To say that Huawei is going through a rough patch would be an understatement. The sanctions imposed by the US government have been getting tighter, and the relief that was afforded is running out. An Android OEM that was once at the helm of technological innovation in the flagship space, is now forced to consider various alternatives to survive. A new report from Reuters now suggests that Huawei is looking to sell parts of its subsidiary, Honor, and its smartphone business.

According to Reuters, Huawei is in talks with suitors like Digital China Group, TCL, and Xiaomi, to sell parts of its Honor smartphone business to them. If a deal comes to fruition, Honor could be sold for as much as 25 billion CNY ($3.7 Billion). The scope of the sale is yet to be finalized, but it could include Honor's brand, its R&D division, and the accompanying supply chain management business.

Selling off Honor would allow some reprieve to both Huawei and Honor. Huawei can recoup some of its associated costs, while allowing Honor and its business to rest in hands that are not affected by the US sanctions. It will also allow the company to focus better on higher-end Huawei smartphones, as Honor largely marketed itself at demographics like the youth and the budget-conscious.

Digital China Group has emerged as the frontrunner for the deal. According to Wikipedia, Digital China was spun off from Legend Holdings. Legend Holdings, in turn, became Lenovo in 2001. And as frequent readers may be aware, Lenovo Group also owns Motorola following its sale from Google. As far as we could tell, Legend Holdings/Lenovo is not directly associated with this sale. It remains to be seen how the deal eventually pans out, and which assets get sold to whom. For now, Honor is with Huawei.

Source: Reuters