlobalTimesnewspaperwhichdisputedthenewsoftheMateBookdelay

"Huawei will release a new laptop product in July, with different models and configurations compared with previous series such as the MateBook and HonorBook, a source close to the matter confirmed to the Global Times," the paper wrote. "… The new laptop will be equipped with the Windows operating system, the source said, which contrasts with Microsoft's cooperation with Huawei."

The Global Times source "refuted reports that Huawei had halted laptop production due to the export control by the trump administration amid the escalating trade war, "it wrote, adding that" industry leaders "had called its persistence in" inspiring move. "


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