Huawei has had a rough time of it in the smartphone market over the past year and, while its relationship with the US and related sanctions is an ever changing situation, the company has decided to let Honor go solo to shoot for success.
Huawei has continued to release phones in the West, despite US sanctions restricting its access to Google Play Services. However, this has led to stellar hardware like the Huawei Mate 40 Pro being hard to recommend, with some expecting it could be the company’s flagship swansong. These difficulties have extended to Honor, however, a sale has given its smaller sibling a new chance at the global market.
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Huawei released a statement confirming the sale, delving into the reasons behind the move:
“Huawei’s consumer business has been under tremendous pressure as of late. This has been due to a persistent unavailability of technical elements needed for our mobile phone business … Since its creation in 2013, the Honor brand has focused on the youth market by offering phones in the low- to mid-end price range … We hope this new Honor company will embark on a new road of honor with its shareholders, partners, and employees. We look forward to seeing Honor continue to create value for consumers and build a new intelligent world for young people.”
As Huawei states, Honor found much of its success in the low to mid-range smartphone market – before the US sanctions came into the play. For those who previously had their attention grabbed by the Honor brand, this sale could offer renewed hope of the reintroduction of this budget phone player in the West.
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Analyst Ben Wood, chief of research at CCS Insight, gave his thoughts on the impending sale and Honor’s future prospects:
“There has been endless speculation that Huawei would divest Honor, so it is an important step that this is now official … We assume that the goal will be for the new independent company to re-establish ties with Google and component suppliers … It seems Huawei had few others options other than closing or divesting the Honor division given the punitive sanctions imposed by the US administration.”
While the renewed freedom for Honor may allow it to get access to some pivotal services, Wood thinks the company won’t find it all that easy, with tough competition to contend with:
“The Honor brand was historically focused on mid- and low-tier devices targeted at younger customers. This is one of the most competitive Android smartphone product segments so this new version of Honor will need to work hard to compete with rivals such as Realme and Xiaomi who have been aggressively focused on this market opportunity as Honor sales have declined.”