Huawei Throws In the Towel, Decides to Sell Smartphone Business

Huawei is selling its Honor line of smartphones in the midst of crippling sanctions by the US government.

The US has been waging a campaign to isolate Huawei, painting the company as a threat to national security. While all Chinese companies are required to cooperate with the Chinese government, Huawei is believed to have stronger ties with military and intelligence officials than many companies. As a result, US officials have accused the company of being part of Beijing’s spying apparatus, a claim Huawei has vehemently denied.

Despite the denials, the US has banned Huawei and pressured its allies to do the same. The UK, Australia and New Zealand have instituted similar bans, as have a number of other countries around the world. The US also used the Entity List and Foreign Direct Product Rule to cut Huawei from its suppliers, specifically TSMC, which manufactured Huawei’s line of smartphone chips. The company was forced to work out a deal with Qualcomm, with the latter receiving an exception to sell 4G chips to Huawei.

It appears those measures were not enough to stave off disaster, as Huawei is selling Honor to salvage the smartphone unit. According to The Houston Chronicle, the buyers are a group of 40 Chinese companies, including a number of retailers that carry Honor. The deal is reportedly worth as much as $15 billion and will leave Huawei with no ownership stake in the smartphone line.

It remains to be seen if this will result in sanctions being lifted.