Sale of Honor to Digital China imminent

According to media reports, the Huawei subsidiary Honor is about to be sold. Originally, the main potential buyers were Xiaomi and TCL, competitors already active in the smartphone sector. Now, according to the news agency Reuters, the company is to be sold to a consortium that includes distributor Digital China and an investment fund of the government of the Shenzhen Special Economic Zone. The new owners will each receive 10 to 15 percent of the company. In total, the sale of Huawei is expected to generate 100 billion yuan, or around 13 billion euros.

Industry experts say the most likely reason for the sale is the US sanctions, which have been in place for months and are affecting the production of smartphones. As a result, Huawei and Honor have lost the opportunity to purchase Qualcomm, Samsung and Hynix chips, among others. HiSilicon chips developed in-house are also affected by the sanctions, as these may no longer be produced for Huawei by contract manufacturer TSMC. The sale would allow Huawei to concentrate its scarce resources on the carrier business and high-end smartphones with higher margins.

Huawei is the world market leader for smartphones

Despite the corona pandemic, which according to a forecast of the International Monetary Fund (IMF) destroyed around 28 trillion dollars in global value added and also hit the smartphone market hard, Huawei managed to become the world market leader for smartphones in the second quarter of 2020, according to the market research group Canalys. The market research company Gartner, however, which uses a different counting method, still sees Samsung in first place with a minimal lead.

The subsidiary brand Honor has also made a decisive contribution to this great success. Although it operates predominantly independently and sells almost only smartphones in the lower and medium price segment, such as the new Honor X10 Lite, it can benefit from Huaweis developments and thus gain valuable market share from the competition thanks to its very good value for money. Overall, Honor is said to be responsible for 25 to 30 percent of Huawei smartphone sales.

Simon Lüthje

I am co-founder of this blog and am very interested in everything that has to do with technology, but I also like to play games. I was born in Hamburg, but now I live in Bad Segeberg.

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