After many weeks of speculations about Huawei selling its sub-brand, the rumors have finally been confirmed. Huawei has sold its brand to the company by the name Shenzhen Zhixin New Information Technology Co. The new owners of Huawei are said to be a consortium of more than 30 dealers, a joint statement signed by 40 firms involved in the buying of this honor brand.
Reasons for Huawei Selling Their Sub-Brand
A statement from Huawei in part said that they decided to sell its sub-band because of the tremendous pressure they have been receiving from the sanctions put in place by the U.S. government.
According to Huawei Company, they have, for a long time, been missing technical elements considered crucial for its mobile phone business. So, due to the persistent unavailability of these elements, they have been forced to sell their entire business asset to Honor.
How Will the Selling Deal Affect Huawei?
A statement from Huawei noted that once it finally sells its sub-brand to the new owners, it will not be in a position to hold any stake in Honor. What this means that it will no longer take part in any decision-making processes. The move was made by Honor’s industry chain to ensure that it secures its own survival
Who Is Honor and What the Deal Mean for Them?
Honor is a company that was established in 2013 to sell affordable mobile phones. The establishment of this company allowed Huawei to enter into competition with other low-cost Chinese phone manufacturers in the virtual retail space. Later on, the brand diversified into smart home products and wearables such as TWS earphones, air purifiers, smartwatches, among other things.
According to a statement from Huawei, as of today, the subsidiary ships more than 70 million units per year. So, it is hard to predict the direction the Honor Company will go, even as it takes ownership of the sub-brand. However, the aforementioned joint statement states in part that the new owner is not going to impact the development direction of Honor.
Final Statement from Huawei
In their final statement during the big announcement of giving away its sub-brand, Huawei said that it hopes that Honors will take into consideration the interest of consumers by continuing to build an innovative and intelligent world for the young generation.