Is Huawei looking to offload P and Mate smartphone brands?

Sources are suggesting that Huawei is looking to sell off its P and Mate smartphone brands. In fact, it may have been looking to do so for some time.

 

According to anonymous tipsters speaking to Reuters, Huawei began to explore the possibility of selling their high-end smartphone brands as early as last September. The sources suggest that the prospective buyer is a consortium led by Shanghai government-backed investment firms.

 

Huawei, however, has denied these rumours, calling them “unsubstantiated”.

 

The Chinese tech giant sold its budget smartphone brand, Honor, to a similar consortium back in November, citing the pressure placed on the company by US sanctions restricting their supply chain. The sale allegedly raised over $15.5 billion.

 

The chip supply woes that led to the sale of Honor have also been hampering Huawei’s more premium brands, with the lack of US equipment and technology leaving them unable to make their high-end Kirin chipsets. It is this sustained pressure, according to the sources, that is leading to the sales negotiations.

 

Last Friday, Honor announced its first flagship smartphone launched independently from Huawei, but more perhaps more interesting was the announcement of deals with US chip makers Qualcomm and Intel, among others, indicating that the pressure of US sanctions had been circumvented. A similar path could be envisioned for the P and Mate brands, which combined made up around 40% of Huawei’s total sales in Q3 2020.

 

China has responded to the constantly increasing sanctions from the US by pumping investment into its domestic semiconductor market, in an effort to catch up with US tech and make the Chinese industry self sufficient. Despite rapid progress, however, the tech gap remains significant and it will likely be a number of years before Chinese smartphone companies can compete with the best in the world by using domestic tech.