Huawei has been battered by a long US campaign against the company. Now it is hunkering down for survival by selling off its budget smartphone business.
A consortium of buyers said on Tuesday that it has acquired Huawei’s Honor smartphone brand for an undisclosed amount of money.
Huawei and the group of buyers said they struck the deal to help save Honor’s supply chain, and protect consumers and sellers.
Ditching Honor gives Huawei’s main smartphone brand more of a fighting chance
Selling Honor means the embattled Shenzhen company can now free up resources to focus on its own brand of flagship smartphones, according to Nicole Peng, analyst at market research firm Canalys.
Offloading Honor will give Huawei’s smartphone unit a bit of breathing room.
Huawei will not hold any shares or be involved in any business management or decision-making activities in the new Honor company, according to a company statement.
Focusing on the flagship devices will help Huawei “maintain their high-end brand image and also generate more revenue,” said Wong.
Losing Honor will hit Huawei’s global smartphone ranking
Without Honor, Huawei’s total smartphone sales will take a hit.
For nearly the last two years, the budget brand has accounted for between 25% and 29% of Huawei’s total smartphone shipments, according to data from IDC.
Canalys, which uses a different method to calculate shipments, found that Honor accounted for 20% to 40% of Huawei’s total sales.
In the second quarter this year, the period when Huawei eked out a win over its South Korean rival, Honor made up more than a quarter of the company’s total smartphone sales, according to IDC and Canalys.
Samsung already regained the top spot in the July-September quarter, with Huawei taking second place for global smartphone sales, according to IDC and Canalys.
Without Honor phones, Huawei would have been bumped to the No. 3 spot, behind Chinese smartphone maker Xiaomi.
