Huawei may sell the Honor mobile phone business – analyst, Ming-Chi Kuo predicts

Huawei‘s consumer Business group is faced with a huge challenge that could crumble the brand’s smartphone business, occasioned by the US ban. Already, the company is already running short of supplies for chipsets that would be used on future models. As a result, the company is reportedly looking for contingency plans. Noted TF International Securities analyst Ming-Chi Kuo has released a research report that predicted and analyzed the potential impact of Huawei’s countermeasures against the US ban.Huawei logo

Ming-Chi Kuo pointed out in the report that after a comprehensive scenario analysis of Huawei’s potential countermeasures against the US ban, one of the most likely scenarios is that Huawei sells the Honor mobile phone business.

He believes that if Huawei sells the Honor mobile phone business, it will be a win-win situation for Honor brands, suppliers and China’s electronics industry.

The analyst noted that if Honor is independent from Huawei, the procurement of parts will not be restricted by the US ban on Huawei. This he said, will help Honor mobile phone business and suppliers grow.

Under the Huawei system, Honor is currently only positioned in low-end models. If it is independent of Huawei, it can develop high-end models.

Ming-Chi Kuo believes that Honor’s current advantage lies in its brand value. If it can maintain its existing brand value after its independence from the Huawei system and extend its brand value to the mid to high-end market, it will help continue its brand advantage and increase market share.

After the US ban on Huawei, the market expects that OPPO, Vivo and Xiaomi’s market share will increase. However, if the Honor mobile phone business can be independent of Huawei, the ASP of Honor mobile phone is similar to that of Xiaomi (about US$150–$220/1,000 yuan–1,500) yuan, so Xiaomi’s market share increase will most obviously be lower than market expectations. OPPO and Vivo’s market share may also be lower than market expectations if the Honor mobile phone business can maintain the recognition of the Honor brand by Chinese users through proper marketing after it becomes independent of the Huawei brand.

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