The Huawei Honor sub-brand, which it has decided to sell, could become a competitor in the future, suggests a new report from DigiTimes.
Huawei’s smartphone business unit is struggling to survive due to restrictions imposed by the United States. America has a stranglehold on the supply chain, not only because many key companies are based in the United States, but also because the native American technology is also an integral part of the components manufactured by the Japanese suppliers, Taiwanese and South Koreans.
Huawei says it has decided to let go of Honor to ensure its survival. Although the company is being sold to a new government-backed entity, it is unlikely to be subject to the same restrictions as Huawei.
Some analysts believe that Huawei is selling the subsidiary to raise cash to invest in its chipmaking technology, which would make it less reliant on American technology in the future.
Huawei will have no interest in Honor once the deal is finalized and this is why the relationship between the two companies is unlikely to be as cordial as that between Xiaomi and its sub-brand Redmi, and Realme and its sisters belonging to the parent company BBK Electronics (Oppo, OnePlus and Vivo).
Honor is a youth-centric company that makes affordable handsets. Huawei claims that more than 70 million Honor-branded phones are shipped each year.
Once it establishes itself as an independent brand, nothing prevents it from targeting the high-end segment and that would make it a direct competitor of Huawei.
For now, Honor is still heavily dependent on Huawei, and it will be interesting to see how the relationship evolves over the next few years.