Huawei ditches budget phone brand after U.S. cuts chip supply

Alonzo Simpson
November 17, 2020

At a hard time when industrial technology elements are unsustainable and consumer businesses are under tremendous pressure, in order to allow Honor channels and suppliers to continue, Huawei Investment Holding Co., Ltd. chose to sell the entire Honor business assets.

The new owner of the Honor brand was born from a consortium of over 30 agents and dealers of the Honor brand and the Shenzhen Smart City Development Group Co.

No figure for the deal was given in the statement. The deal will create an entirely new company for Honor, Shenzhen Zhixin New Information Technology, with Huawei having no shares or ownership. Shenzhen-based Huawei is said to have safeguarded its core telecom equipment business by stockpiling critical components to continue supplying its home country's 5G rollout through at least 2021. The buyers are a group of 40 Chinese companies that include Honor retailers. Since its establishment, it has been a relatively independent unit under Huawei, and it has no stake in the global 5G competition, according to analysts.

Huawei to sell Honor brand to consortium of agents and dealers in bid to save supply chain
Huawei ditches budget phone brand after US cuts chip supply

It's unclear if the Honor spin-off would lead to an automatic resumption of American chip supply to its new owners.

Earlier this month, it was reported that Huawei was looking to sell its budget sub-brand Honor to a consortium, potentially saving Honor from the various trade embargoes placed on its parent company.

Huawei lost major chip and software suppliers after the USA government slapped trade sanctions on the telecoms equipment and smartphone giant. "New Honor" will oversee resources, branding, production, distribution, services, operations, and executive decisions. The most expensive Huawei phones go for as much as 17,000 yuan - surpassing the most expensive iPhone 12 Pro Max.

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