Earlier this month, Huawei sealed the sale of its Honor smartphone brand to a group of about 30 Honor agents and dealers including China Telecom and some state-run businesses. The incentive behind the deal is the stringent limits that the U.S. has clamped on Huawei.
The restrictions extends to blocking the company from retrieving its U.S. dealers, including Google Mobile Services which has now been replaced by its own ecosystem. The limitations also banned Huawei from using Google’s core apps like Gmail, YouTube, the Play Store, Search, Maps, etc on its international models.
In a well-scripted move one year after the U.S. first placed the company on the Entity List, the Commerce Department initiated an export rule volte-face that prevents manufacturers from spreading chips to Huawei if they were manufactured using U.S. technology except a license was sought. The Trade Department newly modified the rule to say that it would allow Huawei to receive chips but only those suitable for 4G, not 5G. Of course, this rule has significantly slowed the company’s progress in meeting production signs.
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Yesterday, Huawei founder Ren Zhengfei, in a message to Honor employees leaving Huawei, urged them to be more industrious to surpass prospects for the new company. Huawei has already set the mark in excellence as the second-largest smartphone manufacturer in the world. Ren also worried that it was indeed a difficult decision to let go of Honor so as to safeguard the jobs of millions of Honor’s agents and salespeople.