Honor splits off from former parent Huawei to chart its own course

The split can prove beneficial for Xiaomi as it aims to climb to the second spot in the global smart phone market.

After repeated reports, Huawei has finally made an official announcement declaring the sale of its subsidiary, Honor, in China for an undisclosed fee. Following the announcement, Huawei Investment Holdings Co will have no share or say in the management of the new independent brand. The move comes as US restrictions led by the Trump Administration have severely crippled Huawei’s ability to procure essential hardware such as chipsets even to the extent of affecting its ability to make HiSlicon Kirin chips. Additionally, Huawei’s 5G equipment infrastructure buisness also came under the scanner as the Trump Administration called it a serious threat to national security, an allegation repeatedly denied by Huawei.

Specifics of the Huawei-Honor split

Talking about specifics, Huawei’s agreement for purchase is with Shenzhen Zhixin New Information Technology Co. Ltd., a consortium of over 30 agents and dealers in China. There are no financial numbers but a previous report indicates the deal is around 15.2 billion USD. As per the official statement, the move was made in the best interest of Honor and will protect Honor from the current tight scrutiny that is over Huawei. 

Honor’s top management as well as talent teams will retain their respective positions working as before with Geroge Zhao, president of Honor, now assuming the position of Chief Executive Officer (CEO). 

According to some industry analysts, this split up could save Honor from the tight US restrictions that deny the OEM from Google Mobile Services (GMS) and chip supplies. However, whether/if that really happens is yet to be seen. As a subsidiary of Huawei, Honor has had the same troubles as Huawei in this regard.

Catalyst for Samsung and Xiaomi’s rise

While this move might save Honor from bankruptcy, it is unlikely to have any major impact on the global standings in the smartphone industry. In fact, Huawei’s market share will shrink further as earlier statistics included sales numbers of both Huawei and Honor combined. Hence, the immediate beneficiaries of this move will be Samsung and Xiaomi, as statistics have already started to show. Huawei had temporarily usurped the number one spot (reported by Canalys) from Samsung for a brief while in H1 of 2020. However, analysts said that the dominance came mostly from strong local demand rather than international shipments.

The Q3 2020 report from IDC, Counterpoint and Canalys indeed pointed out that Samsung had regained the top slot from Huawei as the Korean giant posted its highest quarterly revenues figures ever. Interestingly, as per the same report, Xiaomi overtook the number two spot for the first time in a long time held by Apple with a year-on-year growth of 46 percent. Xiaomi’s impressive shipments coupled with no US restrictions could very well be the catalyst to cement its place as the second largest smartphone maker in the near future as troubles show no signs of stopping for Huawei.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Hot Topics

Mobile phones sales: It’s time to bounce back!

Indians procured 150 million mobile phones last year, despite this being a 2 percent dip compared to the sales in 2019, according to International...

Arzooo makes it big again; secures $6 million from Trifecta Capital

Arzooo, among India’s leading and one of the fastest growing B2B retail-tech platforms, has secured $6 million from Trifecta Capital. The new funding is...

Samsung Galaxy Chromebook 2: First laptop with QLED display available for pre-orders

Samsung Galaxy Chromebook 2, Samsung’s first laptop to feature the QLED display technology is now available for pre-orders in the United States. The Chromebook...

Related Articles

Realme launches affordable 5G gaming smartphone series Narzo 30 Pro 5G and Narzo 30A

Narzo 30 Pro 5G is powered by MediaTek Dimensity 800U 5G Chip with 5G+5G DSDS, benchmarking at 340,000+. Realme Narzo 30A comes with...

Arzooo makes it big again; secures $6 million from Trifecta Capital

Arzooo, among India’s leading and one of the fastest growing B2B retail-tech platforms, has secured $6 million from Trifecta Capital. The new funding is...

Microsoft announces availability of Surface Pro 7+, Surface Hub 2S 85-inch in India

Surface Pro 7+ has optional LTE Advanced features to assist users connected at their house if the bandwidth is in a remote location. ...