New Launch: Huawei apparently sells off the respected brand - and it is a smart move
Confirmation expected next week
About a month ago, reports out of China stated that Huawei might unload its
Honor subsidiary to assist its to continue operations without the sanctions.
New developments suggest that the deal has indeed skilled.
Chinese media outlets claim that the decoupling is within the final stages and
therefore the official announcement will come around November 20. The
independent Honor is claimed to be owned by a newly-formed venture between
several top mobile distributors in China — Putian, Tianyin, China Post,
Aishide, etc., and an investment trust with a background of Shenzhen
SASAC.
The acquisition cost isn’t mentioned, but it's expected to be within the range
of 15-25 billion yuan, which approximately equals $2.2 billion to $3.7
billion. The state-owned company is additionally aiming for an IPO in three
years.
The biggest advantage of the deal is that Honor could once more have direct
trade relations with American companies, allowing it to source chipsets from
Qualcomm and have access to full-fledged Android, among others. Since the
sanctions are on Huawei (which includes Huawei Consumer Business Group and
Huawei Enterprise also), a split should help Honor subvert those. The deal is
additionally said to incorporate the whole employee base, research and
development, and therefore the related supply chain, therefore the new owner
wouldn't need to start from scratch.
According to sources, Huawei has sold Honor smartphone unit to a newly established state-owned JV, aiming for an IPO in 3 years.
— Eva 郑 عائشة (@evazhengll) November 8, 2020
The prerequisites of the acquisition is that the new company can buy and use 5G chips. An official announcement of the deal will be made around Nov 20. pic.twitter.com/KipBu3SotR
The split also will let Huawei specialize in the high-end market and
telecommunication system, instead of pursuing slimmer profits that affordable
Honor phones chase. Ming-Chi Kuo, one of the foremost reliable analysts within
the consumer tech space, also suggests that the deal is going to be a “win-win
situation” for the brands also because of the suppliers.
A report from Reuters also mentioned that Digital China, the most distributor
of Honor devices, TCL, and Xiaomi were also curious about buying Honor. Huawei
has remained mum over the speculations, but it shouldn’t be long till we get
some clarity on the restructuring.
We’ve approached Honor India for a press release on this development and can
update the story accordingly.
Hello, my name is Mohd Azahar. I'm a self-employed Pivrate from the India.
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