By Star Chang, posted Aug 26, 2012 at 8:45 AM, 460 views,

Huawei and ZTE Face US Patent Probe

The United States International Trade Commission announced that it had launched a patent probe into Huawei and ZTE, the latest of a series of blows to Chinese telecom gear makers in the US market. The investigation points to certain wireless consumer electronics devices and components, 24 companies, from both the US and overseas, are involved in the investigation. The products at issue are consumer electronic devices with wireless capabilities, such as tablets, smartphones, e-readers, mobile hotspots and broadband wireless modems …

The investigation is based on a complaint filed by three California-based manufacturers last month. They called on the commission to “issue an exclusion order and cease and desist orders” on the wireless devices in question. If the order is followed, it could have a severe impact on Chinese telecom companies, since they would no longer be allowed to sell certain devices in the US market. The US authorities have conducted a series of investigations and issued prohibitions on Huawei and ZTE in recent years. Both companies have experienced a bumpy road in tackling the US market. They are barred from selling network equipment to major US carriers, due to political and security concerns.

Since Huawei and ZTE encountered setbacks in the network infrastructure market, they have found other ways to grow their business in the US. Both companies started to promote mobile phone and enterprise IT solutions in recent years, and experienced strong growth momentum in the US market. The US is one of the world’s biggest consumer electronics markets, and terminal businesses have gradually played a more important role for the Chinese telecom gear makers. As we can see, the investigation is somehow pressing the Chinese companies to reach an agreement with US companies. Huawei and ZTE need to pay more attention to innovation in order to gain an advantage in oversea market.

SOURCE: CHINADAILY