Huawei to Sell Mid-Range Phone Brand 'Honor'... Shedding a Quarter of Shipments

Huawei Splits 'Honor' Division, Sells Entire Stake to Zhixinxin Information Technology
Accounting for 25% of Huawei's Total Smartphone Shipments... Market Share Changes Expected

[Asia Economy Reporter Han Jinju] Huawei is selling its mid-range smartphone brand 'Honor.' Due to the U.S. government's semiconductor export restrictions, Huawei has found it difficult to operate its smartphone business and has decided to separate its mid-range smartphone business.

On the 17th (local time), Huawei announced that it would spin off the Honor division and sell all its shares to Shenzhen Zhixinxin Information Technology. With this sale, Honor's R&D technology, supply chain, and 7,000 employees will leave Huawei's control.

Huawei stated, "This decision was made to ensure Honor's survival amid enormous external pressure and the inability to continuously use the technology necessary for the smartphone business."

Zhixinxin Information Technology is a consortium consisting of more than 30 companies and investors, established specifically for acquiring Honor. Shenzhen Special Zone Daily, representing the consortium, explained, "We decided on market-driven investment to save the industrial chain linked to Honor."

Although the consortium is led by electronics retailer Suning, the inclusion of Shenzhen's state-owned enterprises such as Shenzhen Smart City Science and Technology Development Group suggests that the Chinese government assisted in the sale.

Honor smartphone

Huawei's Honor, a mid-range brand launched in 2013, has sold 70 million units over the past seven years. Huawei attached the 'Honor' brand to its mid-range lineup separately from its flagship P series and Mate series. Honor products account for 25% of Huawei's total smartphone sales.

Honor products primarily used Huawei's Kirin chipsets, but from September, the U.S. government imposed sanctions banning semiconductor sales to Huawei, putting the smartphone business in jeopardy. Huawei had been developing ARM-based chipsets in-house and installing them in smartphones, but due to U.S. sanctions, it became increasingly difficult to procure components. Despite stockpiling parts in large quantities just before the sanctions took effect, Huawei judged that continuing normal business was difficult and decided to sell Honor.

The sale of the Honor brand is expected to change the smartphone market share. According to market research firm Counterpoint Research, in the third quarter, Samsung held the top spot with a 22% market share, Huawei was second with 14%, Xiaomi third with 13%, and Apple fourth with 11%. By separating Honor, which accounts for a quarter of Huawei's share, competition among Samsung, Xiaomi, and Apple in the mid-range smartphone market is expected to intensify further.

This content was produced with the assistance of AI translation services.