Chinese telecoms giant Huawei has sold its Honor sub-brand of mobile phones. Honor had been a way for Huawei to create lower cost cellphones to appeal to a younger audience, but has now been forced into selling off its favorite child due to what it calls the "tremendous pressure" it has been facing this year in its consumer business. It cites the "persistent unavailability of technical elements" for its mobile phones as the key issue for selling off the seven-year old brand.
In addition to the global pandemic, Huawei has had the challenge of sanctions imposed by the US government – which has led amongst other things to Huawei phones not being able to use the latest versions of the Google Android operating system,
Huawei is selling the Honor business assets to Shenzhen Zhixin New Information Technology Co., Ltd – a new company that is being set up by a consortium existing Honor distributors and suppliers. Honor sells over 70 million phones around the world each year.
“There has been endless speculation that Huawei would divest Honor, so it is an important step that this is now official", comments Ben Wood from analysts CCS Insight. "However, at this stage there is a distinct lack of detail on the next steps making it hard to understand what direction the new business will take and how it will recover? We assume that the goal will be for the new independent company to re-establish ties with Google and component suppliers
“It seems Huawei had few others options other than closing or divesting the Honor division given the punitive sanctions imposed by the US administration. This is underlined by the comment in the press statement that this was ‘made by Honor’s industry chain to ensure its own survival.’”
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