HUAWEI CEO calls AT&T deal breakdown "a big loss for consumers"

Huawei’s CEO of consumer products division, Richard Yu, took to the CES 2018 stage yesterday to discuss the launch of its latest smartphones — the Mate 10 Pro and Porsche Design Mate 10 — in the US. This was set to be something of a momentous occasion for HUAWEI, which had managed to secure AT&T as a launch carrier for the devices, after previously selling phones in the US unlocked only.

As you might already know, this didn’t pan out like HUAWEI had hoped, as AT&T pulled the plug on the deal at the last minute, putting HUAWEI in a difficult spot. Richard Yu carried on with the launch of the devices (carrier-unlocked) in the US all the same, waiting until the end of his CES keynote speech to touch on the sore subject of the AT&T deal.

“Everybody knows that in the US market that over 90 percent of smartphones are sold by carrier channels,” Yu said. “[The canceled deal is] a big loss for us, and also for carriers, but the more big loss is for consumers, because consumers don’t have the best choice.”

According to a report from The Information [paywall], the reason for the AT&T cancellation apparently stemmed from concerns over its ties to the Chinese government — something that has haunted HUAWEI for some time. A recent letter sent to the FCC from the US Senate and House intelligence committees allegedly raised “fresh concerns” about the HUAWEI/AT&T partnership, putting pressure on the carrier to bow out.

Without going into too many details, Yu addressed concerns over its security on stage, stating that HUAWEI had already won the trust of carriers in China, Japan, Europe and emerging markets. “We are serving over 70 million people worldwide,” he said. “We’ve proved our quality, we’ve proved our privacy and security protection.”

Yu also discussed matters of a more personal nature, how far the business had come since he started working for it 25 years ago, and how, in the last six years, he had taken the mobile division from relative obscurity to the third biggest smartphone manufacturer in the world. But it seems, for the time being, HUAWEI’s US expansion plans are at a standstill.

There was hope for HUAWEI from a deal with Verizon, which was set to roll out the Mate 10 in the summer, but Android Police says this too is unlikely to go ahead. Citing one of its sources, Android Police said that Verizon is now under the same pressure as AT&T to cut its HUAWEI ties.

With the majority of consumers still picking up devices from carriers in the US, this could have been huge for HUAWEI — not just for short-term sales of these handsets (which, honestly, would probably amount to nothing more than a drop in the ocean for HUAWEI) — but for making inroads to the massive market.

With an ambition of being the number one global smartphone manufacturer within the next three years and beating Apple to the number two spot by the end of this year, US carrier backing would have gone a long way to helping the Chinese manufacturer. And, sadly for HUAWEI, the chances of that just went down dramatically.

The Verge has a video of the moment that Yu made the statements above over on its site, if you want to check it out, and you can give us your thoughts on this situation in the comments.