China's Huawei reportedly in talks to sell premium smartphone brands P and Mate
China's Huawei Technologies is in early-stage talks to sell its premium smartphone brands P and Mate, two people with direct knowledge of the matter said, a move that could see the company eventually exit from the high-end smartphone-making business.

The talks between the world's largest telecommunications equipment maker and a consortium led by Shanghai government-backed investment firms have been going on for months, the people said, declining to be identified as the discussions were confidential.

Huawei started to internally explore the possibility of selling the brands as early as last September, according to one of the sources. The two sources were not privy to the valuation placed on the brands by Huawei.

Shipments of Mate and P Series phones were worth $39.7 billion between Q3 2019 and Q3 2020, according to consultancy IDC.

However, Huawei has yet to make a final decision on the sale and the talks might not conclude successfully, according to the two sources, as the company is still trying to manufacture at home its in-house designed high-end Kirin chips which power its smartphones.

"Huawei has learned there are unsubstantiated rumors circulating regarding the possible sale of our flagship smartphone brands," a Huawei spokesman said. "There is no merit to these rumors whatsoever. Huawei has no such plan."

The Shanghai government said it was not aware of the situation and declined to comment further.

The potential sale of Huawei's premium smartphone lines suggests the company has little hope that the new Biden administration will have a change of heart towards the supply chain restrictions placed on Huawei since May 2019, the two people said.

The Shanghai government-backed investment firms may form a consortium with Huawei's dealers to take over the P and Mate brands, according to the second person, a similar model to the Honor deal. Huawei is also likely to keep its existing P& Mate management team for the new entity, if the deal goes through, the two people said.