ZTE Forced Out of U.S. Smartphone Market

ZTE Forced Out of U.S. Smartphone Market
The Chinese smartphone maker has been forced to cease operations due to a U.S. trade ban.

(CCM) — Chinese smartphone maker ZTE has sent shockwaves through the U.S. market by announcing that it is to close down its domestic and international operations, Tech Times is reporting.

ZTE is the fourth largest supplier of smartphones in the U.S. after Apple, Samsung, and LG, with a 12% market share, according to the report. Its departure presents a huge opportunity for rival manufacturers to scoop up its share of the market.

The company has been forced to close due to a ban on U.S. companies supplying it with parts and technology, imposed by the Commerce Department. Almost one third of the parts that the company uses are supplied by Intel and Qualcomm, the report says. The ban was put in place because ZTE allegedly broke trade sanctions against Iran and North Korea.

"As a result of the Denial Order, the major operating activities of the company have ceased," ZTE said in a statement.

It is not yet known if parts and service will be available to honor phone warranties, or if software updates will be available for existing devices.

The company is attempting to have the ban reversed, but in the meantime it has suspended its online stores. Some international mobile phone carriers such as Telstra have also stopped selling ZTE equipment as the Chinese company's inventory has run out.

ZTE was founded in 1985 and is China's second largest telecom equipment maker after Huawei.

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