Huawei has been facing pressure due to chip restrictions. This has led to a decline in its consumer business revenue. There have been rumors that Huawei may partially split its consumer business. And transfer some mobile phone R&D teams to Honor to cope with these challenges. Well, the insiders have spoken about the Huawei consumer business, and now we know if Huawei is really splitting up its consumer business or not.
Is Huawei Spinning Off Restricted Businesses?
According to Securities Daily, Huawei may consider a partial split of its consumer business due to chip restrictions. However, insiders deny these rumors. They stated that the consumer business is important for Huawei’s enterprise market. Huawei has renamed its consumer business as the terminal business. Moreover, they launched various commercial products, such as notebooks, desktops, monitors, and tablets.
Experts warn that divesting the consumer business could negatively impact Huawei. It could affect the company’s health, display, and metaverse fields. As well as the development of their in-house software. Additionally, Huawei needs the consumer business for the future. As the company has s plans to enter the gaming and digital currency industries. Thus, the cost of spinning off the consumer business would be too high.
However, some experts suggest that spinning off restricted businesses can reduce risk and increase cash flow. In November 2020, Huawei sold its brand Honor assets and achieved good results. Huawei needs to address chip manufacturing technology challenges and collaborate with the domestic semiconductor industry chain while maintaining its core business.
Huawei splitting consumer business is a false myth, but still, the tech giant is in deep waters
Huawei denies the possibility of a large-scale spin-off of its consumer business. Emphasizing its importance to their enterprise market. Huawei has renamed its consumer business as the terminal business. They are focusing on the commercial terminal market. Though, there are some perks to spinning off restricted businesses. As it may reduce risk and increase cash flow. That being said, it is still a hard time for Huawei. Hopefully, the Chinese tech giant finds the solution to the problem so they can enter the global market again.