Report: Huawei is selling its Honor unit for over $15 billion

[midian182]

In brief: Huawei is well-known for its budget Honor brand of smartphones, but the company is reportedly set to sell the unit to a Chinese-based consortium led by distributor Digital China and the local Shenzhen government for $15.2 billion.

Citing “people with knowledge of the matter,” Reuters reports that the all-cash sale will cover all Honor assets, including the brand name, research & development capabilities, and supply chain management.

Huawei created Honor back in 2013 to increase its presence in the low- to mid-range smartphone market. It competes with the likes of Oppo, Vivo and Xiaomi in China and sells products in other Asian countries and Europe.

The Honor 20

Between July and September, Honor phones made up 26 percent of the 51.7 million handsets shipped by Huawei. The brand’s product portfolio includes laptops, tablet computers, smart TVs and electronic accessories. Most of the group's 7,000 employees are expected to be retained, and Honor plans to go public within three years.

Rumors of a potential sale first arrived last month when rivals Xiaomi and TCL were mentioned as potential buyers. A deal will allow Huawei to focus its efforts on the more profitable high-end market.

The US government has had a long-running battle with Huawei and prohibits most American businesses from dealing with the company following its addition to an entity list last year. Analysts believe a sale could mean Honor will be exempt from the US sanctions, though it’ll be interesting to see whether the incoming administration sees it that way.

Huawei is expected to announce the deal as early as this Sunday, November 15.

Image credit: N.Z.Photography

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https://www.techspot.com/news/87536-report-huawei-selling-honor-unit-over-15-billion.html

 

[Endymio]

A deal will allow Huawei to focus its efforts on the more profitable high-end market.

More accurately, a deal will allow the Honor brand to escape the effects of sanctions against Huawei by the US and other nations.

 

[Adi6293]

They should have waited few more months, now that the sellout Biden will become a president he will most likely do away with most of this sanctions and tariffs against China

 

[SirDigby]

OK, so isn't the reason for sanctions against Huawei because the US believe they're in the pockets of the Chinese government? How would this help, selling the unit to "Chinese-based consortium led by distributor Digital China and the local Shenzhen government"?

 

[p51d007]

Sell the unit to a Chinese-based consortium

Meet the new boss...same as the old boss. In other words, the Chinese Communist government, still controls everything, per se.

 

[Endymio]

OK, so isn't the reason for sanctions against Huawei because the US believe they're in the pockets of the Chinese government? How would this help, selling the unit to "Chinese-based consortium led by distributor Digital China and the local Shenzhen government"?

The concern is over Huawei (and thus PRC) control over the communication infrastructure of other nations. Cell phones don't raise similar national security concerns.

 

[SirDigby]

The concern is over Huawei (and thus PRC) control over the communication infrastructure of other nations. Cell phones don't raise similar national security concerns.

In that case, why ban trade with the whole company? Why not just let them sell their mobiles?

 

[Mouseface]

So they are selling it to themselves?

 

[Endymio]

In that case, why ban trade with the whole company? Why not just let them sell their mobiles?

Huawei is allowed to sell their mobile phones. The bans involve their access to foreign chip technology, and to installing routers and other communication gear in foreign networks.

 

[SirDigby]

Huawei is allowed to sell their mobile phones. The bans involve their access to foreign chip technology, and to installing routers and other communication gear in foreign networks.

So what sanctions is the article on about that affects mobile? Is it the ban from having the google app store? Sorry forgive my naivety

The US government has had a long-running battle with Huawei and prohibits most American businesses from dealing with the company following its addition to an entity list last year. Analysts believe a sale could mean Honor will be exempt from the US sanctions, though it’ll be interesting to see whether the incoming administration sees it that way.

 

[Endymio]

So what sanctions is the article on about that affects mobile? Is it the ban from having the google app store?

There are multiple effects: one is Huawei's addition to that entity list you cite, which does not prevent phone sales per se, but does bar U.S. corporations from collaborating with them. There is also the ban on U.S. chip technology exports, which is anticipated to restrict Huawei's access to the latest components. The ban on 5G infrastructure doesn't affect cell phone sales directly, but the security concerns do tarnish the Huawei brand from a PR perspective: another reason to spin off the unit.

This timeline lays out most of the actions that various nations around the world have taken against Huawei.

 

[SirDigby]

Thanks for the info