Under siege by US tech sanctions, Huawei may be trying to stir up its smartphone business, which has suffered a blow after losing key semiconductor parts and software services.
The Chinese giant is in talks with the Digital China Group to sell parts of Honor, its low-cost phone unit for 15-25 billion yuan ($ 2.2-3.7 billion). Reuters reported On Wednesday.
Digital China, a Hong Kong-listed company, is a spin-off of the Legend Group (later Lenovo) and a major distributor and close ally of Huawei.
Sales of smartphones and other consumer electronics now make up the bulk of sales for Huawei, which began selling telecommunications equipment in the late 1980s.
The news came days after a Chinese tech news blogger claimed Huawei was planning to sell Honor. Respected Apple analyst Ming-Chi Kuo also noted in a report that it would be beneficial for Huawei to divest Honor so that the company can be free from trade restrictions and Huawei can focus on high-end phones under its brand of the same name .
Sources close to Huawei denied the proposed sale of Honor, Tencent News reported last week. A Huawei representative contacted by TechCrunch declined to comment.
Huawei launched the independent brand Honor in 2011 when Xiaomi’s low-budget phones took China by storm. Like Xiaomi, Honor initially focused on online sales and young consumers. BBK Group’s Oppo, Vivo and Realme have since made significant strides in the budget phone market.
Honor’s branding, research and development capabilities, as well as the related supply chain management business, could be for sale, according to Reuters. The tech news blogger said Honor will operate and source independently after the sale.
Other bidders are, according to Reuters, Xiaomi and TCL and according to tech bloggers Gree and BYD.
There’s more to come …