Sanctions are taking a toll on Huawei as it reportedly looks to sell Honor

Summary List Placement

Huawei, the top smartphone maker in the world by shipments, is reportedly looking to sell its budget smartphone brand Honor, according to Reuters. Anonymous sources familiar with the matter told Reuters that the deal could be worth 15–25 billion yuan ($2.3–3.7 billion). Huawei’s competitor Xiaomi is believed to be among the bidders, as are electronics distributor Digital China and smartphone manufacturer TCL. Huawei shipped 55.8 million smartphones globally in Q2 2020, 26% of which were sold under the Honor brand, per Canalys.

Honor could be better positioned for growth split off from Huawei, since separation may reduce its exposure to trade restrictions. Huawei isn’t short on cash or funding, so the Honor deal likely isn’t motivated by a desire for liquidity. Instead, Huawei may be motivated by a desire to free Honor of the geopolitical baggage that comes with operating under the Huawei umbrella. Since Huawei’s telecom equipment has become a lightning rod for US-China trade tensions, Huawei is subject to more intense international trade restrictions than any other China-based smartphone brand.

As a spun-off company, Honor stands a better chance than Huawei …read more

Source:: Businessinsider – Tech


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