Huawei completes its sale of the budget smartphone brand, Honor, to 30 dealers and agents for $40 million to protect the company against harsh US restrictions amid the pandemic. Honor is now the property of fellow Chinese citizens who are now forming a new company called the Shenzhen Zhixin New Information Technology.
The Chinese technology giant, Huawei, will no longer have any rights, hold any share, or have any say regarding the development of the budget smartphone brand on this particular sale. The agents are all a collection of different companies who joins the purchase.
Huawei Sells: Honor is now Fellow Chinese Company's Ownership
According to Reuters, a consortium of 30 agents and dealers are involved in the deal and over 40 companies signed the joint statement backing the deal from Huawei towards the concerned parties. The collection of agents are now forming a company called Shenzhen Zhixin New Information Technology.
The sale was among the Chinese community, towards another Shenzhen-based company that organized itself particularly for the Huawei deal. The company aims to continue where Huawei left off and would continue to develop Honor's branding and smartphone technology.
Shenzhen Zhixin New Information Technology aims to help Huawei and Honor to save its technology in the current smartphone industry which caught the latter between the US dispute. The Committee on Foreign Investment of the United States recently restricted Huawei from accessing US-made software and technology.
US Restriction: Large Threat Huawei's Development and Growth
The US Restriction under the CFIUS' management prohibits any foreign companies to access American-made software and technology without proper certifications and permissions. Notably, Huawei gravely relies on two major technologies present on its smartphones.
First, Huawei uses Google's Android as the operating system of its previous smartphones which were widely popular in the technology market. The dispute started several years ago when the country tightened its grip on Huawei and other foreign technology companies.
Additionally, Huawei also uses Qualcomm's Snapdragon chipsets on its past mobile phones which are from the leading American semiconductor company based in San Diego, California. Qualcomm is one of the world's largest supplier of smartphone processors and 5G network technology in the world.
The dispute against the US government and heavy reliance on American-made technology surely crippled Huawei during the early restrictions until the present times. The Chinese smartphone maker resorted to its user interface (UI), application store, and even a chipset from another company.
Shenzhen Zhixin New Information Technology: Continues Huawei Legacy for Honor
Fellow Chinese agents, companies, and dealers all gathered as one company named Shenzhen Zhixin New Information Technology to buy Honor from the popular Chinese tech conglomerate. This move aims to help and save Honor from its eventual demise under the US laws and restrictions.
Honor was valued at $15.1 billion last week during the early days of the sale that already went through today. The sale amounted to almost twice its value at $40 billion which divested all of Huawei's Honor assets to its new owners.
The Shenzhen Zhixin New Information Technology vows to continue Huawei's legacy and development of the budget smartphone brand, Honor.
This article is owned by Tech Times
Written by Isaiah Alonzo