Huawei is talking about selling parts of its Honor smartphone line to Chinese IT provider Digital China Group and other potential buyers, according to confidential sources, Reuters reports.
The assets under discussion could include the Honor brand, its research and development capacities and the associated supply chain management business, Reuters’ sources said. The deal could reach 25 billion yuan ($3.7 billion).
With its stylish design and affordable prices, Honor’s mid-range smartphones are popular among young people and those with limited budgets, competing with other Chinese smartphone brands such as Xiaomi, Oppo and Vivo. In the second quarter of this year, Honor accounted for 26% of Huawei’s 55.8 million total smartphone shipments.
However, Huawei’s Honor has halted its new phone launches due to US sanctions tightening its parent company’s chip supplies. As Huawei itself struggles to find suitable part providers, Ming-Chi Kuo, an analyst at TF International Securities, said the independence of Honor could free the brand from the supply limitation and help it develop its more premium phone lines.
Rumors on Chinese social media platform Weibo said that suitors of Honor could include Digital China, Chinese electronics maker TCL, Chinese appliance manufacturer Gree, automobile company BYD and multinational tech company Lenovo.
The information has not been verified by Huawei, as the company declined to comment.