The Arrest of Huawei’s CFO Might Have Dire Consequences for Apple

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Meng Wanzhou, Huawei’s Chief Financial Officer, was arrested in Canada earlier this month at the behest of U.S. authorities — and some are predicting that it could have dire consequences for Apple.

Meng was arrested on suspicion of breaching U.S. sanctions on Iran, CNN reported.

U.S. authorities allege that Meng had helped Huawei bypass those sanctions by stating that a Huawei subsidiary was, in fact, a separate company, according to Canadian prosecutors.

On the surface, the story doesn’t seem like it has much to do with Apple. But the arrest of Meng may be seen by Chinese officials as just another volley in a supposed U.S. campaign against Huawei.

You only need to look at some recent headlines from state-backed news outlet The Global Times to see how the Chinese government feels about the situation.

As the BBC points out, one Global Times headline states that “Washington’s move to stifle Huawei will undermine itself” — adding that “banning Chinese competitors like Huawei will isolate US from digital economy of the future.”

Another Global Times story used Meng’s arrest as evidence that “some Western countries are resorting to political means to resist Huawei’s attempts to enter into their markets.”

Huawei has been effectively blocked by the U.S. government from gaining any sort of significant market share in the country.

Earlier this year, law enforcement and intelligence agencies warned American consumers not to buy devices made by Huawei or other Chinese smartphone manufacturers. In August, the U.S. government banned federal agencies from using devices made by Huawei or ZTE.

The chief concern among U.S. authorities seems to be that Huawei devices could be used as spying or espionage tools by the Chinese government, given the close relationship between Beijing and Huawei.

But because of it, many market analysts are predicting retaliatory attacks against U.S. technology companies — and Apple is a prime target.

Wedbush analyst Dan Ives, for example, told the BBC that Apple must feel like it has a “bullseye” on its back. He added that the altercation could significantly impact replacement demand for Apple’s iPhones.

More than that, Ives said that Meng’s arrest may end up being the “straw that could break the camel’s back” as it continues to stoke a tense rivalry between China and the U.S.

Some Chinese companies are reportedly urging their employees to swap their iPhones for Huawei or other Chinese-produced devices. Additionally, some members of the Chinese community in Vancouver, Canada are holding protests and telling news outlets that they feel like the U.S. is bullying Huawei — and China.

The news also comes at a particularly precarious time for Apple in China. Just this week, Chinese courts granted Qualcomm an import ban against most iPhone models running iOS 11 after they ruled that Apple violated two of the chipmaker’s patents.

Huawei, which recently surpassed Apple as the world’s second largest smartphone manufacturer, stated that “it was not aware of any wrongdoing by Ms. Meng.”

In a statement, the OEM also said it has “every confidence that the Canadian and US legal systems will reach the right conclusion.”

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