Huawei has sold Honor: what implications does it have

After several days of rumors of a possible sale of Honor by Huawei, today the Chinese firm has made a statement in which it is official.

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

Why was Honor sold

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

It was Honor itself that proposed this move and Huawei has ended up accepting it as a way out, at least for the subsidiary.

Who is the buyer

The name of the corporation that has bought Honor surely does not sound familiar to us. Shenzhen Zhixin New Information Technology Co., Ltd. is a group made up of more than 30 Shenzhen companies linked to Honor.

What the firms have sought has been to acquire the Huawei subsidiary in order to continue to operate independently, without the ties imposed by the US 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 billion Chinese yuan, almost 13 billion 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 executive coming from Huawei is Yang Jian, who will act as President of Retail Management for Honor, having stepped down as director of the retail management department of Huawei’s consumer business in China.

Furthermore, at least 6,000 employees from Huawei’s supply chain 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 made Kirin processors. This implies that, unless that company also becomes independent, this brand of chipsets will continue to be unable to operate.

More problems for Huawei: it would stop manufacturing its Kirin processors due to Trump’s veto

Huawei will be forced to stop producing its Kirin processors as a result of Trump’s new veto of China that takes effect in September.

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

In theory, since it no longer has a relationship with Huawei, it could acquire processors from any company, as other Chinese firms such as 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 it could also interpret the movement as an attempt to circumvent its legislation.

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