It’s no secret that the past year has been tough for Huawei. While it continues to manoeuvre past hurdles and claim growth, the picture might not be as rosy as it seems. A new report claims that Huawei is actually considering selling off the Honor brand.
The downward spiral started last summer when the Trump administration put Huawei on an entity list, greatly limiting the business it could do with US companies. This led to Huawei losing access to Google’s Android, which forced it to work on its own software implementation in the form of Harmony OS. This was followed by ejections from the WiFi Alliance and the SD Association, preventing the company its chance of shaping the future of these technologies. The next big blow was losing access to ARM’s chipset designs, forcing the production of in-house Kirin SoCs to be brought to a screeching halt. Needless to say, Huawei’s challenges were massive.
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Ming-Chi Kuo, one of the most reliable analysts in the consumer tech space, reports that Huawei is very close to selling off the Honor division. Along with cash, this deal could also help Honor off the aforementioned entity list, if the new owner is based outside of China. If this turns out to be the case, it could regain access to major hardware and software suppliers which were lost due to the trade sanctions.
Huawei dismissed these claims, stating that it remains committed to the Honor brand. However, all the initial reports from China (appended below) have thus been deleted, which could be an indication that Huawei wants to keep a tab on the developments and the coverage around it, as a move of this magnitude could have far-reaching effects. Huawei employees also refuted the claims on Chinese microblogging platform Weibo.
Kuo believes that the sale of the Honor mobile phone business will be a “win-win situation”, not just for the brand, but also for suppliers and China's electronics industry as a whole. Once independent, Honor should also be able to develop higher-end phones and escape Huawei’s shadow in the premium segment.
If the deal works out, Honor will be able to maintain its valuation as well potentially increase its market share in China and other markets. By the looks of it, the sell-off does make sense, but it would also mean that Huawei loses one of its most promising divisions. With the impositions here to stay for the foreseeable future, it remains to be seen how the damages are mitigated.