Huawei’s consumer division is facing a huge challenge that could disrupt its smartphone business due to US sanctions. Huawei is already experiencing a shortage of chipsets that should be used in future models. Therefore, the company is considering different scenarios.
Renowned analyst at TF International Securities Ming-Chi Kuo has published a forecast that predicts and analyzes the potential impact of the sanctions on Huawei. Ming-Chi Kuo pointed out in his report that after a comprehensive analysis of the scenario for Huawei’s possible countermeasures against the US bans, one of the most likely scenarios is the sale of the entire Honor division by the company.
The analyst noted that if Honor does not depend on Huawei, the restrictions from the US will not be as significant for Huawei. According to him, it will help the business and improve the position of the suppliers of components for Honor mobile phones.
At the moment, the Honor division can only focus on budget models. If Honor is owned by another company, then the brand will be able to produce premium models.
Ming-Chi Kuo believes that Honor’s strength today lies in brand value. If it can maintain its existing brand value after independence from Huawei and expand its value into the mid to high-end market, it will help maintain brand advantage and increase market share.
After the latest sanctions, the market shares of Oppo, Vivo and Xiaomi are expected to increase. But if another company buys Honor, then competitors will not strengthen their position so much.