In the past week, there have been rumors of Huawei reportedly selling its Honor sub-brand to a Chinese consortium, though the smartphone giant never confirmed anything on this front. The deal is now official and sheds more light on Huawei selling its Honor sub-brand.
The company is selling its Honor sub-brand to a consortium comprising of over 30 agents and dealers, with Huawei itself not retaining any shares in Honor after the sale. The consortium of buyers will be setting up a new company, Shenzhen Zhixin New Information Technology, for the purchase. The statement from Huawei says that the sale of Honor sub-brand is a "market-driven investment made to save" its industry chain, with the deal not having any impact on the company's product development cycle.
There's no word on the value of the deal and its other terms and conditions, but it will see all 7,000 Honor employees, R&D, and supply chain management being handed over to the new company being founded by the consortium.
Huawei's smartphone business has come under immense pressure in the last year or so due to the U.S. trade ban. First, the U.S. government placed an export ban on Huawei that led to its Android license being revoked, and this year, it amended the rules to strategically block Huawei's access to key smartphone components.