There have been rumors that Huawei may consider partially splitting its consumer business (CBG) and transferring some research and development teams from its handset business to Honor in order to cope with the chip sanctions. However, Huawei insiders denied this statement, saying that “the consumer business (terminal business) is an important focus of Huawei’s efforts in the enterprise market. The possibility of a large-scale spin-off of Huawei’s consumer business is unlikely”.
Due to the limitation of chips, the revenue scale of Huawei’s consumer business has shrunk significantly. However, Huawei has not given up on this area. It rebranded it and began to enter the commercial terminal market in a comprehensive way. Last year, Huawei launched a range of commercial notebooks, desktops, monitors, tablets, and other products. At the same time, it has built a dual ecosystem of hardware and software, with the two operating systems HarmonyOS and Euler as the core.
Some experts believe that if Huawei spins off its consumer business, it will affect its positioning in areas such as health, display and metaverse, as well as the development of HarmonyOS and Euler systems. At the same time, Huawei also has plans to enter the gaming and digital currency industries. So it needs the consumer business as a foundation. Therefore, the cost of spinning off the consumer business is too high.
Another expert pointed out that spinning off some limited businesses can reduce risks and increase cash flow. In November 2020, Huawei sold the assets of its Honor brand and achieved good results. For Huawei, while maintaining its core business, it must also strive to break through the difficulties in chip manufacturing technology and cooperate with the domestic semiconductor industry chain.
We can say that this film has allowed Honor to be presented as an independent brand. In this respect, it’s hard to believe that Huawei will jeopardize Honor.