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Huawei sells Honor to a consortium. Will Honor regain access to Google apps and services?

[ UPDATE 17/11/2020 11:40 ]: Huawei has also issued a statement on the sale of Honor. Full details below.

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According to Reuters, Huawei is selling off its sub-brand Honor to a consortium that consists of over 30 agents and dealers. This is based on a joint statement that’s signed by 40 companies which has formed a new company called Shenzhen Zhixin New Information Technology to acquire the company.

After the transaction is completed, Huawei will not hold any shares in the new Honor company and this is said to be a market-driven investment to save Honor’s industry chain. There’s no mention of the transaction amount but it was speculated to costs as high as CNY 25 billion (about RM15.6 billion).

Source: GizmoChina

The statement added that the shareholders of the new Honor company will fully support the development of the Honor brand and to enable it to leverage on the industry’s advantages in resources, brands, production, channels and service, to effectively compete in the marketplace. The new owners also assured that the change of ownership will not affect Honor’s development direction or the stability of its executive and talent teams.

Huawei has also released its own statement to confirm the sale of all Honor business assets to Shenzhen Zhixin New Information Technology Co. Ltd. It admitted that Huawei is under pressure due to a persistent unavailability of technical elements needed for its smartphone business. According to the statement, the sale will help Honor’s channel sellers and suppliers make it through this difficult time.

Below is Huawei’s statement in full:

Huawei’s consumer business has been under tremendous pressure as of late. This has been due to a persistent unavailability of technical elements needed for our mobile phone business. Huawei Investment & Holding Co., Ltd. has thus decided to sell all of its Honor business assets to Shenzhen Zhixin New Information Technology Co., Ltd. This sale will help Honor’s channel sellers and suppliers make it through this difficult time.

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.

This move has been made by Honor’s industry chain to ensure its own survival. Over 30 agents and dealers of the Honor brand first proposed this acquisition.

Since its creation in 2013, the Honor brand has focused on the youth market by offering phones in the low- to mid-end price range. During these past seven years, Honor has developed into a smartphone brand that ships over 70 million units annually.

Huawei highly appreciates the continued dedication, attention, and support given by Honor’s consumers, channel sellers, suppliers, partners, and employees.

We hope this new Honor company will embark on a new road of honor with its shareholders, partners, and employees. We look forward to seeing Honor continue to create value for consumers and build a new intelligent world for young people.

Honor is currently led by George Zhao and the brand has gone beyond selling just affordable smartphones. Previously seen as a budget phone series of Huawei, Honor has repositioned itself to be a youth-centric brand which also sells laptops, wearables and IoT products.

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After introducing the Honor 20 series in 2019, the Huawei sub-brand has faced the same restrictions as Huawei from the US government. As a result, it could no longer ship new devices with Google apps and services pre-installed. Interestingly, Honor has been doing rather well when it comes to computers as they could still offer Intel and AMD-based laptops that are running on Microsoft operating system.

With Huawei relinquishing its control, there’s a chance that Honor will be able to operate on an even playing field like other Chinese smartphone makers. The brand may be able to regain access to US-based hardware, software and services, especially Google Mobile Services, Facebook, Netflix, Spotify and more. This is of course, if the new owners can convince US authorities that the brand is free from any links to Huawei.

[ SOURCE 2 ]

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Alexander Wong