Seems like Huawei is keen to make some serious decisions for its smartphone business. The company is reportedly planning to sell parts of its Honor smartphone business.
According to a report from Reuters citing people familiar with the development, Huawei is in talks with Digital China Group Co Ltd and other suitors to sell parts of its Honor smartphone unit in a deal that could fetch up to 25 billion yuan ($3.7 billion).
Huawei wants to focus more on its higher-end Huawei phones rather than the Honor brand which is aimed at young people offering low to mid-range phones in China and other markets.
However, the report does not reveal any information about the Honor parts to be sold as it is yet to be finalised. But according to the sources, Honor’s research & development capabilities and related supply chain management business could be sold by Huawei. The deal may be an all-cash sale and could end up somewhere between 15 billion yuan and 25 billion yuan.
Digital China, the main distributor for Honor phones, is said to be the frontrunner with other prospective buyers like TCL and Xiaomi as well.
The Honor brand was established by Huawei in 2013 but the business mostly operates independently from its parent.
Kuo Ming-chi, an analyst at TF International Securities, has said that any sale by Huawei of the Honor smartphone business would be a win-win situation for the Honor brand, its suppliers and China’s electronics industry. He said “If Honor is independent from Huawei, its purchase of components will no longer be subject to the U.S. ban on Huawei. This will help Honor’s smartphone business and the suppliers.”