Windows Phone partners Huawei and ZTE labeled security threat by the US

The Samsung Focus or ZTE Orbit?

The US Congressional Intelligence Committee has labeled Huawei and ZTE as security threat to the US and is advising firms to not do business with them. This follows after an 11-month investigation into both companies where their cooperation on certain matters was, according to the committee, sufficiently lacking.

The charges (at least for Huawei) go back a few years here in the US where they were accused of high-level espionage of Nortel, with some even alleging that their IP theft helped destroy the company (see the excellent CNBC documentary on it here).

Cisco and Motorola have also accused Huawei of either stealing IP or their own employees to gain knowledge of those companies. In addition, charges of bribery, corruption and discriminatory behavior have been alleged too.

Now, the US government is actively advocating that both companies be blacklisted here due to their closeness to the Chinese government. The request though falls short of an outright boycott of the firms. The claim is so bold that we’ll reprint it the entire quote from US Congressman Mike Rogers who spoke with 60 Minutes:

“If I were an American company today, and I'll tell you this as the chairman of the House Permanent Select Committee on Intelligence, and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America."

Whether or you not you agree with the claims, this positioning of the US government and the exposé by the respected news program 60 Minutes will have a huge impact on both companies trying to do business here in the States.

Huawei and ZTE have both announced intentions for Windows Phone 8 handsets with Microsoft giving the nod to both companies. ZTE has repeatedly gone on record that they want to enter into the US market (see our previous coverage) and they recently did so on US Cellular with the ZTE Render (aka Orbit). Huawei are reportedly looking towards early 2013 for their first Windows Phone 8 handset.

However, we should point out that the committees’s claims pertain only to “devices that involve processing of data on a large scale” e.g. larger-scale networks, routers and other mass computer technologies.

Smartphones, for their part, appear to be exempt from the findings. We also know that OEMs cannot really modify the Windows Phone OS in any significant ways, meaning a Huawei or ZTE phone should theoretically be invulnerable to any sort of nefarious data collection (what everyone here is probably thinking).

Having said that, clearly the damage is done—or just beginning—for both firms and it is unclear how Microsoft will respond to this situation, if at all.

We’ve reached out to Microsoft for a response.

Source: Reuters, 60 Minutes; via Android Central

Daniel Rubino

Daniel Rubino is the Editor-in-chief of Windows Central, head reviewer, podcast co-host, and analyst. He has been here covering Microsoft since 2007 when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, Microsoft Surface, laptops, next-gen computing, and for some reason, watches. Before all this tech stuff, he worked on a Ph.D. in linguistics and ran the projectors at movie theaters, which has done absolutely nothing for his career.

  • So then where would we get the low end smartphones from??
  • I think Nokia would argue for a crack at it, but I see what you mean.
  • Maybe explains why promised phones haven't materialized...maybe MS pulled out with prior knowledge of report ?
  • Wow, this is crazy!
  • they can still make phones for the Chinese market, they are used to getting spied on.
  • Eating Chinese food is okay? Or is that also a security threat to the USA?
    Biggest threat to the people here is Big Mac.
  • I think your dismissal of what is a growing cyber security threat from China is more alarming. Don't be so glib. You should really watch that CNBC doc we link to above. These and other Chinese firms are routinely and actively stealing IP right from US servers of tech giants--even Google's Gmail system was hacked a few years ago, as was security giant RSA.
  • It is quite easy to dismiss actually. This stuff happens everywhere. It just so happens that America is whining about it now that they can't protect themselves as well as other countries.It even happens in their own back yard.
    The most recent and in the spotlight example would be Steve Jobs claiming that Andy Rubin stole Apple's IP and his war on Android.
    And yes, I watched the documentary.
  • Straw man much? You're comparing Chinese food to a cyber security threat. Good going there.
  • Comparing food vs security really? These companies will never get a dime from me that's for sure. I'm ok with the USA NSA listening to the world text,calls & so on but China sorry they are known to still information & can not be trusted.
  • China is known for " still information"? Really? You OK with NSA listening to text & calls and therefore you trust them? Cybersecurity threat to USA? Wow! I am so scared... You guys are so funny sometimes, so out of reality, it's almost amusing
  • Considering that I've never heard of either company, I think I can live without them.
  • +1
  • I am sure you have heard of MetroPCS and Clearwire. They are using Huawei and ZTE equipments. I am not going near either one of them.
  • Cricket
  • MetroPCS will merge with t-mo
  • I have heard of MetroPCS, but not Clearwire.
  • I don't know about the accusations enough to make any sort of conclusion on this, but I have a feeling that all Americans have a Bush mentality. First, Bush wages a war on any foreign are that could, maybe, possibly, potentially, sort of be involved in the 911 attacks.
    Then Apple says that every single one of Samsung's handsets is a copy of the iphone even though they have a lot of funky looking handsets that look absolutely nothing like iphones and they somehow get a 1 billion out of it.
    And now this when Apple, MS, Bell, Telus, Rogers, and Google all collect tons of information everyday as well....
    Sounds fishy to me. Who knows though. We will see.
  • Those are some gratuitous sweeping generalizations you're making of a very complicated country and its people. Borderline offensive. You're also lumping together disparate issue with politics, economics, private firms and the US government. You're linking of those subjects together under a single rubric reeks of intellectual dishonesty (or conspiracy theory ramblings). We provide the sources for you to learn more on this subject and I strongly suggest you use them.
  • All RottenTomatoes11 does is generalize. You should see his forum posts.
  • Imo, u are a dumbass. We've already proven before that Google was hacked into by a Chinese company, so the government takes these things very seriously. Most people opposed the war, but congress votes on that, not us. It was a single Samsung phone that looked remarkably like an iPhone, and its Korean not Chinese. Apple has nothing to do with the US government
  • You don't know enough about the subject and yet you can FEEL that Americans have a Bush mentality. What you are spewing is your inherent bias of Americans. Intelligent people debate based on facts. All you can do is trying to link totally disparate subjects to support your bias. There are many instances that prove China is hell bent on economic espionage. The US government has actually been too polite about these activities of China. It is high time to highlight them. 
  • Oh, believe me, I have studied enough History and Psychology to contribute. I guess it is perfectly okay to generalize when it comes to collectivist  vs. individualist cultures but it isn't okay when it is a sensitive issue to Americans. Double standards? I believe so. I am probably going to get banned for this but I feel that this must be said to educate the people willing to listen.
    The reason I bring this up is because it is something that can be generalized. A collectivist culture like HTC or Samsung for example, would never ever try the things that Apple did unless they were threatened and felt like they needed to throw a counter lawsuit to protect themselves. I wouldn't be surpised if the Apple executives feel that they need to bully to succeed in life and that is why they did it. That could be a product of an individualist culture.
    The one phone that looked like an iphone, the international GS1, was out of US jurisidiction because it was never sold in the US but it didn't stop Apple from winning 1 billion dollars off of it. Disgusting I know.
    The Bush case speaks for itself but it is quite obvious that most Americans were perfectly okay with his actions since he was re-elected. Again, a collectivist culture type government would never allow their army to go assasinate someone in another country even if it was Bin Laden and if they did, they would never re-elect them if they had a choice. They felt they had the right and reacted without doing their due diligence. Perhaps another product of the individualistic culture.
    Given the above information, why are people surprised at all that some people believe that this could be just paranoia by powerful officials in the US again? I am aware Apple is not part of the government but they might as well be since they have a lot more money than the US Government and runs the general US economy in some form.
    Generalizations are not all bad, even the smartest academics make them sometimes and they do contribute to discussion. Before chewing me out, just think about it. There is truth to my statements. If it turns out that I am wrong, and that this is really some National security issue against the Chinese government, then I am wrong. But that still doesn't change the fact that Americans tend to accuse first before any other country. The above scenarios may not be directly related issues but they all share the common ideology of accuse and react first by powerful people in America. Coinicidence? Maybe.
    I am Canadian and not from some collectivist culture btw, if that matters. Okay, ban away.
  • Apple's case wasn't only on phone design. It's clear you know nothing about anything you're saying. Please, stop digging yourself deeper.
  • Yes, it was on even more BS than phone design, which makes Apple's attitude even more disgusting.
  • It is never okay to generalize anything if you want to avoid being logically fallacious.
  • @tomatoes11 I don't ban people for spewing nonsense and idiocy. Get off your victim complex.  You spout the most debased form of argument I have ever seen while seemingly looking intelligent. You study Psychology? Wow, color me non-impressed. That's up there with Economics as far as faux sciences go. If you cared about about how people thought, you'd go into neuroscience, not pop-culture nonsense like psych aka "the easiest major in college" next to "marketing and management", of course. And "history" is about as objective as our major media outlets. That is, it's not ergo not a real science either. So stop trying to wrap your opinions about a foreign culture based on some pseudo pop-science that you read on the internet. When you want to try some real science, some real thinking, let me know...
  • Ok, umm I know we are on the should try use it to maybe.....Ummm do some research before you speak again.  Please?  You are applying on social theory to something that cannot be explained by one generalization.  You commit several fallacies in the first few paragraphs that I almost did not read your entire argument.  Please for the love of God, Jesus Christ and the Holy Spirit do some research before you post again pleaseeeeee.  And look up all the arguments fallacies you can commit, and commit less of them please. I'm begging you.  
    And it is known fact that the Chinese have been hacking everything from the US to every known world government.  They have access to a lot of hackers and encourage them to hack.
  • I would never even consider devices from these companies.
  • This is interesting. I saw the story about it last night on 60 minutes.
  • Wow... Now this is insanity. I don't think many people in the US would quickly reach for a phone made by one of these companies, though, because they're not widely known here. I can honestly say I've never seen a single Huawei or ZTE phone in anyone's hands... Well, I can at least speak for the NYC area.
  • True, but who heard of HTC as a brand a few years ago? Things change and ZTE is one of the largest phone manufactures in the world (4th, I believe).
  • True, but HTC is Taiwanese, with whom we have very good relations.
  • His point was, how quickly a company can become mainstream.
  • That had nothing to do with the statement I was responding to: " I don't think many people in the US would quickly reach for a phone made by one of these companies, though, because they're not widely known here" HTC being Taiwanese has nothing to do with the fact that they were once a no-name and are now a major brand label. ZTE is "unknown" too in the US though they are one of the largest OEMs. Things change.
  • I know it is beside your point, I was just mentioning it
  • That's true. This story is a bummer... I was actually telling my best friend that these two companies were coming out with new Windows Phone 8 phones. We were both eagerly awaiting what they would be, even though we're both loyal to Nokia.
  • Good
  • wpcentral, you left out the fact that ZTE admitted as a "security vulnerability" a hardwired backdoor password access to at least one of their handsets, probably as many as five, the ZTE Score being the one that made the news.  The backdoor would have enabled more than simple software update pushes.  The company cites it as a vulnerability then insisted it was for updates.  Both companies were founded by heavily connected dudes, heavy ties to the PLA, and to have risen to being the huge players in carrier class switchgear that they have (add China's propensity to copy sh*t blatantly)...smells rotten to me.
  • I'll have to watch that documentary before my opinion is valid, but I hope the extensiveness of this situation is not as it seems.
  • Nice article,its amazing how naive my fellow Americans are sometimes,smh.
    I can't believe ppl that read this site have never heard of either companies.
  • I'll stick with Nokia, thank you very much.
  • Even thought the OS is relatively secure, any data that passes through network radios is susceptible to snooping.
  • I posted this on another thread, those two companies are extremely shady and we're better off with nothing from them, in the US anyway. I've seen first hand examples of beaconing in their products, it's a national security issue.
  • Huawei has been in the hot seat with the US for years, so it's not surprising to me. Still, I wouldn't be buying their products regardless.
  • It's funny. Just a couple of weeks ago, the Giant Bomb podcast was joking about how China routinely ignores IP. They made a "China Don't Care" t-shirt for one day only.
  • Thank you Daniel and WP central for bringing more awareness to us, your readers as its related to WP. We are living in uncertain times and China, with its policies and behavior, make it clear that they are no real friend to the USA. It's important to be rightly informed as people, as consumers and as citizens
  • They had a report on this on 60 minutes last night.
  • Now we know you didn't read the actual post before commenting :)
  • +1
  • Busted, LOL!
  • soooo.. when the americans forced a virus on the  iranian nuclear program that affected computers all over the world its just a justified war on terror?
    i love your ignorance.. stop being so self centered and look what your goverment is doing to satisfy corporate agendas on the chase for world dominance over energy and global control.
  • Two seperate issues: one has to do with national security and a nuclear threat, the other with private firms stealing IP from other firms and underminding the economy.  How you linked those is beyond me, nor do I see it as a justifiable excuse for what China is doing. 
  • they are both under the terrorist and espionage laws.
    difference is that one was provoked from the usa and the other towards usa.
    you cant justify one action as moral and the other not since both of them involve deeping hands into other countries bussines.
    i dont agree with any of it. its just stupid for you to get all patriotic when the U.S. are doing the exact same thing under the cover of "war against terror"
  • Excellent argument fatdata. The hypocrisy & double standards of these yanks is beyond belief.
  • You're both fucking daft. We're not being hypocritical about the issue because IT IS NOT RELEVANT. We're talking about Windows Phone here, not general foreign policy.  Get your act together, fellas because you're failing to impress. And me get "patriotic"? You obviously no nothing of my politics, like absolutely nothing to say something so ridiculous.  Take pot shots at the US, fine...whatever. But don't try an link Iran-US relations to freaking Windows Phone news.
  • Eliminating a nuclear strike trumps stealing technology imo. Although, china steals a ton of tech...
  • I am curious, would you like it if we just allowed Iran to build a nuclear program and have missiles that could strike anywhere in Europe?  Because I am pretty positive that there are other Security Counsel Member nations on the UN and they don't want that.  And why does everyone blame the US for things they don't control, for someone who is complaining about another person's ignorance, you are pretty ignorant yourself.  To spout off an extreme view that everything is controlled by corporate agendas is crazy.  If we wanted all the oil we would have just taken it, who is going to stop us honestly.  These extreme mentality is getting old.  Everything is insanely complex with technology and globalization.  Try to consider all the outcomes and factors that go into making even simple decisions.  Seriously try it, because we did it in many of my political science seminars and it's damn near impossible to get people to agree on what we should do.  A lot of thought goes into policy making whether you like it or not, there is no evil dictatory pulling the strings behind the curtain.  No conpiracy theories please.
  • The thing is Huawei also make the towers that are used by Wind Mobile.  These are AWS HSPA so maybey T-Mobile use them as well.  I know we also have Mobilicity here in Vancouver on the same bands but I beleive they use Ericcson towers.
    It would certainly be a security threat if they had a back door into conversations of high level people.
  • That's true. It's actually surprising most people here never heard about Huawei, they're major players with data centre network appliances, they just started with consumer electronics, and I doubt US government is worried with smartphones (lol), they most likely worried with ISP's using their devices.
  • Freakin Chinese shit. They have a BAD history of being caught stealing from the US. I don't know why we keep borrowing money from them??? Did you know all the interest on the debt (95% or so GDP of debt BTW) we owe to the Chinese is funding their new super military???? The Chinese are stealing secrets that threaten national security, they are stealing IP of businesses, and lending us money we will never be able to pay back under our current socialist/entitlement type of government. On top of that, they manufacture almost all things made by man!!! Which means they have most if not all our secrets right there. After all how can you make something without knowing how it works??? I HOPE TO GOD OBAMA LOSES . WE CANNOT AFFORD THIS CRAP ANYMORE!!!!!!!!!!!!!!!
  • Bet you like your devices cheap, don't you. Just take a wild guess how much would cost a iPhone or an Xbox if they weren't made in China. And it's not a matter or left or right wing, capital has no nationality, it seeks profit not dogmas.
  • Wow I didn't know US corporations just started going to China in 2008-9. Or the US government started borrowing from China in 2008-9. That is amazing propaganda you are spreading. I am sure if you researched you would find a lot of US corporations are leaving China for other Asian companies where the labor cost less and the governments don't have a stranglehold on everything. The current President has done plenty good and bad. Why don't you go research those actions and then come back informed instead of spilling all that diarrhea from your brain through the keyboard.
  • It's a FACT that Obama has outspent the last 4 presidents!!!! HOW CAN THAT BE GOOD????  We are spending money that we are FAR from having!!!! OBAMA IS GOING TO DRIVE THE BUS OFF THE CLIFF.

  • MS has a patent on backdooring Skype and other VoIP apps...
  • Is that illegal, to hold a patent? No. So not relevant. If you have evidence that MS is doing something with that technology, then speak up. Otherwise, I'll just ignore this as "poor internet arguments".
  • Where is Liberty Prime when you need him???
  • I have to agree, I'm surprised so many companies are willing to put up with China's rampant IP theft.  I guess profits trumps anything they do wrong.  I remeber talking to a hong kong businessman that owned a ton of factories and was in the process of selling them.  He mentioned to me that the Chinese government essentially has control over everything and that the risk that business man take is enormous because technically if you don't have connections and don't maintain those connections you could just up and loss everything in practically one day.  I don't have charts or serious hard data to back that up, but it did wake me up that there are significant risks you take when investing in China.  Just take for example all Chinese companies that sometimes result in enormous profits and go bankrupt the following year.  Considering all I know about China and their hacking programs, I wouldn't doubt that they would do something of the sort in the Intellectual Property Rights department.  Place malicious codes everywhere and just flat out hack everything since it will be easy with the backdoors in place.  Pretty scary stuff, not to mention they just censor everything and their mother with the Great Red Firewall program.  When you really get down to thinking it is very very scary stuff.
  • Here's an article on the concerns/accusations as well: