Huawei weighs selling off its smartphone flagships report claims

Chris Davies - Jan 25, 2021, 9:06am CST
Huawei weighs selling off its smartphone flagships report claims

Huawei is reportedly considering selling its best-known smartphone brands, as the Chinese tech giant takes further steps to work around the US supply chain embargo. The future of the Huawei Mate and P Series was thrown into question when the Trump Administration added Huawei to the so-called entity list, effectively blocking it from making deals with key American companies for software and hardware.

It meant, for example, that Huawei was unable to continue its deal with Google to use the full version of Android with access to the Google Play store. Agreements with chip-providers like Qualcomm and Samsung were also undermined, along with suppliers of components such as camera modules and more.

While protesting its innocence as to the alleged Chinese security service backdoors that among the reasons for its inclusion on the entity list, Huawei took steps to salvage its businesses. Honor, the more price-conscious brand it launched eight years ago to target younger smartphone users, was sold off, and now operates as a fully independent company. Last week, Honor announced it had come to new deals of its own with firms like Intel, Microsoft, Samsung, Qualcomm, and Sony.

Now, Reuters reports, Huawei has been in negotiations to sell off its best-known smartphone ranges. The Huawei Mate and P Series are its heavyweights, helping cement a reputation among phone-fans for their camera abilities and other high-end components. With the entity list in place, however, Huawei has been forced to look elsewhere for components, including ramping up the design of its own Kirin smartphone chipsets.

All the same, homegrown SoCs – at least as Huawei relies on production currently – can’t save the Mate and P Series. While Huawei may design the chipsets itself, it has used software developed by and licensed from American companies in that process; under the terms of the US trade embargo, it cannot continue to do so. Production of the chips has been undertaken by TSMC, a Chinese firm, but one which uses American equipment and as such would be prevented from building new silicon for Huawei.

Talks have been underway with a consortium of investment firms backed by the Shanghai government, sources told Reuters, and have been going on for months after Huawei supposedly floated the idea internally in September 2020. The plan is not a done-deal, however, and indeed Huawei itself has denied the leaks.

“Huawei has learned there are unsubstantiated rumors circulating regarding the possible sale of our flagship smartphone brands,” a spokesperson for the company said. “There is no merit to these rumors whatsoever. Huawei has no such plan.”

While it may not be publicly confirming the discussions, insiders say that Huawei’s remaining supplies of Kirin chipsets is dwindling. Pressure to reach some sort of conclusion, before that hits levels that significantly bottlenecks production, is reportedly a key motivator behind the negotiations around a potential sale.


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