Huawei reportedly mulling state bailout for premium smartphone business

With the separation of Honor having gone according to plan, Huawei is now reportedly considering the same manoeuvre for its own-brand premium smartphones.

The goss comes courtesy of Reuters, which says it has been chatting to a couple of people who know a thing or two. Those sources revealed Huawei is in early-stage talks to sell its premium smartphone brands, P and Mate. As ever with such talks, they might not amount to anything, but the mere fact they’re happening illustrates the dire position Huawei’s smartphone business finds itself in thanks to US sanctions.

If they are happening, that is. Reuters got the following statement from a Huawei spokesperson: “Huawei has learned there are unsubstantiated rumours circulating regarding the possible sale of our flagship smartphone brands. There is no merit to these rumours whatsoever. Huawei has no such plan.”

While it’s easy to dismiss such rumours, it would be surprising if Huawei wasn’t exploring contingencies for its smartphone business. At the premium end there’s no avoiding US vendors such as Qualcomm, so it’s hard to see how the P and Mate series can keep going in the current circumstances.

The good news for Huawei is that that the Chinese state is only too happy to help its own companies out, while at the same time complaining whenever anyone else flouts WTO rules. The Honor smartphone sub-brand was rescued by a consortium that includes a bunch of state representatives and the Reuters story alleges the Shanghai government is involved in these talks. If we take Huawei’s denial at face value, the question still remains of what it intends to do to save its smartphone business.