The founder of Huawei has hailed the sale of the Honor subsidiary as a clean break for the newly independent company that will allow it to compete with its former parent in the global smartphone market.
A deal to sell the business to a consortium that includes handset distributor Digital China and firms backed by the local government in Shenzhen was agreed earlier this month, with Huawei eager to focus on the high end smartphone segment and free Honor from US sanctions.
Honor was launched by Huawei in 2013 and targets budget-conscious consumers with feature-packed, affordable devices. It competes with other Chinese vendors Oppo, Vivo and Xiaomi
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Huawei Honor sale
The division accounted for a quarter of Huawei’s global shipments but operated largely independently of its parent, pushing its own branding and product strategy, and maintaining its own distribution channels and research and development operations.
Despite this independence, Honor was still subject to the same US restrictions that limit Huawei’s access to US technology. This would have seriously affected Honor’s long-term competitiveness and resulted in major job cuts.
However, as an independent organisation, Honor will be more able to compete globally in the mid-range market with other Chinese vendors like Oppo and Xiaomi.
In comments intended to be a ‘farewell’ to, Ren Zhengfei said Honor would resume production imminently and although he once again lamented American hostility towards Huawei, urged reconciliation with US suppliers.
“Under its new leadership, Honor will very quickly resume production and resolve issues affecting its upstream and downstream partners,” Ren said in his memo. “The U.S. is a technology superpower that has many excellent companies. You should firmly and boldly work with them.”
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Via Bloomberg
