On November 17, Huawei announced that it has sold Honor, its budget smartphone brand, to a consortium of over 30 local city-backed corporations, including Shenzhen Expressway, Shenzhen Energy, and Suning.com. The deal was backed by the Shenzhen Smart City Technology Development Group with support from the Chinese government.
Details on the amount and stakes involved in the deal aren"t entirely clear yet, but the primary motive of it was to ease Honor"s access to American technology due to the events leading up to and following the Sino-U.S. trade war, which cut off Huawei"s access to U.S. software and hardware technology. “This move has been made by Honor’s industry chain to ensure its own survival”, the company said in a statement.
Now, in an internal memo, CEO and Founder of Huawei, Ren Zhengfei, has assured employees that Honor will reattain optimal production levels once it regains access to U.S. technology. Zhengfei reiterated that the Honor deal will be a "clean break" for Huawei from the smartphone brand and that:
Facing wave upon wave of attacks from the U.S., we finally realized that American officials weren’t trying to fix us. They were seeking to kill us. Once we’re divorced, there’ll no longer be any under-the-table relations with Honor. We’re handling the separation in an adult manner, and will rigorously adhere to regulations and international norms.
[...] Under its new leadership, Honor will very quickly resume production and resolve issues affecting its upstream and downstream partners. The U.S. is a technology superpower that has many excellent companies. You should firmly and boldly work with them.
This should clear up some confusion regarding Huawei"s relationship with Honor after the selling. Zhengfei seems hopeful that Honor will regain access to U.S. circuitry and software, and in turn, help Chinese phones regain their former market share in the smartphone space and beyond.
Source: Bloomberg