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Ren zhengfei
Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Huawei Technologies Co. founder Ren Zhengfei called the the sale of its Honor smartphone division is budgeting a “clean break” that should free it from US restrictions and create new power in the world’s largest mobile arena.
Ren, exploding the Trump administration’s tactics to contain his business, ensured that employees in an Honor memo would quickly resume production after regaining access to U.S. circuits and software. His missive comes days after Huawei unveiled an agreement to sell the company to a consortium of more than 30 Chinese companies, assembled by the government-backed Shenzhen Smart City Technology Development Group Co.
“In the face of wave after wave of attacks from the United States, we finally realized that American officials were not trying to fix us. They were looking to kill us, ”Ren said. “Once we get divorced, there will be no more secret relationships with Honor. We handle separation as an adult and will strictly adhere to international regulations and standards. “
The Huawei leader appeared to be responding to uncertainty as to whether the split will trigger a resumption of supply of US chips to Honor under new ownership or whether US regulatory action is required first.
Citing national security concerns, the United States has waged a wide-ranging campaign against Huawei since 2018 that placed its CFO under house arrest in Canada and instigated bans on the use of the company’s 5G equipment in countries ranging from UK to Japan. The final blow came when the White House passed sweeping restrictions on vendors this year, closing loopholes that allowed Huawei to source ready-to-use semiconductors to keep its consumer business afloat.
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Honor was an integral part of Huawei’s smartphone business, once bigger than Samsung Electronics Co. is now struggling to secure enough production-critical components and software. Access to American technology will breathe new life into a brand that has gained popularity among young, budget-conscious users in recent years and has made strides in overseas markets like Europe. This could create a rival to the likes of Xiaomi Corp. and Oppo, which compete in the same price segments.
The sale illustrated the uneven impact of White House sanctions on China’s largest tech company, whose consumer activities are struggling even as its networking unit is up and running. Shenzhen-based Huawei reportedly protected its core telecommunications equipment business by store critical components to continue delivering the 5G deployment in its home country until at least 2021.
Honor’s new owners include local city-backed companies such as Shenzhen Expressway and Shenzhen Energy. It can also rely on Suning.com Co., the country’s largest electronic channel supported by Alibaba Group Holding Ltd., to help improve distribution.
“Under his new leadership, Honor will resume production very quickly and resolve issues affecting its upstream and downstream partners,” Ren said in his memo. “The United States is a technological superpower with many great companies. You have to work firmly and boldly with them. “
– With the help of Edwin Chan and Yuan Gao
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