Chinese technology company Huawei has taken a beating in the press and in the consumer marketplace this year, and the brand is desperate for a hopeful message to turn things around. That probably won’t happen this week.
News agencies across the world are reporting that Canadian authorities have arrested Huawei CFO Meng Wanzhou, and there are now reports that she may be extradited to the United States.
Charges haven’t yet been made clear, and Huawei released a statement arguing that the company is “not aware of any wrongdoing …” by Meng. That cautious statement has allowed speculation to run wild, even though there’s currently very little substance to any of the ideas. But nonspecific bad news is nowhere near the good news narrative Huawei needs after months of negative headlines.
The company, which manufactures smartphones and telecommunications equipment, has been on the receiving end of some serious challenges this year, beginning with the announcement in January that a deal which would have had AT&T selling Huawei smartphones in the U.S. ended up “fizzling at the last minute,” according to media accounts.
At the time, market watchers wondered why such a promising deal “fizzled,” and speculation regarding company leadership and other issues began to percolate. Those rumors evolved throughout the year, leading some to conclude that the U.S. government and, by extension, U.S. companies, may have some security concerns about Huawei handsets. Some argued that the company’s technology could be “used by the Chinese government to gather intelligence …”
When these narratives began to take shape, Huawei was put on what has been a continual defensive stance, first denying the allegations, then trying to beat back the related criticism. But the denials didn’t work. About a month after reports of the failed AT&T deal, U.S. intelligence agencies warned American consumers to avoid using any Huawei phones, describing the devices, as well as those produced by at least one other Chinese company, as “posing a security threat.”
Huawei chose not to specifically address those comments, opting instead to offer a vague assurance that it would “monitor” the situation. This did nothing to calm fears, leading Best Buy to announce, in March, that it would no longer sell Huawei phones. Not long after, in Australia, the phones were banned on 5G networks.
Similarly, telecom companies in the United Kingdom vowed not to buy Huawei phones for the country’s 4G network. Huawei called this series of developments “extremely disappointing” while continuing to deny its products pose any kind of security threat to consumers. But retailers and consumers aren’t hearing that message. Instead, they’re hearing that a top executive has been arrested.