Huawei Sells Off Budget Phone Brand As U.S Pressure Bites

Chinese telecom giant Huawei announced Tuesday it has sold its Honor budget phone line to a domestic consortium in a move it said was necessary to keep the brand alive amid “tremendous” supply chain pressures caused by US sanctions.

Honor has been purchased by a group of 40 companies comprised of agents, distributors and other businesses dependent on the brand’s survival, Huawei and the consortium said in separate statements.

Huawei, which earlier this year became the world’s top mobile phone seller, said its consumer business “has been under tremendous pressure” due to a growing inability to acquire components as the US seeks to cut the company off from the global supply chain.

The sale appears aimed at getting Honor out from under the Huawei umbrella, thereby allowing the brand to source components without being affected by the US sanctions.

The sale is the latest sign that Huawei — also the world’s largest supplier of telecommunications networking equipment — is being squeezed hard by the US campaign against it.

The administration of President Trump alleges that Huawei has close ties to China’s government and military and that the equipment it has installed globally could be used by Beijing for espionage.

Both China’s government and the company have denied the accusation.