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It’s official, Huawei sells its Honor brand to survive

A few days ago, a report delivered by . indicated that Huawei would be about to sell its Honor smartphone unit for about 100 billion yuan, that is, the equivalent of about 15.2 billion dollars.

At that time, the report indicated that this movement was a response to maintain the business of the technology firm in the face of the veto that it has suffered for months in North American territory, where the company has found obstacles to source chips for these devices.

Thus, it was anticipated that Huawei would be seeking to focus on operations related to high-cost equipment as well as its corporate units.

Now, this information has been confirmed and through an official statement, Huawei confirmed that has decided to sell its Honor brand and all assets related to it with the intention of “guaranteeing its survival”.

In this way, the new owner of this business unit would be Shenzhen Zhixin New Information Technology, same that is composed of more than 30 partners of the company.

“When the sale is completed, Huawei will not retain any action or be involved in business management activities or decision-making in the new Honor company,” the document sent by the firm reads.

So far, the amount behind this transaction has not been disclosed, nor have any details been given about the time window they manage to complete the transfer of the company to Shenzhen Zhixin New Information Technology, the new owners.

However, what the Chinese giant has recognized is that right now it is under “tremendous pressure” due to “the unavailability of technical elements necessary for our mobile telephony business”, a situation that is the result of successive and different vetoes that have been imposed by the United States government.

With this in mind, since the middle of last year, Huawei has had to find a way to circumvent these commercial restrictions, in which the launch of its own operating system (given the impossibility of continuing to work with Google) has been one of the most obvious.

This situation has left Huawei at a clear competitive disadvantage with companies such as Apple or Samsung, which has led to more drastic decisions such as the sale of Honor.

And it is that under the support of Shenzhen Zhixin New Information, it is possible that this brand could reach an agreement with companies such as Qualcomm or Google, at least those are the intentions that are seen in the statement issued a few hours ago by Huawei.

The truth is that although Huawei is emerging from one of its most emblematic units, the reality is that a business is emerging that has seen slow growth in recent years.

According to Statista, the lowest-cost smartphones are actually the ones that sell the fewest units globally. Not only that, but (contrary to their higher-priced counterparts) they have been losing importance since 2015. So Huawei could very well come out of this deal, leaving behind the ballast of this unit.

In this way, before weakening with this sale, Huawei could be challenging with greater resources and focus a business that now seems dominated by Samsung and Apple. The truth is that this will depend on the adoption of its own operating system that, with a few months in the market officially, registers a slow advance.