Huawei is in talks to sell part of its Honor smartphone unit

U.S. sanctions against Huawei mean the company’s smartphone business has suffered badly. Between the crippled in-house chipset division and the lack of Google support, it’s becoming increasingly difficult for the company to keep making phones.

However, these problems also extend to the Honor sub-brand Reuters It is now reported that Huawei is in talks to sell portions of the Honor business, potentially worth up to 25 billion yuan (~ $ 3.7 billion).

The report, which cited “persons with knowledge of the matter” alleges that Honor’s brand, research and development infrastructure and related supply chain management business could be sold under the contract. However, the Newswire sources warn that this is not yet complete.

It is believed that Huawei will focus on high-end phones due to US sanctions. The honor is traditionally aimed at young and / or budget conscious consumers.

Then who would honor Huawei?

Reuters reports that Honor phone retailer Digital China is seen as the frontrunner for the deal. However, the Newswire adds that TCL and Xiaomi are also in the running.

Selling any portion of Honor to another company theoretically means that US penalties will not apply to Honor-branded devices manufactured under this agreement. However, it is not immediately clear what this would mean for Honor devices released prior to a sale.

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In addition, there is no guarantee that the U.S. government will not simply play blow after blow and impose sanctions on companies that acquire part of Honor. Huawei and Honor are intertwined in various ways, especially when it comes to components used and research and development. Hence, in this regard, removing large chunks of the sub-brand from its parent company will likely be a major challenge.

We asked Huawei and Xiaomi for a comment on an obvious honor sale and will update the article if they get back to us. Do you think selling Honor is a good idea for Huawei? Take our poll near the top of the page!

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