Business & Economy

Huawei sells Honor to ‘ensure its survival’ in face of US sanctions

Beijing, Nov 17 (efe-epa).- Chinese telecommunications giant Huawei on Tuesday announced the sale of its budget mobile phone brand, Honor, as the firm continues to face sanctions from the United States.

Huawei has sold all of its shares in Honor to Shenzhen Zhixin New Information Technology Co. Ltd, a consortium of some 30 agents and dealers, Huawei said in a statement.

“Huawei’s consumer business has been under tremendous pressure as of late. This has been due to a persistent unavailability of technical elements needed for our mobile phone business,” the statement said.

Huawei said the sale will “help Honor’s channel sellers and suppliers make it through this difficult time” and was “made by Honor’s industry chain to ensure its own survival.”

The sale – the value of which not disclosed in the statement – comes at a time when Huawei is facing heat from the United States.

The US administration led by President Donald Trump considers Huawei a threat to national security, believing the brand’s devices could be used to spy for Beijing, something that Huawei has denied.

In August, the US Department of Commerce announced that from Sep. 15, Huawei’s global suppliers developing or producing components using US technologies would first need to obtain a license from Washington in order to sell to the Chinese company.

This effectively meant that the main chipmakers in Europe and Asia, including NXP Semiconductors in the Netherlands, Samsung Electronics in South Korea and MediaTek in Taiwan, can only sell their products to Huawei if the US authorizes it.

The Chinese state-run Global Times newspaper said in an article on Tuesday that according to analysts,”it’s likely that the sale will enable Honor to use US affiliated technology and software such as Google, and there’s also a possibility that Honor can regain shares that Huawei lost in it overseas market.”

Washington is also leading a campaign against 5G networks developed by Huawei around suspicions of espionage, and in December 2018 it requested Canada’s arrest and extradition of Huawei’s chief financial officer Meng Wanzhou, whom it accuses of bank fraud to evade American trade sanctions imposed on Iran.

Meng, daughter of Ren Zhengfei, the founder of the Chinese telecoms giant and one of the country’s richest men, is out on bail in Canada awaiting a decision by the courts on her extradition to the US. EFE-EPA


Related Articles

Back to top button