Honor partners with Intel, Qualcomm after Huawei spinoff

Chinese budget phone maker Honor has entered into a partnership deal with major chip suppliers including Intel and Qualcomm after being separated from its parent company Huawei Technologies in a bid to save the firm last year.

Last year November, Huawei had sold Honor to a consortium of 30 of the sub-brands agents and dealers to support it resume sourcing components restricted by US sanctions. In August, the US introduced new rules making it more difficult for Huwaei to obtain any chips made with the US technology.

When Chief Executive George Zhao launched the View40, Honor’s first phone model since the separation, the company said in a statement that it now had its own deals with some tech firms including US-based Microsoft, Intel, AMD, Qualcomm, and Micron Technology. The phone maker has also listed South Korean companies Samsung and SK Hynix, Taiwan-based MediaTek and Japan-based Sony.

The partnerships show that attempts to cut off Chinese companies from US technology still have loopholes that could be used in the future if the relationship between the two countries does not thaw under US President Joe Biden.

“The last five months have been an extremely difficult but meaningful time for Honor. We feel the weight of expectation from industry partners and consumers,” Mr. Zhao said.

Mr. Zhao further added that under Huawei’s ownership, Honor only targeted the low budget market of the phone spectrum but now the company aims to move into the middle and higher tier and to step into overseas markets also. The company also would pursue the ‘internet of things’ market, using Huawei’s terminology for connected smart devices controlled by mobile phones.

“They wanted to show they are Huawei reborn so that customers can trust them to have the same quality Huawei was aiming for,” said Nicole Peng, VP of Mobility at Canalys, a consultancy.

Honor shipped 13.3 million phones in the third quarter of last year, making up just over a quarter of Huawei’s total shipments, according to Canalys. Nearly 8,000 staff of Honor have moved out of Huawei’s offices to a new headquarters also in the southern city of Shenzhen. Around 50 percent were involved in R&D, Zhao said.

Tightening rounds of US restrictions have cut off Huawei’s access to advanced American chip technology, damaging its phone business. The US alleges that Huawei’s equipment caused a security risk, a charge the company denies.