Huawei would consider selling part of its Honor subsidiary. Under pressure, the Chinese group has reportedly recently come into contact with several potential buyers, including Xiaomi and TCL.
A few days ago, the famous analyst Ming-Chi Kuo claimed that Huawei was considering getting rid of the Honor division. Under U.S. sanctions, the Chinese group is reportedly looking for buyers for its mid-range smartphone subsidiary. “If Honor becomes independent of Huawei, component purchases will no longer be subject to U.S. rules,” Ming-Chi Kuo said. For example, Honor could get qualcomm, Mediatek and TSMC engraved chipsets. On Sina Weibo, the Chinese social network, employees quickly stepped up to the plate to deny the analyst’s information.
Despite the employees’ assertions, our Reuters colleagues claim that Huawei is currently in negotiations with several players with the aim of divesting part of its business, including the Honor subsidiary. According to the media, Huawei is ready to part with the Honor brand, its research and development laboratories and its supply chain management business. The deal could bring in up to 25 billion yuan, or $3.7 billion,for Huawei. An easy profit not negligible in the face of the imminent collapse of its sales. From next year, sales of Huawei phones are expected to tumble by more than 70%, relegating the firm to 7th place among the world’s largest sellers.
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Huawei would now focus on high-end smartphones, farewell Honor?
Companies interested in a takeover include Digital China,the leading distributor of Honor smartphones in China, Chinese manufacturer TCL and Xiaomi. With a view to a takeover by Xiaomi, one imagines that Honor could come to inflate the ranks of brands already owned by the Chinese Apple, among them Poco and Redmi. Xiaomi would thus establish its position in the mid-range market.
Accused by the restrictions of the Trump administration, Huawei reportedly decided to focus on the production of high-end smartphones. As part of this new strategy, the group would promote Harmony OS, its alternative mobile operating system to Android. Since its inception in 2013, Honor has always focused on creating mid-range phones for the youngest. The brand is particularly popular with Chinese teenagers who are fond of selfies. After Huawei’s shift to premium, the subsidiary would no longer have a place at its parent company, a source close to the matter told Reuters.
For now, the takeover of Honor is still in the negotiation stage. It is not known where the discussions between the various players are. We’ll tell you more as soon as possible about this possible takeover. While you’re waiting for more information, please comment in the comments below.
Source: Reuters
