Reuters reported that the Chinese company Huawei is in talks to sell its two premium smartphones P and Mate brands, a move that could see the company eventually exit from the high-end smartphone industry.
Talks have been going on for months between the world’s largest manufacturer of telecommunications equipment and a consortium led by investment firms backed by the Shanghai government.
Huawei began to explore the possibility of selling brands internally as early as last September, and Mate and P phone shipments amounted to about $ 39.7 billion between the third quarter of 2019 and the third quarter of 2020.
However, Huawei has not made a final decision on the sale, and the talks may not end successfully, as the company is still trying to manufacture the high-quality, locally designed Kirin chips that power its smartphones.
In response, Huawei officials issued a statement to Chinese media that the company has no plans to sell its mobile phone business and that it continues to build cutting-edge phones, but the statement does not detail how this might happen.
A Huawei spokesman said: Huawei has learned that there are unfounded rumors about the potential sale of our leading smartphone brands, and there is no basis for these rumors at all, and Huawei does not have such a plan.
The potential sale of Huawei's premium smartphone lines indicates that the company has little hope that the new Biden administration may change its stance on supply chain restrictions imposed on it since May 2019.
Shanghai government-backed investment firms may form a consortium to acquire the P and Mate brands, a model similar to the Honer deal, and Huawei is also likely to retain the existing P & Mate management team for the new entity, if the deal goes through.
Last November, Huawei announced the sale of its budget phone brand, Honer, to a consortium of 30 dealers led by a Shenzhen government-backed company worth more than $ 15.5 billion.
The sale of Honor was intended to preserve the budget brand, as US sanctions have hampered the supply chain and prevented Honor's access to key components such as the chips.
Huawei may have a similar goal in pursuing the sale of mobile phone brands, as Huawei's latest plans for the two high-end brands were driven by an insufficient supply of chipsets.
The company's chief consumer group, Richard Yu, said last year that the US restrictions mean Huawei may soon stop making Kirin chips, and analysts expect it to run out of stock this year.
The P and Mate series phones are among the best players in the high-end smartphone market in China and compete with Apple's iPhones, Mi series and Mix from Xiaomi and the Find series from OPPO.
The two brands contributed nearly 40 percent of Huawei's total sales during the third quarter of 2020, and analysts noted insufficient recent supplies of the P40 series and Mate 40 due to an acute shortage of components.
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