Huawei sells Honor brand in bid to save supply chain

Huawei on Tuesday said it was selling its budget brand smartphone unit Honor to a government-backed consortium in a bid to save its supply chain impacted by US government sanctions.

The Chinese tech giant said its consumer unit had “under tremendous pressure ... due to a persistent unavailability of technical elements needed for our mobile phone business”.

Honor would be sold to a newly-formed company, Shenzhen Zhixin New Information Technology, for an undisclosed sum, Huawei said in a statement.

“This sale will help Honor's channel sellers and suppliers make it through this difficult time,” it added.

Created in 2013, Honor has focused on the youth market, offering low-to-mid priced phones shipping more than 70m units annually.

The sale comes as the US squeezes Huawei’s overseas businesses, including network infrastructure and consumer smartphones. Washington claims Huawei is a national security threat and has also pressured the UK into bouncing the Chinese firm off a domestic 5g network project.

As a result, Huawei has seen a slowing in sales growth after sanctions kicked in in September and virtually halted its supply of smartphone chips. Overseas sales were hammered when US apps such as Google and Facebook were removed from devices.