Are Cisco, Juniper and other U.S. telecom firms orchestrating the recent backlash against Huawei, ZTE and other Chinese vendors? And if they are, are they only damaging their own opportunities?
The Washington Post ran a story this week that U.S. firms might be behind the Red Menace suspicion currently swirling around Huawei and ZTE. The story said Cisco has been circulating a marketing document to customers designed to whip up suspicion and distrust in its Chinese rival.
There's also a report from China quoting "a respected observer of the telecom industry" saying Cisco may be behind the Congressional investigations and reports warning U.S. companies not to deal with Huawei and ZTE. That report claims Cisco and other U.S. telecom vendors have motives other than national security as reasons for blocking their large low-price rivals from U.S. entrenchment - though in ZTE's case, Cisco severed ties with its one-time partner due to prohibited sales into Iran; and Cisco's had a long-running beef with Huawei; and Juniper was one of about 34 companies targeted by cyberattacks suspected to have originated in China.
Could it be they want those U.S. sales all to themselves?
Likely. But at what cost?
The Street.com says barring Huawei, ZTE or any other Chinese telecom firm from selling in U.S. customers would give China reason to bare Cisco, Juniper and any U.S. firm from selling into the lucrative China and Asia/Pacific Rim region. This market accounts for about 17% of Cisco's sales and was the fastest growing geographical region for Cisco in its fourth quarter of fiscal 2012. Within that region, China grew that fastest.
So if Cisco, Juniper and/or any other U.S. telecom vendor is behind the current repulsion of Chinese competitors, they might want to be careful what they wish for.
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