ZTE Is No Longer Making Phones

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Less than a month since ZTE was hit with a ban from the U.S. government, the company has shut down production.

Well, that didn’t take long. Less than a month since ZTE was hit with a ban from the U.S. government, the Shenzhen, China-based telecommunications firm has just confirmed it has ceased "major operating activities."

The ZTE Blade V9 and Blade V9 Vita, two of the company's newest budget phones expected to debut in the U.S. later this year, may now never see release.

The ZTE Blade V9 and Blade V9 Vita, two of the company's newest budget phones expected to debut in the U.S. later this year, may now never see release.

A visit to ZTE’s global site for devices redirects users to the corporate portal, although at the time of writing the U.S. site is still functioning normally, with links to buy phones through carrier partners.

MORE: Moto Now Owns the Budget Phone Market — And That's a Problem

While ZTE has evidently halted production for the time being, the company is actively talking to the U.S. government to “facilitate the modification or reversal” of the ban, according to the statement. ZTE says it is nevertheless financially stable and will continue to uphold its commercial obligations in the meantime.

Today’s news is the latest in a saga dating back to March 2017, when ZTE was discovered to have been illegally exporting products containing U.S.-sourced components to Iran and North Korea. The telecom giant was forced to pay more than $800 million in penalties for that transgression, and was directed to rebuke all personnel responsible as part of its plea deal.

That brings to last month, when a U.S. Department of Commerce investigation found that ZTE retained all of those employees and paid them bonuses. In response, the U.S. government served the company with a ban, forbidding it to use any U.S.-sourced technology in its products for seven years.

ZTE responded by calling the ban unfair, saying it was delivered “before the completion of the investigation of facts.” The company added that the “Denial Order will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE including a large number of U.S. companies.”

ZTE, which uses Qualcomm processors in many of its phones and exclusively employs Google’s Android operating system and apps, indeed relies on U.S. companies to a significant degree. Sales through U.S. prepaid cellular carriers, such as T-Mobile and Boost Mobile, are also responsible for a major portion of its business. Spokespeople from both networks declined to comment on today's announcement when we reached out. Tom's Guide has also contacted ZTE, and will report back as soon as we hear anything.

Photo Credit: Shaun Lucas/Tom's Guide

Adam Ismail

Adam Ismail is a staff writer at Jalopnik and previously worked on Tom's Guide covering smartphones, car tech and gaming. His love for all things mobile began with the original Motorola Droid; since then he’s owned a variety of Android and iOS-powered handsets, refusing to stay loyal to one platform. His work has also appeared on Digital Trends and GTPlanet. When he’s not fiddling with the latest devices, he’s at an indie pop show, recording a podcast or playing Sega Dreamcast.

2 Comments Comment from the forums
  • thunderdan602
    Funny. Guess selling phones in-country is not profitable enough? Lol
    Reply
  • joeyragul
    Learn to read and comprehend first, before casting a judgement.

    US ban America-owned companies from selling phone components to ZTE.

    Thus they couldn't create phones without Android from Google, and other semiconductor parts from US companies. Effectively starving them of needed production supplies; which means they can't create phones.
    Reply