With its resources being restricted and possibly running low, it was really only a matter of time before Huawei took drastic measures to keep itself afloat. “Drastic measures” often imply layoffs, divestment, and sales, none of which look good no matter which way you look at it. Huawei is, of course, trying to point it in a positive light but it remains to be seen if Honor will survive this acquisition by a new Chinese company representing Honor’s own agents and dealers.
Huawei says this sale will help Honor and its sellers and suppliers survive, but it’s also a strategy to help Huawei itself survive these turbulent times for the Chinese tech giant. Over 30 companies attached to Honor proposed the acquisition and formed the Shenzhen Zhixin New Information Technology Co., Ltd consortium to buy and hold Honor’s brand, assets, and business.
This acquisition is most likely an attempt to distance Honor from Huawei and perhaps bypass the US export restrictions that Huawei and its subsidiaries are now facing. Huawei says it will not hold any shares or be involved in the new Honor business entirely, implying that the now independent company should be free from the accusations hurled at Huawei.
It remains to be seen, however, if opinion and rules will change in Honor’s favor after this acquisition. It might still be haunted by the specter of Huawei’s alleged ties to the Chinese government and the new consortium itself will most likely come under intense scrutiny to find any evidence that would also tie it to the same government.
An even bigger question, however, is whether Honor will be able to operate independently of Huawei, much less continue its successful streak in the smartphone market. It will most likely have to remove any and all traces of its parent, including the custom Android experience it has been relying on. It could lead to a completely different experience and identity with nothing but the Honor name left intact.