The newly independent Honor plans to increase its low-end smartphone unit production by 40%. This makes it about 100 million units in 2021 and it has also sounded out the US parts makers about supplies, according to a report by Nikkei Asia.
Huawei has sold its sub-brand Honor last month due to the pressure from US sanctions and the brand’s supply chain.
In 2021, Honor plans to make around 100 million phones while Huawei plans to ship approximately 60 million units. The combined 160 million units represent a decline of around 20% from Huawei’s overall production plan for 2019.
A hurdle that could occur for Honor is the US approval for suppliers. However, these suppliers are reportedly expected to sign deals with the company later this month.
Huawei spun off the brand last month in an attempt to get around a U.S. export ban. Now as the unit plans to boost production, uncertainties linger as to whether it will be able to procure parts — a matter that can only be settled by a decision from the U.S. government, according to the report.
An investment company funded by the municipal government of Shenzhen, Guangdong Province, will provide funding for the new spinoff.
Alongside, Qualcomm stated earlier this month that it was in talks with the newly independent company Honor, while chipmaker MediaTek is reportedly gearing up to supply the kind-of-but-not-really-upstart brand in 2021.
“The leading mobile chipmaker has held preliminary talks with Honor executives and that Qualcomm is pleased that the market has a new entrant,” Cristiano Amon, President of Qualcomm, said earlier this month.
Due to the US ban, Huawei is not being able to produce high-end SoCs any further as Honor has traditionally relied on in-house Kirin processors for its top-end phones.
According to U.S. market researcher IDC, Huawei held a 14.7% share of the global smartphone market in the July-September quarter, down 5.3 % points from the previous quarter, due to U.S. sanctions.
The key factor role of this situation will play a role in the U.S. Department of Commerce’s upcoming decision is whether incoming President Joe Biden, who will be inaugurated on January 20th, 2021, will carry over the policies of the Donald Trump administration.