According to analyst Ming-Chi Kuo, who we know mainly from his Apple predictions, Huawei considers divesting sub brand Honor. Being independent, Honor would no longer be affected by the American trade ban.
Although no decision has been made yet, the idea of separating daughter Honor from parent company Huawei is definitely on the table. Honor is an online-only sub brand primarily aiming a young audience. Once separated from Huawei, Honor would no longer suffer from the strict import rules imposed by the U.S. government on Huawei. The latter currently suffers a lot from this, especially for the purchase of chips such as processors.
The choice may still depend on how the American people vote in the upcoming presidential election. If Trump is not reelected, his successor could have a different China policy, making the divestment unnecessary. Besides smartphones, Honor nowadays also makes smartwatches, wireless earplugs and even laptops. Most of these use chips designed by Huawei himself.
Transition to alternative
The supply of new chips is stalling because Huawei is no longer allowed to buy chip machines from Western companies, nor is it allowed to purchase licenses for its design. Earlier, Google denied Huawei access to Android services such as the Play Store and Gmail. Huawei is still struggling to find an alternative to this. It developed its own alternative app store but also its own operating system called HarmonyOS. In September, Huawei announced version 2.0 of this with the intention of equipping several Huawei phones. With this, Huawei has started the transition to its own alternative for Android. A step that will most likely also apply to Honor.