Huawei successfully launched its Honor budget brand several years ago, using much of the same technology in its flagship ranges and offering it at a fraction of the price. Honor has garnered a loyal following, not only in China. Therefore it comes as a surprise to learn that Huawei will reportedly sell its budget technology brand to a coalition of buyers.
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According to reports, Honor will be bought by a partnership that includes the local Shenzhen government. Shenzhen, China is a special economic zone, and has become China’s answer to Silicon Valley. Most of the Chinese technology giants are headquartered in the massive city, which has grown from a small fishing village into a tech hub of more than 12 million people in less than 40 years.
Other partners of the coalition include Digital China, a distributor and Huawei partner, and other private investors. The Honor brand will be sold for $15.2 billion, and would see the company hold its own brand, research and development facilities, and supply chain. A major consideration in selling off the business is so that it can trade free from the burdens that come with the Huawei business at the moment, including a US ban.
The sanctions against Huawei have been increasing over the last 18 months, with the west vilifying the Chinese giant for various concerns around data protection and general trust. Most importantly, that includes Google, which means that Huawei don’t have access to Google Mobile Services, and TSMC, the chip-maker it used to produce its proprietary Kirin chipsets.
If this sale goes through, we could see Honor products return to key western markets like North America and Europe. However, it is unclear whether or not the same sanctions will then be placed on an independent Honor business.
