Another week, another set of twists and turns for Huawei.
What seemed like the long-awaited ‘smoking gun’ came and quickly went on Tuesday, and later the same day the latest set of global smartphone sales numbers showed the firm’s growth trajectory now has Samsung firmly in its sights. It has already left Apple behind.
On Tuesday, Bloomberg reported that “Vodafone [had] acknowledged that it found vulnerabilities going back years with equipment supplied by Huawei for the carrier’s Italian business.” Bloomberg said that “hidden backdoors in software could have given Huawei unauthorized access to the carrier’s fixed-line network in Italy, a system that provides internet service to millions of homes and businesses,” and that the same vulnerabilities “were also found in the U.K., Germany, Spain and Portugal.”
I covered the claims and also that Huawei told me that “the story published by Bloomberg is misleading. It refers to a maintenance and diagnostic function, common across the industry, as well as vulnerabilities, which were corrected over seven years ago. There is absolutely no truth in the suggestion that Huawei conceals backdoors in its equipment.”
And the turns…
Later in the day, both Huawei and Vodafone explained that the vulnerability was actually Telnet.
Huawei said in a statement that “we were made aware of historical vulnerabilities in 2011 and 2012 and they were addressed at the time. Software vulnerabilities are an industry-wide challenge. Like every ICT vendor, we have a well-established public notification and patching process, and when a vulnerability is identified, we work closely with our partners to take the appropriate corrective action.”
A Vodafone spokesperson supported this, explaining that “the ‘backdoor’ that Bloomberg refers to is Telnet, which is a protocol that is commonly used by many vendors in the industry for performing diagnostic functions. It would not have been accessible from the internet. Bloomberg is incorrect in saying that this ‘could have given Huawei unauthorized access to the carrier’s fixed-line network in Italy’.”
The Vodafone spokesperson added that there was no evidence of unauthorized access, “this was nothing more than a failure to remove a diagnostic function after development. The issues were identified by independent security testing, initiated by Vodafone as part of our routine security measures, and fixed at the time by Huawei.”
The timing of the story, coming as the U.K. wrestled with the backlash against its leaked decision to include Huawei in its 5G network plans, even as it investigated the source of the leak, is not a coincidence. On Tuesday it was also reported that the U.S. summoned major British telecoms carriers to its London embassy to issue direct warnings on their continued use of Huawei.
“We are right to have a degree of caution about the role of large Chinese companies,” Britain’s Foreign Secretary had warned in Monday’s Telegraph, “because of the degree of control the Chinese state is able to exercise over them in the way that would not be possible if they were large Western companies.”
And the midweek high
Huawei’s week brightened considerably, though, with the news from IDC in their Q1 Smartphone Shipment release that given continued market challenges, “the only highlight from a vendor perspective was Huawei, which made a strong statement by growing volume and share despite market headwinds.”
IDC reported that “Huawei moved its way into a clear number two spot as the only smartphone vendor at the top of the market that saw volumes grow during 1Q19. Impressively, the company had year-over-year growth of 50.3% in 1Q19 with volumes of 59.1 million units and a 19.0% market share. Huawei is now within striking distance of Samsung at the top of the global market.”
There’s work to be done to catch Samsung, and IDC expects “this new ranking of Samsung, Huawei, and Apple is very likely what we’ll see when 2019 is all said and done,” but Huawei has set out to catch Samsung by year-end and has made the perfect start to its year. If the current growth trajectory continued, buoyed by Samsung’s softer sales numbers, it would take the top spot.
So, no change then, on any front.
The allegations against Huawei remain and remain, at least to the industry, unproven. Yes, their software needs serious security work, but alleged nation-state grade backdoors have yet to be found. And so the company continues its battle with Washington, supported by Beijing, and picks up 5G contracts despite U.S. threats over intelligence-sharing arrangements. Meanwhile, the company continues its parallel track of seeking to lead on both network equipment sales and smartphone sales.