In 2018, Huawei was well on the way to becoming the new global leader in the smartphone market ahead of Samsung. However, the sanctions announced by the US in 2019 and then in 2020 significantly reduce the manufacturer’s chances of being number one.
As a reminder, the Trump administration initially prevented US companies from doing business with Huawei. As a result, the manufacturer could not access the Google license and pre-install the Mountain View applications on its devices. . Then, this year, Washington announced new sanctions targeting the supply chain.
Essentially, companies outside of the US using US technology or equipment must apply for a license now if they want to continue to supply Huawei. Because of this, it is more difficult for Huawei to stock up on processors, cameras, displays, etc. for his new devices.
The Honor brand could avoid sanctions if Huawei sells it
For some time now there have been rumors that Huawei could sell its Honor brand to another company. Xiaomi was even mentioned among potential buyers.
And today it becomes clearer. According to a Reuters article quoting sources familiar with the matter, Huawei could sell the Honor brand for 100 billion yuan, or the equivalent of $ 15.2 billion. However, the acquirer would not be a manufacturer called Xiaomi, but a Chinese consortium.
According to Reuters, this consortium should consist of the distributor Digital China and at least investment companies funded by the Shenzhen government. The acquisition would include the Honor brand, R&D, and supply chain management. The deal could be formalized as early as this week.
The Honor brand, which no longer belongs to Huawei, was able to evade the restrictions of the US sanctions. And the consortium is already considering an IPO after three years.
Huawei: new strategy despite the election of Joe Biden?
For its part, Huawei has reportedly decided to sell the Honor brand as the Chinese group changed its strategy following the US sanctions. From now on, the Chinese giant would focus on premium smartphones like the Mate 40 Pro and therefore no longer need its Honor brand.
Nevertheless, Honor would have a share of 26% of the 51.7 million smartphones that Huawei shipped between July and September 2020.
Otherwise, the fact that Huawei could continue selling Honor despite the change in administration in the US signals that the Chinese manufacturer does not believe this will have a positive impact on its situation.
But for now, all of this information needs to be viewed with caution pending an official announcement from Huawei. Otherwise it should be noted that there has also been good news for the manufacturer lately. Rumor has it that Sony has obtained the license to continue supplying cameras to Huawei.