DRAIN TO THE ARREST OF HUAWEI
CFO REALLY RATTLING MARKET
TODAY.
THE COMPANY OVERTOOK APPLE THIS
YEAR TO BECOME THE SECOND
LARGEST SMARTPHONE SELLER
EVERYWHERE.
TO MARKET WATCH TECH EDITOR
JEREMY.
FIRST OF ALL, DO YOU THINK
HUAWEI IS GUILTY OF ALL THE
UNITED STATES SAYS IT IS?
>> EVERYTHING THE UNITED THEY
THINK THEY'VE DONE.
THEY DEFINITELY HAVE SHADY
BUSINESS PRACTICES.
WE SEE IN THE U.S. CORPORATE
CTE, MAJOR RIVAL.
A LOT OF THE THINGS THAT COME
OUT OF CHINA SAY THEY KNOW THEY
WERE SKIRTING LAWS AND TRYING TO
GET AROUND SOME OF THESE THINGS.
THE QUESTION IS, IS THAT JUST A
PRODUCT OF CHINA, BEING A
CHINESE BUSINESSMAN OR IS HUAWEI
ESPECIALLY CROOKED.
THAT'S WHAT WE'RE GOING TO SEE
NOW.
THAT IS KIND OF WHAT THE U.S.
WANTS TO BRING OUT IN THE OPEN
BY MAKING THIS ARREST.
>> JAN DOING THINGS CROOKED AND
THE ARREST CONCERNS BUSINESS
THAT WE ALLEGE THEY WERE DOING
WITH IRAN AND THAT SHE WAS
DIRECTLY INVOLVED TO NOT SOME
WAY.
WE'VE SOLD OUR ALLIES BEWARE.
THIS IS A COMPANY THAT IS
SOMEHOW ENCRYPTED SOFTWARE IN
WAYS THAT THEY CAN ACTUALLY SPY
ON US IF WE BUY THEIR PHONES.
DO YOU THINK THAT CHARGE BY US
IS EXAGGERATED JUST BECAUSE
THEY'RE SUCH A BIG THREAT TO OUR
BUSINESSES?
>> IT'S HARD TO PROVE BUT WE'VE
SEEN OUR ALLIES DENY TRAINA
LINE -- HUAWEI.
MORE OF THE CONCERN THAN
SMARTPHONES AS THE
TELECOMMUNICATIONS EQUIPMENT
THAT HUAWEI CELLS.
THAT KIND OF NETWORK TRAFFIC AND
VISIBILITY IS REALLY SCARY FOR
WHAT COULD BE DONE WITH IT.
THAT IS THE BIGGER CONCERN.
THE SMARTPHONES WHICH YOU CAN
EVEN BUY IN THE U.S. THROUGH
CARRIERS OR ANYTHING ELSE ARE
NOT REALLY AVAILABLE HERE.
SMARTPHONES ARE MORE FOR THE
ASIAN AND EUROPEAN MARKETS.
DAVID: I REMEMBER BEFORE THE 5G
STUFF WAS TALKED ABOUT BECAME
VISIBLE, WE HAD CONCERNS FROM
THE SECURITY CHIEF SAID THE
UNITED STATES.
I THINK THEY WERE ABOUT A DOZEN
OF THEM, HOMELAND SECURITY,
HEADED THE CIA, ALL OF THEM WERE
THERE.
EVERY SINGLE ONE WAS ASKED BY
THE CONGRESSMAN IF THEY WOULD
BUY A HUAWEI PHONE AND THEY ALL
SAID ABSOLUTELY NOT BECAUSE IT'S
A SECURITY THREAT.
WAS THAT EXAGGERATED OR DO YOU
THINK THEY'RE ONTO SOMETHING?
YOU WOULDN'T TOUCH A PIECE OF
HUAWEI EQUIPMENT.
DAVID: THEY WERE JUST TALKING
ABOUT THEMSELVES.
>> RIGHT, YEAH.
THE SMARTPHONES AREN'T
AVAILABLE.
SO IT'S KIND OF A MOOT QUESTION
AT THIS POINT.
I DON'T THINK ANYONE DOING
ANYTHING SENSITIVE WOULD WANT TO
TOUCH ONE OF THOSE PHONES.
EVEN THOUGH YOU CAN MAYBE GET
THE PHONES NOW IN THE U.S., DATA
PARTNERSHIP WITH IBM NOT LONG
AGO.
I THINK IN THIS ARREST IN HER
ATTITUDE TOWARDS HUAWEI WOULD
PREVENT ANY PARTNERSHIP LIKE
THAT EXISTING IN THE FUTURE.
>> YOU NEVER KNOW.
PTU STILL HAS SOME TIES AS WELL.
THIS IS DEFINITELY A BIG SIGNAL
TO ALL OF U.S. TAX.
YOU NEED TO STOP WORKING WITH
THIS COMPANY, WHICH HAS BEEN A
VERY WEIRD THING TO SEE WHEN
TRUMP BLOCKED BROADBAND FROM
QUALCOMM.
IT WAS A BIG THING BROUGHT UP IN
A DECISION AND THAT SHOULD HAVE
BEEN A CLUE RIGHT THERE AT THE
COMPANIES NEED TO STOP WORKING
WITH HUAWEI BECAUSE THEY ARE
REALLY LOOKING HARD YOU TRAIN TO
DO YOU THINK IT HAS TO SUPPORT
IN DO THINK IT'S A PRIVATE
COMPANY FOR SOMETHING TOTALLY
CONTROLLED BY THE GOVERNMENT OF
CHINA?
>> YOU'RE LOOKING AT SOMETHING
RIGHT THERE IN THE MIDDLE.
THE FOUNDER IS A FORMER ARMY
ENGINEER.
HE IS VERY CLOSE TO THE POWERS
THAT BE IN CHINA.
THAT IS WORRISOME.
YOU SEE ALL THE TECH LEADERS
MEETING WITH PRESIDENT TRUMP
RIGHT NOW INCLUDING THE QUALCOMM
CEO BEATEN BY A THEN ASIAN
COMPANY.
YOU CAN'T TAKE ALL OF THAT, BUT
THERE ARE DEFINITELY TIES THEY
ARE THAT ARE WORRISOME.
I DON'T THINK IT'S COMPLETELY
CONTROLLED BY THE CHINESE
GOVERNMENT, BUT WHERE THAT LINE
IS IS VERY HARD TO SEE LIKE
EVERYTHING IN CHINA.
DAVID: CHINA AGAIN IS A HUGE
COMPANY.
WE TALKED ABOUT IT SELLING MORE
SMARTPHONES THAN APPLE DOES.
CHINA IS NOT GOING TO DISPENSE
WITH THIS COMPANY IN ORDER TO
GET A TRADE DEAL OR ANYTHING
ELSE AT THE UNITED STATES.
THE COMPANY WILL SURVIVE.
THE QUESTION IS CAN SEPARATE THE
BAD STUFF IT DOES FROM THE GOOD
STUFF IT DOES JUST MAKING
PHONES?
>> I TALKED TO FORD EXEC
CLASSMATE WHO SPENT TWO YEARS IN
CHINA AND I BROKE THE NEWS TO
HER AND THE RESPONSE IS HUAWEI
IS CHINA.
WE ARE GOING AFTER THE MAJOR,
MAJOR COMPANY IN CHINA.
THIS IS THE EQUIVALENT OF GE TO
THE U.S. 50 YEARS AGO.
THIS IS A COMPANY REALLY SEEN AS
SYNONYMOUS WITH THAT COUNTRY.
I DON'T THINK WE CAN TAKE IT
DOWN.
BUT WE CAN CERTAINLY HURT THE
GLOBAL NATURE OF HUAWEI
BUSINESS.
TO GROW, TO BE BIGGER THEY HAVE
TO GET TO EUROPE AND AFRICA AND
OTHER CONTINENTS AS WELL.
SO IF WE CAN IMPEDE THAT, BUT