Honor, the standalone smartphone brand spun off from Huawei, and chipmaker Qualcomm have been in talks over the supply of chipsets, and the two are close to reaching an agreement, Tencent News reported on Thursday, citing people familiar with the matter.
In November, Huawei sold its budget smartphone brand Honor to a consortium of buyers that include agents, dealers, and government-backed entities, as US sanctions are posing threats to Huawei’s hardware supply, including key chipsets for 5G devices, KrASIA reported. Huawei said in a statement that “after the deal, Huawei will not have any shares in Honor, nor will it participate in the management and decision-making.”
Earlier this month, Qualcomm debuted its latest Snapdragon 888 processor. Chinese smartphone brands including Xiaomi and Oppo announced to carry the chip in upcoming phone models, while Huawei and Honor were absent from the list of early adopters. At Qualcomm’s annual conference, president Cristiano Amon said that his company and Honor had started to negotiate.
The core management of the new Honor will be formed by CEO Zhao Ming, chairman Wan Biao, who previously served as COO of Huawei’s consumer business unit responsible for back-end supply, and product line president Fang Fei, formerly VP of Huawei’s consumer business, according to the Tencent News report.
Zhao said in an internal meeting that, being independent of Huawei, the goal is to be the number one in the Chinese smartphone market, the report wrote. Honor’s strategy is to “push high-end products, strengthen offline channels.” Since the company was positioned as a budget phone unit targeting younger consumers, design and price of the flagship models had to be different from Huawei’s flagship products to avoid rivalry among siblings.
The integration of the workforce and rebuilding of the organization have sped up in December. Most of the employees will sign new contracts this month, to be effective from January 1, 2021. Honor’s employees are moving out to new offices and other transitions are taking place, including those of working devices and company mailboxes.
Honor is expected to announce the Honor 40 series of flagship phones around the second quarter of 2021. It is still unclear whether they will be equipped with the Snapdragon 888 chipset.
