SHANGHAI -- Chinese telecom giant Huawei said Tuesday it had sold its Honor budget phone line to a domestic consortium in a move it said was necessary to keep the brand alive amid "tremendous" supply chain pressures caused by U.S. sanctions.
Honor has been purchased by a group of companies comprised of agents, distributors and other businesses dependent on the brand's survival, Huawei and the consortium said in separate statements.
Huawei, one of the world's top three mobile phone sellers, said its consumer business "has been under tremendous pressure" due to a growing inability to acquire components as the U.S. seeks to cut the company off from the global supply chain.
"This sale will help Honor's channel sellers and suppliers make it through this difficult time," said Huawei, based in the southern Chinese city of Shenzhen.
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The sale is the latest sign that Huawei -- also the world's largest supplier of telecommunications networking equipment -- is being squeezed hard by the U.S. campaign against it.
The administration of President Donald Trump alleges that Huawei has close ties to China's government and military and that the equipment it has installed globally could be used by Beijing for espionage.
Both China's government and the company deny the accusation and say that the United States has never produced any evidence backing up its allegations.
Washington has taken steps to bar Huawei from the U.S. market and prevent U.S. companies doing business with it, has moved to cut off its access to global supplies of semiconductors and other components, and pressured other countries to shun Huawei telecom gear.
Huawei officials have said the attacks are motivated more by a U.S. desire to bring down a successful business rival.
Honor is a line aimed primarily at younger or more budget-conscious buyers. Huawei said more than 70 million Honor units are sold annually.
"This acquisition represents a market-driven investment made to save Honor's industry chain," said the consortium of buyers, Shenzhen Zhixin New Information Technology Co.
"It is the best solution to protect the interests of Honor's consumers, channel sellers, suppliers, partners, and employees."
Huawei said it will no longer "hold any shares or be involved in any business management or decision-making activities in the new Honor company".