Huawei has decided to sell its Honor branch. The sale is meant to prevent Honor from becoming a victim in the US trade ban. The new owner is Shenzhen Zhixin New Information Technology Co.
In a press release, Huawei states that Huawei’s consumer branch has been under enormous pressure lately, as it is becoming increasingly difficult for the company to get the needed parts to build their products. With the sale of the Honor branch, Huawei hopes that Honor’s suppliers and sellers will ‘make it through this difficult time’.
Once the sale is completed, Huawei will no longer hold any shares in Honor. Furthermore, Huawei will also have no more involvement with the decision-making activities within Honor.
Earlier this year, the United States imposed a ban on trading with Huawei, fearing that China is using Huawei equipment to spy on other countries. No concrete evidence for this fear has been provided yet.
It is not completely impossible to trade with Huawei. If a company has a license, it is allowed to do so to a limited extent. For example, Qualcomm was recently licensed to sell 4G chips to Huawei.
However, the supply of parts is apparently too tight for Huawei to be able to build enough phones and the company therefore feels compelled to sell the Honor branch. By doing so, the company hopes that Honor, as it is no longer associated with Huawei, will again be able to purchase the needed parts.
Over the past seven years, Huawei has sold an average of 70 million Honor smartphones per year. It is not known how much money is involved in the sale of Honor. Reuters wrote earlier that Honor is worth about 100 billion yuan (just under 13 billion euros).