China Mobile Ltd. buy stakes in Honor Device Co., giving a boost for a fast-expanding smartphone brand that was spun out of Huawei Technologies Co. four years ago. China Mobile Communication Co., the parent of the nation’s leading mobile operator, has invested in the handset company, Honor said in a statement emailed to Bloomberg News. That marks the start of an alliance with a smartphone brand ranked fourth in China shipments in the June quarter, according to IDC.
Shenzhen-based Honor split off from Huawei Technologies Co. in 2020, averting US trade sanctions that stifled the larger company’s mobile business. Backed primarily by local government entities, the firm is making preparations for an initial public offering and also counts display maker BOE Technology Group Co. as an investor.
The new investment gives China Mobile access to a smartphone maker just as the market starts to recover from a post-Covid funk. Average revenue per mobile user for Chinese carriers is slipping, subscriber growth is meager and digital services demand is slowing, according to analysts . Honor has also made inroads internationally with its best devices and a rising range of foldable handsets.
“Both parties will give full play to their respective advantages and jointly provide consumers with a better and more innovative experience”, said an Honor spokesperson.