Huawei Technologies Co Ltd is apparently in talks with Digital China Group Co Ltd and other companies to sell off parts of its sub-brand Huawei smartphone unit.
Honor offered a range of pocket-friendly yet stylish and effective smartphones aimed mainly at young consumers. Although it would be wrong to deny that Honor smartphones’ sales, even now, are moderately high, Huawei’s drastic decision comes from a place where the company needs to rethink its business strategies. Apparently, the deal that is currently in motion could fetch up to 25 billion yuan for the Chinese smartphone giant, Huawei.
As mentioned earlier, the decision comes from a place that requires the brand to stay afloat especially after the US declared a drastic ban on the company. The company has decided to shift its focus and now is engaged in resettling its priorities. The Chinese brand will now focus on its higher-end Huawei phones rather than spending time and money behind its affordable sub-brand Honor.
This decision might seem to be processing too fast, but Huawei and the other companies engaged in this negotiation are yet to decide on which particular assets are to be sold off. However, it has come to light that the assets could include Honor’s brand, research and development capabilities and related supply chain management business.
Reportedly, the deal could be an all-cash sale and could end up below the economical margin proposed by Huawei. The deal could end up being worth somewhere between 15 billion yuan and 25 billion yuan.
In this trade-off, the company, Digital China, the main distributor for Honor Phones, has emerged as the frontrunner, but other buyers also include the names such as the Chinese electronics maker TCL and of course, its rival smartphone maker Xiaomi Corp. None of the companies has mentioned anything officially regarding this trade-off deal.