AUS
NZ
UK
CA
USA
IND
Summary
- The recent lifting of the ban by the US Defence Department – a ruling that it had been waiting for some time - has raised the bar for its annual target.
- Consumer sentiments towards the company are likely to improve from the decision, which will help increase its earnings in the US market.
- The Defense Department had designated Xiaomi as the 'Chinese Military Company' after the relations between the US and the Chinese governments hit a new low last year.
Smartphone maker Xiaomi Corp. is expected to launch several models from its stable later this year. Many of them could be from its highly successful Mi series.
The recent lifting of the ban by the US Defence Department – a ruling that it had been waiting for some time - has raised the bar for its annual targets.
Xiaomi develops an array of products, from TVs, fitness trackers to air purifiers, besides phones. It had launched the K40 Gaming Edition with a huge 6.67-inch touchscreen display last month.
In a significant decision this week, the Biden administration revoked the ban on Xiaomi. It means that the case against Xiaomi now stands closed.
Consumer sentiments towards the company are likely to improve from this decision, which will enhance their earnings in the US market. Its share prices were up 6.10% at the close of the Hong Kong Exchange on Wednesday, following the decision.
Also Read: Renewables Get A Jumpstart After Biden’s US$2.8bn Wind Project
The blacklisting had prevented US investors from investing in the company. Although the two sides have not revealed the details of their talks that led to the breakthrough, people familiar with the development say that a deal has been reached. It will allow Xiaomi to resume operations in the US.
Pic Credit: Pixabay.
Also Read: Tesla Eyes Entry Into Multimillion-Dollar US Renewable Market
The Ban
The Defense Department had designated Xiaomi as the 'Communist Chinese Military Company' after the relations between the US and the Chinese government hit a new low last year.
Besides Xiaomi, several other Chinese tech companies were banned by the then Trump administration. In response, Xiaomi, the world's third-largest smartphone maker, had filed a suit in a US court against the decision urging it to put a stay order on the case, which it did.
Also Read: 3 Technology Stocks To Buy on Wall Street
In its verdict, the court noted that it was necessary to avoid 'irreparable harm' to the company as the litigation progresses. Xiaomi is currently in talks to permanently remove the tag.
Co-founded in 2010 by Chinese entrepreneur Lei Jun and Qualcomm Inc., Xiaomi's smartphones have been a huge hit in the US. The company had reported robust sales in the fiscal third quarter. Its key backers include BlackRock Inc. and Vanguard Group.
Also Read: Bears grip APAC markets on inflation woes
