Chinese phone and telecom hardware giant Huawei is selling off its budget smartphone business Honor as it is unable to get the technical parts, it announced in a statement on Tuesday. “Huawei Investment & Holding Co., Ltd. has thus decided to sell all of its Honor business assets to Shenzhen Zhixin New Information Technology Co., Ltd. This sale will help Honor’s channel sellers and suppliers make it through this difficult time,” Huawei said in its statement. The phone maker has been under immense economic pressures due to sanctions from the United States.
Shenzhen Zhixin New Information Technology Co. Ltd. was created at the initiative of “over 30 agents and dealers of the Honor brand”, Huawei said, indicating that the phone’s sellers and distributors have come together to rescue the brand while distributing the cost. Huawei said it will have no shareholding in the Honor business after the sale. The company said it has sold over 70 million Honor phones till date.
The “tremendous pressure” Huawei mentions is likely a reference to the sanctions imposed on Huawei by the United States that prevent it from getting chips and software it needs to manufacture phones. While Honor is a significant brand, it is just a portion of Huawei’s smartphone business, which includes premium handsets that the company manufactures under its own name. Those phones will still be made, albeit likely at higher cost with an alternative to Android. Qualcomm was granted a partial exemption last week to sell some 4G mobile chips to Huawei, the company told Reuters, but did not elaborate on what chips it had received approval for.