Huawei is selling off its Honor phone business

Huawei has announced plans to sell off Honor, its smartphone business focused on mid-range products for younger consumers. Huawei says the decision “has been made by Honor’s industry chain to ensure its own survival,” following “tremendous pressure” and “a persistent unavailability of technical elements needed for our mobile phone business.”

Honor products often rely heavily on Huawei’s own technology, so the company has been equally hit by US sanctions preventing Huawei from doing business with American companies. The V30 line of phones, for example, uses the same Kirin 990 processor that powers Huawei’s P40 flagship devices. Under new ownership, Honor should have more flexibility to develop its products, potentially being able to deal with the likes of Qualcomm and Google.

Huawei says it “will not hold any shares or be involved in any business management or decision-making activities in the new Honor company.” That company will be owned by the newly-formed Shenzhen Zhixin New Information Technology Co., a consortium of partners and government-backed businesses.

Terms of the deal weren’t disclosed. Reuters reported earlier this month that a proposed Honor sale could reach 100 billion yuan ($15.2 billion).