Huawei sells Honor to ‘ensure its own survival’

By Bhavya Singh

Huawei is selling its budget, “youth-focused” smartphone subsidiary, Honor, to save the company from damages caused by US Sanctions restricting supplies.

Huawei stated it will sell Honor to Shenzhen Zhixin New Information Technology, a consortium of 30 agents and dealers of Honor brand. The company has been set up for this acquisition.

The company has been under “tremendous pressure” due to “unavailability of technical elements” because of the US sanctions restricting supplies on the grounds that the firm is a security threat.

“This sale will help Honour’s channel sellers and suppliers make it through this difficult time”, the telecommunication giant said in a statement.

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The sanctions were imposed last year and were tightened further this year when the White House barred manufacturers from using US technology to manufacture chips for Huawei as they see Chinese government-supported technology development as a threat to security.

The Trump administration has accused Huawei of being a Chinese state spy, a claim that the company has denied repeatedly. The toughening of the sanctions are a product of heightened tension between the US and China. Wilbur Ross, Commerce Secretary had stated that Huawei and its affiliates “have worked through third parties to harness U.S. technology in a manner that undermines U.S. national security and foreign policy interests”.

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Mike Pompeo, Secretary of State had said that the US administration “sees Huawei for what it is- an arm of the Chinese Communist Party’s surveillance state” and the sanctions have been imposed to “protect U.S. national security, our citizens’ privacy, and the integrity of our 5G infrastructure from Beijing’s malign influence”.

Huawei’s sales have suffered a lot outside China and this move is to escape the loss and ensure survival. Huawei will have no ownership stake once the sale is done.

“This move has been made by Honor’s industry chain to ensure its own survival,” the telecom giant said.

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