JAKARTA - Huawei Technologies reportedly sold the smartphone sub-brand, Honor to Shenzhen Zhixin New Information Technology Co Ltd. The company reasoned that its business unit could continue to run in the future.
The shares of Honor's smartphone business will be owned by 30 agents and dealers who are members of the Shenzhen Zhixin New Information Technology Co Ltd. consortium, according to a Reuters report. This means that once the sale is completed, Huawei will not own any shares or be involved in the management of Honor's business.
"We hope that the new Honor company will embark on a new path of honor with its shareholders, partners and employees. We look forward to Honor to continue to create value for consumers and build a new smart world for young people," Huawei explained in its official statement.
The sale agreement came after the United States government issued sanctions by restricting any supply, including Google, to Chinese companies. Uncle Sam's country argued that Huawei was a national security threat, even though the company had denied it.
According to Huawei, its cellphone business has been under tremendous pressure of late. Including the unavailability of components and technical elements needed for the smartphone business.
"This step has been made by the Honor industrial chain to ensure its own survival," Huawei said.
All-day, everyday on a single charge! #PowerYourSpeed will be your trusted daily driver especially when you need it the most! How long can you go on a single charge on your current phone? # HONOR10XLite pic.twitter.com/pTuDMmsCeP
- HONOR (@Honorglobal) November 16, 2020
Huawei did not mention the transaction value of the Honor business sale. However, based on rumors, Huawei intends to release Honor in the range of 100 billion yuan or around Rp. 213 trillion.
Since its inception in 2013, the Honor brand has focused on the youth market by offering mobile phones in the low to medium price range. Over the last seven years, Honor has grown into a smartphone brand that ships more than 70 million units annually.
Honor sells smartphones through its own website and third-party retail in China, where it competes with Xiaomi, Oppo and Vivo in the low-priced mobile market. Honor also sells mobile phones in Southeast Asia, including Indonesia and Europe.
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