Chinese brand Huawei officially confirmed it is selling the Honor brand to a group of over 30 agents and dealers in China, according to Reuters. Last week, it was reported that Huawei had finalised a deal with a group of agents to sell off the Honor brand. Huawei founded honor in 2013 and it has been operating as a sub-brand for the former in several markets including China, India and more. Everything was going smooth for both the companies until the ban from the US government which made Huawei difficult to operate its consumer hardware business. The buyers of Honor will soon set up a new company- Shenzen Zhixin New Information Technology so that they can complete the deal. Both Huawei and the buyers did not disclose the deal price.
Huawei Will No Longer Be a Parent Company of Honor
As part of this deal, Shenzen Zhixin New Information Technology will acquire Honor's supply chain, R&D centres and other assets. This means Huawei will lose its complete rights on Honor. The buyers are assuring that Honor will operate as usual and there will not be any production issues. And yes, Honor's entire workforce of over 7,000 employees will also be transferred to the new company.
Huawei was at its best along with Honor and the company was aiming at securing more 5G deals from telecom operators across the world. But the trade ban from the United States government had a major impact on Huawei. For the unaware, Huawei is no longer allowed to use Google Mobile Services which is the reason why the recently launched Mate 40 high-end series and a few mid-range Honor devices featured Huawei Mobile Services (HMS) based on Android 10.
The ban also affected Huawei's chipset business as the Chinese company will no longer be able to use ARM-based SoCs by TSMC on its Kirin range. Yesterday, Qualcomm officially received a license from the US government to sell '4G chipsets' to Huawei. With the entire world transforming to 5G, Huawei will again import the 4G chipsets from Qualcomm to run the hardware business. Probably, the Kirin 9000 SoC will be the final in-house chipset from Huawei.
Huawei did not disclose the deal value, but an earlier report indicated it to be around $15.2 billion.