Business & Investment

Exclusive: China’s Huawei negotiates to sell premium smartphone brands P and Mate

© Reuters.File Photo: File Photo: Huawei logo is drawn on Reading’s headquarters building


Julie Zhu, Yingzhi Yang, David Kirton

(Reuters)-China’s Huawei Technologies Co Ltd is in early-stage negotiations to sell premium smartphone brands P and Mate, and two people who are directly aware of this issue will eventually find that the company is a high-end smartphone. He said he could withdraw from. -Make a business.

Negotiations between the world’s largest telecommunications equipment maker and a consortium led by a Shanghai government-backed investment firm have been going on for months, people said, refusing to be identified because the discussion was secret. It was.

Huawei began investigating the possibility of selling the brand in-house as early as September last year, according to one source. The two sources were unfamiliar with Huawei’s branding rating.

According to consultancy IDC, Mate and P-series phone shipments were $ 39.7 billion between the third quarter of 2019 and the third quarter of 2020.

However, Huawei has not yet made a final decision to sell, and two sources say the negotiations may not be successful as the company is trying to manufacture its own high-end giraffe chips designed by itself. .. smartphone.

A Huawei spokeswoman said, “Huawei has learned that there are unfounded rumors about the potential sales of our flagship smartphone brand.” “These rumors have no merit. Huawei has no such plans.”

The Shanghai government said it was unaware of the situation and declined to comment further.

The potential sale of Huawei’s premium smartphone line suggests that the company has little hope of changing its mind towards the supply chain restrictions imposed on Huawei after May 2019 by the new Biden administration. The two said they were doing it.

According to a second person, a Shanghai government-backed investment company could form a consortium with Huawei dealers to take over the P and mate brands. Huawei also said it was likely to retain the existing P & Mate management team for the new entity if the deal was closed, the two said.

Overcome the curb of the United States

Huawei, the world’s largest telecommunications equipment vendor and second-largest manufacturer of smartphones, announced in November last year that it sold its budget phone brand Honor to a consortium of 30 dealers led by a company backed by the Shenzhen government. Announced.

The sale of all cash raised more than 100 billion yuan ($ 15.5 billion), according to a second source. Honor declined to comment.

The U.S. sanctions Huawei disrupted the unit’s supply chain and blocked access to key hardware such as chips and software from Alphabet (NASDAQ :) Inc, such as Google Mobile. The purpose was to keep it alive. service.

Huawei may have a similar purpose in pursuing the sale of mobile brands. Huawei’s latest plans for two high-end brands were motivated by inadequate chip supply, according to two sources.

Washington states that Huawei is a national security threat and Huawei has repeatedly denied it.

On Friday, Honor showed that its spin-off goal had been achieved by partnering with chip makers such as Intel (NASDAQ :) and Qualcomm (NASDAQ :) and announcing the launch of a new phone.

Last year, Richard Yu, chief executive officer of the company’s consumer business group, said Huawei would soon stop producing giraffe chips due to US regulations. Analysts expect the tip stockpile to run out this year.

Huawei’s HiSilicon division relies on software from US companies such as Cadence Design (NASDAQ :) Systems Inc and Synopsys (NASDAQ :) Inc to design chips and use US company equipment from Taiwan Semiconductor Manufacturing Co (TSMC). Outsources production to. ..

The P and Mate phone series is one of the top players in the Chinese high-end smartphone market, competing with Apple’s (NASDAQ :) iPhone, Xiaomi (OTC :) Corp’s Minand Mix series, and OPPO’s Find series.

According to market research firm Counterpoint, the two brands contributed nearly 40% to Huawei’s total revenue in the third quarter of 2020.

Analysts are already aware of the recent supply shortage of the flagship P40 and Mate 40 series due to a serious component shortage.

Flora Tang, an analyst at Counterpoint, said: “Sales of P and Mate series smartphones are expected to continue declining until the first quarter of 2021.

Exclusive: China’s Huawei negotiates to sell premium smartphone brands P and Mate–sources-2397422 Exclusive: China’s Huawei negotiates to sell premium smartphone brands P and Mate

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