The Huawei consumer business has been under “tremendous pressure”
Huawei has confirmed that it has made an agreement to sell its consumer smartphone brand Honor and related business, in a move that has been hinted at since continued U.S. trade restrictions have put substantial constraints on the Chinese telecom vendor. While financial details have not yet been disclosed, Chinese media groups have reported that is the buyer is Shenzhen Zhixin New Information Technology Co., a company controlled by Shenzhen Smart City Development Group.
The Honor brand was launched in 2013 with focus on the mid-range and lower-end of the handset market. The brand reportedly ships more than 70 million units annually, while the Huawei group as a whole completed 240 million total shipments last year.
As a result of the U.S. sanctions against it, Huawei’s consumer business has struggled to secure critical handset components, primary chipsets, putting the company under “tremendous pressure.”
The transaction should create a supply chain for Huawei by supporting local dealers and sellers in China, so that it does not have to rely as heavily on international suppliers.
Huawei, however, did receive some good news recently when the U.S. government granted permission for Qualcomm to sell 4G handset chips to the Chinese company. Further, Qualcomm is not the only company interested in exemption from the ban. According to Caixin Global, Micron Technology, Samsung, SK Hynix, Macronix International and Chinese chip company Semiconductor Manufacturing International Corp. also submitted applications to be waived from the new restrictions.
In fact, Qualcomm isn’t even the first company to have their exemption approved. In September, the same month that restrictions were put into place, Intel was granted a license to continue supplying to Huawei.