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(Economic observation) Huawei’s broken arm survives the glory of the self-help industry chain
China News Agency, Beijing, November 17 (Reporter Liu Yuying) Huawei issued a statement on the 17th confirming the sale of its glory and will no longer hold shares of the glory once the transaction is completed. Analysts believe that this is a choice that Huawei has to make, and it is also a self-help for Huawei and Honor.
Affected by the chip “supply outage”, Huawei’s mobile phone market share declined in the third quarter. According to data recently released by market research firm Canalys, Huawei shipped 51.7 million mobile phones in the third quarter of 2020. In the third quarter of 2019, it was 66.8 million units, a year-on-year decrease from 2. 3%. The market share fell from 19% to 14.9%.
Huawei’s consumer business executive director Yu Chengdong said that when Huawei launched the Mate40 series of mobile phones in late October, the Mate40’s scheduled volume had exceeded supply capacity.
The pace of Honor’s mobile phone business has also slowed, and some product plans have been temporarily shelved. As a community of interests, employees, supply chains and distributors are under increased pressure.
Zhong Xinlong, a researcher at the Information and Software Research Institute at CCID Think Tank, told a reporter from the China News Agency that in the case of limited supply of chips, Huawei can only use the arm-breaking method to save itself. and package and sell part of your business.
In the future, even if Huawei can get some Qualcomm or MediaTek chips, the number will be limited. The United States will not allow Huawei to become the world’s second largest mobile phone maker.
He introduced that, broadly speaking, large companies will consider dividing this approach when faced with severe crises. In the past history of the United States, many companies were forced to split due to antitrust laws. Huawei’s division this time around is the right choice and a choice that must be made.
More than 30 companies that acquired Glory stated that “this acquisition is a market-oriented, self-help investment initiated by the Glory-related industry chain” that can maximize the protection of the interests of consumers, channels, suppliers, partners and employees .
Under the acquisition agreement, Shenzhen Zhixin New Information Technology Co., Ltd. will complete the acquisition of Honor. The company was established on September 27, 2020. It was jointly invested and established by Shenzhen Smart City Technology Development Group and more than 30 Honor agents and distributors.
Shenzhen Smart City Technology Development Group is wholly owned by the Shenzhen State Asset Supervision and Administration Commission and owns 98.6% of the shares of Shenzhen Zhixin New Information Technology Co., Ltd.
Established in 2013, Glory is a mobile phone brand that targets young people and is positioned in the lower price range. Currently, it ships 70 million mobile phones a year.
In addition to mobile phones, Honor has diversified its design around mobile phones, creating eight main inputs for tablets, televisions, speakers, glasses, watches, cars, headphones, and PCs. In the age of the Internet of Everything, wearable devices, smart homes, smart devices, etc. they will be the power and growth points of glory.
Fu Liang, an independent telecom analyst, believes that Honor’s top management and team will remain stable. Distributors and agents who invest in New Honor will only enjoy the financial return on their investment in the future and will not participate in decision making. This is to give confidence to the outside world.
Industry experts believe Honor’s development prospects after independence hinge on whether it can solve the problem of supply chain bottlenecks. If chips can be bought overseas without a hitch, Honor’s independence will be a new beginning.
Several industry observers interviewed believe that after Honor and Huawei part ways, if they cannot successfully purchase foreign chips, they will still face serious supply chain problems. (End up)
