Huawei negotiating the sale of parts of Honor's smartphone business

Japanese parts makers see orders swell as rivals fill the void

Since its founding in 2013, Honor has played a key role in Huawei's rise to the top of the smartphone industry.

These troubles extend to its Honor sub-brand too, but Reuters now reports that Huawei is in talks to sell off parts of the Honor business in a deal potentially worth up to 25 billion yuan (~$3.7 billion).

Chipmaker Renesas Electronics Corp. has been asked by a Chinese customer to have non-American engineers redesign a particular product at a facility outside the U.S. And Zuken, a provider of design software for printed circuit boards, reports an uptick in interest from companies in China and elsewhere that are looking for alternatives to American-made tools. Chinese electronics maker TCL and smartphone maker Xiaomi are next in line as prospective buyers, said the sources.

As reported by the Reuters news, citing sources close to Huawei, negotiations are now underway on the sale of Honor to a number of possible new owners.

Besieged by USA tech sanctions, Huawei could also be trying to shake up its smartphone enterprise that has taken successful after dropping core semiconductor components and software program providers. "This will help Honor's smartphone business and the suppliers", he wrote in a research note last week.

Sources close to Huawei denied the planned sale of Honor, Tencent News reported last week.

The information has not been verified by Huawei, as the company declined to comment.

The assets to be sold to the eventual owners have yet to be finalized but apparently it could include Honor's brand, research and development as well as related supply chain management business.

The Honor brand, which sells its phones online through its own sites and via third-party retailers, competes with Xiaomi, Oppo and Vivo in the market for lower-end phones in China. Huawei employees took it to Weibo to refute the claims and the story was even retracted.

Other bidders include Xiaomi and TCL, according to Reuters, as well as Gree and BYD, according to the tech news blogger. Honor phones are also available in Southeast Asia and Europe.