Huawei is in talks to sell part of its Honor smartphone unit

US sanctions against Huawei mean that the company’s smartphone business has suffered in a big way. Between its crippled in-house chipset division and the lack of Google support, it’s becoming increasingly tough for the firm to keep producing phones.

These troubles extend to its Honor sub-brand too, but Reuters now reports that Huawei is in talks to sell off parts of the Honor business in a deal potentially worth up to 25 billion yuan (~$3.7 billion).

The report, citing “people with knowledge of the matter,” alleges that Honor’s brand, research and development infrastructure, and associated supply chain management business could be sold under the deal. However, the newswire’s sources caution that this hasn’t been finalized yet.

It’s believed that Huawei will focus on higher-end phones due to the US sanctions. Honor has traditionally been focused on young and/or budget-conscious consumers.

Who would do Huawei the honor, then?

Reuters reports that Honor phone distributor Digital China is considered a front-runner for the deal. However, the newswire adds that TCL and Xiaomi are also in the running.

Selling part of Honor to another business theoretically means that US sanctions wouldn’t apply to Honor-branded devices produced as part of this arrangement. It isn’t immediately clear what this would mean for Honor devices released prior to a sale though.

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Furthermore, there’s no guarantee that the US government wouldn’t simply play whack-a-mole and apply sanctions to any company that acquires part of Honor. Huawei and Honor are intertwined in several ways, particularly when it comes to components used and research and development. So extricating large chunks of the sub-brand from its parent company will likely be a major challenge in this regard.

We’ve contacted Huawei and Xiaomi for comment regarding an apparent Honor sale and will update the article if/when they get back to us. Do you think selling Honor is a good idea for Huawei? Take our poll further up the page!

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