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Reuters: Huawei to sell HONOR smartphone business?

In an exclusive, Reuters reports that Huawei is in talks to sell its sub-brand HONOR smartphone business to focus on higher-end Huawei phones.
Huawei and sub-brand HONOR

HONOR to be sold?

Reuters reports that Huawei Technologies Co Ltd is in negotiations with Digital China Group Co Ltd and other possible buyers to sell its HONOR smartphone unit that could be worth up to CNY 25 billion yuan (around PHP 183 billion) due to supply constraints.

The HONOR sub-brand was established in 2013 and mostly works independently from its parent, Huawei.

The report claims that Huawei is resetting its priorities due to the U.S. sanctions placed by the outgoing Trump government. This has resulted in Huawei prioritizing its higher-end smartphones over the HONOR brand that is aimed at younger and more budget-conscious customers.

It is unclear which assets will be sold but it could include HONOR's research and development and supply chain management business.

Digital China is the major distributor of HONOR phones and has become the frontrunner from the list of prospective buyers that include TCL and Xiaomi corporation.

Ming-chi Kuo, an analyst at TF International Securities said that "If HONOR is independent of Huawei, its purchase of components will no longer be subject to the US ban on Huawei. This will help HONOR's smartphone business and the suppliers," in a recent research note last week.

What do you guys think?

Source: Reuters

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