In a farewell speech, Ren Zhengfei who is the founder of Huawei, the Chinese multinational technology firm, called on employees of its departing Honor subbrand to seek to surpass its parent as the tech giant sells the budget brand to keep its sanction-hobbled supply chains alive.
Earlier this month, Huawei Technologies said it would sell Honor to a new entity, named Shenzhen Zhixin New Information Technology, formed by its distributors and retailers, so it could resume sourcing components that are currently restricted by US sanctions.
Since 2018, the US has rolled out a campaign against Huawei by citing national security concerns and stirred up bans against the use of its 5G equipment in countries from the UK to Japan. Finally, the White House enforced restrictions against suppliers this year, hindering Huawei’s procurement of ready-made semiconductors to continue its business.
“Wave after wave of severe US sanctions against Huawei has led us to finally understand, certain American politicians want to kill us, not just correct us,” Mr. Ren said.
While Huawei could overcome the difficulties, “millions” of employees at Honor’s agents and distributors around the world would lose their jobs as sales channels dried up, Mr. Ren’s speech said.
“We don’t have to drag innocent people into the water just because we suffer,” he said.
According to reports, Honor-brand smartphones made up 26 percent of the 51.7 million handsets shipped by Huawei in July-September. Laptops, tablet computers, smart TVs and electronic devices are all part of the company’s product range.
The budget smartphone has gained immense popularity among the younger population in recent years and even expanded its business to overseas markets like Europe. But it is still unclear if the current Honor spin-off will help to restart the chip supply to its new owners.
The rivals of Huawei have significantly raised production orders, hoping that they can absorb market share while Huawei cannot produce new handsets, several industry sources said. If Honor could resume production, it could retain market share, they added.
Mr. Ren called on Honor to become Huawei’s biggest competitor after the “divorce,” and said toppling Huawei should “become your slogan for motivation. We are your competitors in the future,” he said.