Huawei has had a tumultuous time in the recent past. After getting its supplies choked out, the world’s largest telecommunications equipment maker was forced to sell off its budget smartphone brand Honor to a consortium of suppliers to ensure that it stays afloat.
Now it is being reported that the Chinese smartphone major is also looking to sell its premium smartphone lineup – the P and the Mate series – and has been in talks with a consortium of Shanghai government-backed investment firms. As per the reports, the company has been looking for options to sell these brands internally from as early as September.
Though the exact details of the Honor deal weren’t announced publicly, it was rumoured to be over $15 billion. Considering the fact that both P series and Mate series are the highest selling flagship lineups in China and, according to IDC, were worth $39.7 billion between Q3 2019 and Q3 2020, this could end up as a much bigger deal than the Honor transaction.
Impact on Huawei
If the sources quoted in the Reuters report are to be believed, there is absolutely nothing conclusive around the discussion yet. The unnamed sources told the wire agency that if this deal does go through it would mean that Huawei would be literally ousted from the smartphone market since the P and Mate series form a major share of its premium device sales while Honor took care of the budget and affordable end of price gamut.
However, the report also quotes a Huawei spokesperson refuting these talks by calling them “unsubstantiated rumours” and stated that “There is no merit to these rumours whatsoever. Huawei has no such plan.” Even the Shanghai government has declined to comment.
While a new regime in Washington has already started functioning, the chances of it overturning the curbs placed by the Trump administration look bleak. And with the essential supplies like a chipset, operating system etc. it has become next to impossible for Huawei to manufacture smartphones.
It is being reported that the company, in case the deal goes through, may want to retain the management team behind the P & Mate series for the new entity.
In a related piece of news, it appears that Huawei is not the only major smartphone maker that is on the verge of going out of business. The South Korean company LG is reportedly looking to exit the smartphone business by selling off the unit and factories. However, unlike LG, Huawei, once second-biggest smartphone maker globally, is being literally forced out of the business.