After having sold Honor, its subsidiary dedicated to entry-level smartphones, will Huawei also part with its premium smartphones P and Mate? The Chinese company is said to be in preliminary discussions on the matter with a consortium led by investment companies backed by the Shanghai government, Reuters reported on Monday, January 25, 2021.
These discussions may not be successful. The Shanghai government said it was unaware and declined to comment on the information. “Huawei has learned that there are unfounded rumors about the possible sale of its flagship brands of smartphones. […] Huawei has no such intentions “, a company spokesperson told Reuters. The P and Mate brands contributed nearly 40% to Huawei’s total sales in the third quarter of 2020, according to research firm Counterpoint.
A sale to counter American restrictions?
Huawei is reportedly considering selling its brands since September, according to a Reuters source. Such a move suggests that the Chinese company has little hope that the Biden administration will change the course of restrictive measures taken against it, including restrictions on its supply chain. To counter these measures, Huawei has embarked on a frantic race to develop its own operating system, HarmonyOS, with an in-house app store.
On the processor side, Huawei already had a line of processors designed in-house, called Kirin. However, the company relies on software from American companies such as Cadence Design Systems and Synopsys to design them and delegates their manufacture to the Taiwanese TSMC, which uses American industrial equipment.
The latest measures adopted by the United States prevent companies using equipment or software from American companies from producing components for Huawei and its subsidiaries. According to some analysts, its stock of chips will expire later this year, which could precipitate this decision.