Huawei, the Chinese telecom giant once ranked as the world’s largest smartphone maker and increasingly squeezed by Washington, announced Tuesday that it would sell its budget handset brand Honor to a government-backed consortium in a bid for the unit’s survival.
Huawei has been struggling to overcome restrictions on crucial chip technologies by the U.S., which calls the company a national security threat.
By breaking off, Honor can get smartphone supplies without Washington’s blockade, but will lose access to Huawei’s resources and may even face new U.S. restrictions in the longer term, analysts warn.
“This move has been made by Honor’s industry chain to ensure its own survival,” Huawei said in a statement. “Huawei’s consumer business has been under tremendous pressure as of late.
This has been due to a persistent unavailability of technical elements needed for our mobile phone business.”