December 4, 2020

Huawei sells its subsidiary Honor specialized in telephony to “guarantee its survival”


MADRID

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The mobile phone market is in low hours. Forecasts point to a slight decrease this year at a global level that again shows the slowdown in sales compared to other years. In order to “guarantee its survival”, Huawei announced on Tuesday the sale of its subsidiary Honor to Shenzhen Zhixin New Information Technology, a Chinese conglomerate specialized in the distribution of technological products.

The chinese giant has recognized that its consumer division, which includes its models of smart mobile phones, has been under “enormous pressure lately” because of a “persistent lack of technical elements necessary” for its manufacture. The Honor sale, founded in 2013, “will help vendors and suppliers” of Honor products to “overcome this difficult time,” they explain in a release company sources, currently the second largest seller of «smartphones» only behind Samsung.

The conglomerate “will acquire all commercial assets related to the Honor brand”, and “once the acquisition is completed, Huawei will not have any stake in the new company,” report sources from the operation. Financial details of the acquisition have not been disclosed, but financial reports put the figure at around $ 15 billion. During these past seven years, Honor has shipped over 70 million units each year.

The decision to sell the brand is necessary to save the brand from the problems that have plagued its former parent company since it was included in the list of entities of the U.S. Department of Commerce prohibited to trade with US companies, a strategy maintained by the Trump Administration this year. Its new owners have ensured that this change of ownership will not affect the development of Honor or the stability of its executives and teams.

The telephony industry has weathered the Covid-19 hurricane within what could be expected, with a fall of 1% year-on-year. This year, however, there has been a change in trend: Apple is no longer the second largest seller in favor of Xiaomi, a Chinese company that has paved the way for “Made in China” in recent years.

Samsung, according to the estimates of the main consulting firms, regained leadership with an increase of 2% to reach 80.2 million units sold in this period, a figure that Counterpoint reduces to 79.8 million units. Huawei came in second with a 23% drop (51.7 million units sold).

Xiaomi has ranked third for the first time, reaching 47.1 million units, which is equivalent to an increase of 45%. The brand grew 75% compared to the previous quarter to reach a 13% market share. Worse luck was Apple, which has suffered the impact of not having in this quarter the renewal of its flagship product, the iPhone.

In this period, it shipped 43.2 million terminals, 1% less, while Vivo completed the top five positions thanks to selling 31.8 million units. IPhone shipments declined 7% year-on-year during the third quarter, according to Counterpoint estimates, as a result of the absence of the iPhone 12, introduced a month ago.

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