Move is aimed at maintaining access to vital supply chain
TAIPEI — Huawei Technologies said on Tuesday it will sell its Honor smartphone business to a consortium of more than 30 companies, acknowledging that the budget brand needed help to maintain access to vital components and supplies amid a U.S. crackdown.
Huawei, China’s largest smartphone maker, said it will sell all its Honor assets to a newly formed entity dubbed Shenzhen Zhixin New Information Technology Co., Ltd. Huawei will “not hold any shares or be involved in any business management or decision-making activities” once the sale is complete.
The consortium of buyers includes agents and dealers of the Honor brand, as well as many Shenzhen government-backed entities and e-commerce platform Sunning.com Group. China Telling Telecom, a distributor for Huawei, Samsung and Apple smartphones, is also among the buyers. No value was given for the sale.
The disposal makes Honor the first visible casualty within Huawei, the world’s second-biggest smartphone maker, since the latest Washington restrictions on the Chinese company took effect on Sept. 15, severing its access to key global suppliers.
Huawei admitted the difficulties the business was facing. “Huawei’s consumer business has been under tremendous pressure as of late. This has been due to a persistent unavailability of technical elements needed for our mobile phone business,” the company said.