Huawei Raises White Flag, Sells 'Honor'...Inevitable Impact Expected

Huawei Abandons Mid-Range and Budget Phone Market
Honor Sale... Samsung Gains Indirect Benefits
Secures Cash but May Lose Market Competitiveness

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] Huawei, which has been under intense sanctions from the United States, has decided to sell its mid-to-low-end brand 'Honor,' leading to predictions that it will not only lose its number one position to Samsung but also lose competitiveness across its smartphone business.

According to foreign media such as The Verge on the 18th, Huawei decided to split its mid-to-low-end smartphone brand Honor business unit and sell it to Shenzhen Zhixinxin Information Technology Co., Ltd. With Honor gone, Huawei will have a gap in the mid-to-low-end budget device segment. The premium product lines have been the 'Mate' and 'P' series, while the mid-to-low-end budget segment was handled by the Honor brand.

IT specialist media XDA Developers stated, "With transactions with Qualcomm, TSMC, and others blocked, they must have recognized the need to become independent from U.S. companies, and to do so, they would have needed more cash," adding, "The sale of Honor will help Huawei secure cash." CNN Business evaluated, "Without Honor, Huawei's total smartphone sales will take a significant hit. Honor had the biggest impact when Huawei surpassed Samsung to become the number one smartphone seller."

Will Wong, an analyst at market research firm IDC, mentioned, "Because Huawei's future growth potential is uncertain, they have shifted to a strategy focusing on their existing high-end models." The Verge diagnosed, "Honor heavily relied on Huawei's own technology, so it must have been severely affected by U.S. sanctions," and added, "Samsung could benefit from this as a windfall."

Meanwhile, Honor is a mid-to-low-end brand created by Huawei in 2013 targeting young consumers. Over the past six years, Honor brand smartphones sold have reached 70 million units, accounting for 25% of Huawei's total smartphone shipments. Huawei explained, "Due to the difficulty in continuously acquiring industrial technology elements caused by U.S. sanctions, the consumer business is under enormous pressure during this difficult period. To allow Honor's channels and suppliers to continue their business, we decided to sell the entire Honor business unit."

After the sale, Huawei will not retain any shares in Honor and will not participate in management or decision-making.

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