Huawei is in negotiations to sell its Honor smartphone range, according to Reuters sources. This allows it to escape the American trade ban.
The rumour has been circulating for a dozen days, but Reuters is now making it a little more concrete. According to news agency sources, talks are underway with Digital China, Honor’s leading distributor, for a takeover. However, TCL and Xiaomi are also mentioned as possible candidates.
Besides, Huawei would sell the Honor devices for 15 to 25 billion Yuan. Huawei is not formally commenting on the rumour.
Honour has existed since 2013 and focuses mainly on cheaper devices that are primarily available online, also in Belgium. Huawei now that it is under pressure from US trade embargoes would like to focus on its leading brand (Huawei itself), with devices in the higher segment.
Honour sold some 14.6 million devices in the second quarter of this year, accounting for a quarter of Huawei’s total smartphone sales, Reuters said, based on figures from market analyst Canalys. But the margins on cheap phones are lower.
A split-off shouldn’t be too difficult in practice. The Honor and Huawei devices are already entirely separate brands today. An acquisition would include the brand, R&D and supply chain.
An additional bonus for Honor and the new owner is that the brand is no longer subject to US sanctions in the event of a sale. Although Honor remains in Chinese hands, that is less of a problem for the US.