Honor is Huawei’s sub-brand that focuses on launching cheaper smartphones compared to its parent brand. The relationship between both firms is similar to what we see between Xiaomi and Redmi or between OPPO and Realme. This looks like it could come to an end, as Huawei is reportedly planning to sell its Honor budget phone sub-brand. Also Read - Let our firms take part in 5G trials, China tells India
Huawei will sell its Honor sub-brand
Reportedly, the Honor sale deal would be carried out for a price of 100 billion yuan (approximately 15.2 billion US dollars). Those involved in the purchase would be the conglomerate Digital China Group and the local government of the brand’s hometown of Shenzhen. Also Read - Samsung takes lead from Apple in Q1 2021 smartphone shipments: Canalys
Previously, the possibility that the conglomerate Digital China Group was one of the potential buyers of the subsidiary Honor had been reported. Now, a new report has arrived from Reuters, which states that the Chinese giant plans to sell its sub-brand for a large sum to the local government and others. Also Read - Huawei to launch 3 affordable foldable smartphones in 2021: Report
The reason for the decision to sell Honor
For those unaware, Huawei was apparently looking to sell its Honor segment as it has faced various supply limitations due to trade restrictions from the United States. As a result, the brand has lost its chip supply, and having a budget-oriented lineup would also put further pressure on its already shrinking inventory of available hardware.
This report also comes in the middle of the election process for the US Presidency, which appears to have a change of leadership. Although the change of government in the United States takes place, Huawei remains skeptical and does not expect any imminent change in policy that is favorable to its position.
In other words, accusations pointing to the Chinese giant as a possible security risk could still persist despite Joe Biden taking over the US government. The transaction is said to be “all cash” and will include nearly all of Honor’s assets, brands, research and development capabilities, and even supply chain management.