Huawei Looking to Sell Parts of Sub-Brand ‘Honor’

• Huawei can no longer find a sustainable way to maintain Honor’s business prospects.
• The Chinese giant would prefer to sell it to another company and continue to procure parts for it.
• This way, Honor could get back on a profitable track by reaccessing Google Services.

Huawei Technologies, the troubled smartphone and telecommunications equipment giant, is reportedly looking to sell parts of the ‘Honor’ sub-brand. The company needs to revisit its business plan and set a new course of action, and the smartphone-focused Honor feels more like a weight for them right now. Since the US sanctions have forced Google to retract its official support for Huawei and Honor Android phones, the Chinese are dealing with a lack of key software and services like the Play Store, Google Maps, Chrome, Gmail, and more.

The Huawei smartphones could continue to fight for a piece of the market using the company’s own app store and custom OS, but Honor devices don’t have the power to compete since they are budget phones. Doing discounts on the software space and getting a device with amazing hardware could work, but doing discounts on both areas would not be feasible.

Also, Huawei devices can have their price dropped and still make profits, whereas Honor products are already sold on a tight margin. All that said, there’s no room for the Honor brand anymore, at least not as long as it stays in Huawei’s hands.

Thus, representatives of the Chinese brand met with the Digital China Group, TCL, and Xiaomi Corp and discussed the prospect of selling parts of Honor. Reportedly, the deal would be of a range of 15 billion yuan and 25 billion yuan (between 2.2 and 3.7 billion USD). None of the participants of these meetings commented anything regarding the talks that took place, so for now, we’ll have to wait and see what happens.

If Honor escapes the Huawei umbrella, it should get access to Google Services again, and so its business will retain prospects. At the same time, Huawei could continue to supply parts for its devices, so both brands will win from such a development.

To get an idea of its size, Honor accounted for about 26% of the smartphones sold by Huawei during Q2 2020, so it’s a significant asset and a highly recognizable brand that should be alluring to other smartphone makers in China.