Huawei sells Honor phone brand to government-backed consortium
Huawei has announced the sale of its smartphone brand Honor citing ‘tremendous pressure as of late.’ The company says it has had persistent unavailability of technical elements needed for their mobile phone business due to the US sanctions. Hence, it has decided to sell all of its Honor business assets to Shenzhen Zhixin New Information Technology Co., Ltd., which is a government-backed consortium. It is a company formed by a technology enterprise owned by the government of the southern city of Shenzhen, where Huawei is headquartered, with a group of Honor retailers.
Huawei hopes this move will help Honor ‘ensure its own survival.’ Once the sale is complete, Huawei will not hold any shares or be involved in any business management or decision-making activities in the new Honor company. However, this announcement gives financial details. The company will retain its flagship Huawei smartphone brand.
The move comes after the Chinese tech giant was rumored to sell its budget smartphone brand, Honor recently. Huawei has been at the center of US-Chinese tension over technology, security, and spying. As per American officials, Huawei might facilitate Chinese spying, which the company denies. Further, the Trump government is lobbying European and other allies to exclude Huawei and other Chinese suppliers as they upgrade networks.
The US has blocked Huawei’s access to most US tech, which includes Google services, and it was tightened this year when the White House barred manufacturers worldwide from using US technology to produce chips for Huawei.
That said, we have no information on how Honor’s new owners planned to regain access to US chips and other technologies including Google services. For reference, Chinese brands like OPPO, Vivo, and Xiaomi operate without such restrictions.
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