Due to pressure from the U.S. government, Huawei is now selling its royalty division after all. Already in October the Chinese manufacturer had thought about the sale, now it should be so far.
TCL and Xiaomi are not the buyers
The contract for the royalty section was not awarded to the manufacturer’s active competitors. Neither TLC nor Xiaomi have become buyers of Honor. Instead, Honor went to a newly founded company called Shenzhen Zhixin New Information Technology. This new company is a consortium of partners and government-backed companies. Huawei will no longer have any shares in the company, which was founded in 2013. The Chinese manufacturer stressed that once the sale is completed, it will no longer have any decision-making powers in the new Honor company. The reason for the sale is the sanctions imposed by the U.S. government through President Donald Trump. He accused the company of espionage for the Chinese government. The U.S. government has not yet been able to provide proof of the accusations. It is questionable whether even the sanctions against the manufacturer will be lifted, now that Joe Biden has won the election campaign. The previous action against Huawei by the US government has just been led by President Donald Trump. With the sale, however, the company shows that it does not expect the sanctions to be lifted in the near future.
Huawei’s retail business is suffering
The Chinese company is struggling with the sanctions, especially in the end customer business. The restriction on the use of apps, is proving particularly effective. The sanctions have forced Huawei to stop installing Google applications on its devices. Sales of Honor and Huawei’s devices have therefore fallen considerably, especially in their home country China. There are problems not only with the applications on the smartphones, but also with the components. The company is finding it very difficult to get hold of SoCs, for example, because of the restrictions. How things will continue with Honor’s smartphones cannot yet be said. Maybe they will be available again soon with the Google apps.
Purchase price unknown
It is not known at what price Huawei finally sold the Honor division. According to reports, however, the sum is expected to be between 1.9 and 3.15 billion euros.
