Huawei has buckled under the immense pressure of parts unavailability and chosen to hive off its Honor business to Shenzhen Zhixin New Information Technology.
Once the sale is completed, Huawei will not hold any shares or be involved in any way with the new company.
Rumours of this eventuality surfaced a week ago. It was reported then that Huawei was planning to sell Honor for 100 billion yuan to Shenzhen ZhixinNew Information Technology, which is jointly founded by Shenzhen Smart City Technology Development Group and more than 30 Honor agents and dealers.
“This move has been made by Honor’s industry chain to ensure its own survival. Over 30 agents and dealers of the Honor brand first proposed this acquisition. We hope this new Honor company will embark on a new road of honor with its shareholders, partners, and employees,” said Huawei.
Honor was created in 2013 to target the youth market. Offering low- to mid-end price smartphones, the brand had shipped more than 70 million units annually.