The news comes a month after a report that stated that Huawei is likely to sell off Honor and focus on high-end phones and telecom equipment instead of Honor, which primarily focuses on budget and mid-range smartphones for the masses.
Now, there is further news.，Huawei is planning on selling its budget smartphone brand unit Honor for a 100 billion Yuan (roughly 15.2 billion US Dollars) deal which will include the Digital China Group, and the local government of the brand’s home town, Shenzhen.
While this hasn’t been officially been announced, sources believe that the company might unveil this news by Sunday (15th November 2020). As per sources, the Digital China Group will be among the top two shareholders of Honor with a near 15 percent stake in Honor Terminal Co Ltd, which was previously fully owned by Huawei. The transaction will have Digital China finance the bulk of the deal through bank loans, which will further be supplemented by at least three investment firms that are backed by the government of financial technology hub Shenzhen. These firms would each hold about 10 to 15 percent of the shares.
The deal would allow Honor to deal with American companies for sourcing chips and processors, as the ban is only on Huawei and its enterprise group. Splitting completely from Huawei would mean Honor can take control of the business and also launch smartphones running on Android.
Moreover, the deal also includes the entire employee base, research and development team, and the existing supply chain. This makes it a lot easier and faster for the new owners to bring the business back on track without having to start from scratch.
Huawei launched Honor as a sub-brand in 2013. Honor has mainly been targeting the budget and mid-range segment of smartphone buyers, competing against the likes of Xiaomi, Oppo, Vivo, etc. Honor smartphones accounted for 14.6 million, or 26 per cent of the total 55.8 million smartphones shipped by Huawei in Q2 2020, according to a Canalys report.