Huawei founder says Honor sale sets it free

Days after confirming plans to sell its Honor business to a domestic consortium, Huawei founder Ren Zhengfei has tried to reassure employees about the future of the mid- to low-end device unit.

He also criticised the Trump administration over tactics he said were designed "to kill" the China-based vendor.

According to Bloomberg, Ren told employees in a memo that Honor will rapidly resume production after regaining access to American circuitry and software.

Figure 1: Clear messaging: "We finally realized that American officials weren't trying to fix us. They were seeking to kill us." – Huawei founder Ren Zhengfei.
(Source: World Economic Forum on Flickr CC2.0)

Huawei has agreed a deal to sell the unit to a consortium of more than 30 Chinese corporations, assembled by government-backed Shenzhen Smart City Technology Development Group Co.

"Facing wave upon wave of attacks from the US, we finally realized that American officials weren't trying to fix us. They were seeking to kill us," Ren said.

"Once we're divorced, there'll no longer be any under-the-table relations with Honor. We're handling the separation in an adult manner, and will rigorously adhere to regulations and international norms."

Throwing down the gauntlet

A Reuters report also said Ren made use of a farewell speech to urge Honor employees to become Huawei's biggest competitor in future.

Indeed, an independent Honor would be free to develop more premium, flagship offerings to complement its more budget-oriented brand.

The speech apparently said that "millions" of employees at Honor's agents and distributors around the world would lose their jobs as sales channels dried up.

"We don't have to drag innocent people into the water just because we suffer," Ren reportedly said.

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However, access to chips remains a key issue. Bloomberg noted that it's still uncertain whether or not there can be a resumption in the supply of US chips to Honor under the new ownership, or if regulatory steps would be required first.

Huawei said Honor has shipped more than 70 million units annually. The vendor last year shipped a total of 240 million smartphones under the Huawei and Honor brands.

Mo Jia, an analyst at market research firm Canalys, has already indicated that the sale means Honor now has a chance to flourish.

Nicole Peng, another analyst at Canalys, told CNN Business that selling Honor also means Huawei can now free up resources to focus on its own brand of flagship smartphones.

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— Anne Morris, contributing editor, special to Light Reading