Chinese phone maker Honor partners with key chip suppliers after Huawei split

Chinese phone maker Honor partners with key chip suppliers after Huawei split

Reuters  | Jan 22, 2021 05:15

Chinese phone maker Honor partners with key chip suppliers after Huawei split

By David Kirton

SHENZHEN, China (Reuters) - Chinese budget phone maker Honor has signed partnerships with major chip suppliers such as Intel (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) after being spun off from under-fire parent Huawei Technologies in a bid to save it last year, it said on Friday.

Huawei had sold Honor to a consortium of 30 of the sub-brand's agents and dealers in November to help it resume sourcing components restricted by U.S. sanctions.

As Chief Executive George Zhao launched the View40, Honor's first phone model since the split, Honor said in a statement it now had its own deals with some tech firms.

These include AMD, MediaTek, Micron Technology (NASDAQ:MU), Microsoft (NASDAQ:MSFT), Samsung (LON:0593xq), SK Hynix, and Sony.

"The last five months have been an extremely difficult but meaningful time for Honor," Zhao said. "We feel the weight of expectation from industry partners and consumers."

Under Huawei, Honor focused on the budget end of the phone spectrum, but it will aim to move into the middle and higher tier market and expand overseas, Zhao said.

The company also would pursue the 'internet of things' market, using Huawei's terminology for connected smart devices controlled by mobile phones.

"They wanted to show they are Huawei reborn so that customers can trust them to have the same quality Huawei was aiming for," said Nicole Peng, VP of Mobility at Canalys, a consultancy.

Honor shipped 13.3 million phones in the third quarter of last year, making up just over a quarter of Huawei's total shipments, according to Canalys.

Honor's roughly 8,000 staff have moved out of Huawei's offices to a new headquarters also in the southern city of Shenzhen. Around 50% were involved in R&D, Zhao said.

Tightening rounds of U.S. restrictions have choked off Huawei's access to advanced U.S. chip technology, damaging its phone business. The United States alleges that Huawei's equipment poses a security risk, a charge the company denies.

© Reuters. The logo of Qualcomm is seen during the Mobile World Congress in Barcelona

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