Huawei has been engaging in talks to sell off its flagship Mate and P smartphone series, two knowledgeable sources told Reuters. The sale would effectively end Huawei’s involvement at the premium end of the smartphone-making business. As the tech giant’s smartphone supply chain remains crippled by U.S sanctions, this development is not surprising.
Reuters’ sources said Huawei had been discussing the sale with a consortium led by Shanghai government-backed investment firms for months now although the company began internally exploring a sale as early as September last year, one of the sources said. Both sources also noted that no decision has been made so far and the talks – that are still in early stages – might fall through.
In many ways, the plan above mimics the path that the company has taken for HONOR. Many might not have remembered this but HONOR began its life as one of Huawei’s smartphone series before it was spun off as a separate brand and ended up being an independent company after it was acquired by a consortium of dealers last year.
Huawei, however, issued a strong denial. “Huawei has learned there are unsubstantiated rumours circulating regarding the possible sale of our flagship smartphone brands,” said a company spokesman. “There is no merit to these rumours whatsoever. Huawei has no such plan.”
For its part, the Shanghai government claimed ignorance of the issue and didn’t comment further.
Huawei’s smartphone unit has been devastated by sanctions imposed by the Trump administration since 2019. If the company is mulling the sale of these two flagship series, then it mustn’t be very confident in the new Biden administration’s willingness to lift those sanctions – an assessment shared by the sources who spoke to Reuters.
In another telling sign, Huawei has already begun shifting its focus to cloud services. But even then, we foresee that the company will continue facing difficulties, as long as the sanctions by the U.S are still around.