Huawei has sold Honor: what implications it has

After several days of rumours of a possible sale of Honor by Huawei, today the Chinese firm has made a statement-making it official.

Huawei has sold its affiliate Honor to Shenzhen Zhixin New Information Technology Co., Ltd.

Why Honor has been sold

In the communiqué itself, Huawei makes it clear that the reason for this strategic move is the situation that the US government has given it. With the sale, they intend to give an exit to both honor workers and the company itself and to all suppliers of components of the firm.

It was Honor itself that proposed this movement and Huawei has ended up accepting it as an outlet, at least for the subsidiary.

Who's the buyer

The name of the corporation that bought Honor probably doesn't ring a bell. Shenzhen Zhixin New Information Technology Co., Ltd. is a group of more than 30 Shenzhen companies linked to Honor.

What the firms have sought has been to acquire Huawei's subsidiary so that it can continue to operate independently, without the ties imposed by the U.S. sanctions.

Huawei has made it clear that from now on it will have nothing to do with the management or ownership of the new company.

The amount of the operation has not been made official, although it was rumored that the amount would be around 100,000 million Chinese yuan, almost 13,000 million euros.

Movements within Huawei

Honor's departure has also had implications among some Huawei executives.

Wan Biao, the former COO of Huawei's consumer business, will now serve as President of Honor. The CEO of the new company will be Zhao Ming. Fang Fei, former vice president of Huawei's commercial consumer product line, will also be on Honor's board.

Another manager coming from Huawei is Yang Jian, who will act as Honor's Retail Management President, having left the position of director of Huawei's consumer business retail management department in China.

In addition, at least 6000 Huawei supply chain employees have joined the new Honor.

The new company will have to use other processors

But there will be more changes within the company. No mention has been made of HiSilicon, the Huawei-owned company that created Kirin processors. This implies that, unless that company also becomes independent, this chipset brand will still not be able to operate.

That leads Honor to need components from other manufacturers, such as Mediatek, Samsung or Qualcomm.

In theory, since it is no longer related to Huawei, it could acquire processors from any company, as other Chinese firms like Xiaomi, realme or OPPO do.

At the moment there are no statements from the United States government, which could take the new Honor as an independent company, but could also interpret the movement as an attempt to bypass its legislation.

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