Huawei confirmed last week that it would sell all of its Honor business assets to a new consortium called Shenzhen Zhikin New Information Technology. The decision was made due to increasing pressure, because the youth-oriented smartphone brand is also affected by the restrictions imposed by the American government.
According to Reuters, the founder of the Chinese technology giant, Ren Zhengfei, shared a post at the forum of employees in Huawei, calling on Honor to be Huawei’s biggest competitor after the “divorce”. He said the demolition of Huawei should be their slogan for motivation.
Rehn also said that “Wave after wave of harsh American sanctions against Huawei has led us to finally understand, certain American politicians want to kill us, not just correct us.”
He shared that while Huawei could overcome the difficulties, “millions” of employees in Honor’s agents and distributors around the world will lose their jobs as the sales channels have dried up. He said, “We don’t have to drag innocent people into the water just because we suffer.”
Honor smartphones were reported to contribute 26% of the total 51.7 million smartphones that Huawei shipped in Q3 2020, based on Canalis data. In addition to smartphones, Honor also manufactures laptops, portable devices and smart IoT devices that include Smart TV.
As Huawei rejects its interest in Honor, the youth-oriented brand is expected to regain official access to software and services from U.S. companies that include Google Mobile Services. As a completely independent brand, Honor could produce new 5G phones with Qualcomm and MediaTek chips.
However, it remains to be seen how quickly this transition will occur as Honor’s current supply chain is closely tied to Huawei from production to distribution. With a new consortium of over 30 agents and dealers taking control of the Honor brand, they would probably face the difficult task of convincing U.S. authorities that it is no longer connected to Huawei and does not pose a threat to U.S. national security.
With the change of administration in the United States, there is a glimmer of hope that the restrictions for Huawei may gradually ease. It was recently announced that Qualcomm was allowed to sell selected mobile chips to Huawei without 5G. Samsung Display has also received permission from the US government to deliver its panels to Huawei. It is interesting that this does not affect the business of Huawei and Honor laptops, because they could continue to produce Intel and AMD machines with Microsoft Windows pre-installed.[ SOURCE ]