Technology

Honor, the offered smartphone model Huawei, is regaining stake in China

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A citizen shows the Honor 50 smartphone in Shanghai, China on June 16, 2021.

VCG | Visual China Group | Getty Images

GUANGZHOU, China – Honor, the smartphone brand Huawei that was split off last year, is beginning to regain market share in the highly competitive Chinese mobile phone market.

Honor had a 15% market share in China in August, making it the country’s third-largest smartphone player – the first time it has held that position in a year, Counterpoint Research said in a report on Wednesday.

The smartphone company is behind domestic rivals Oppo and Vivo. Honor device sales rose 18% in August compared to July, making it one of the fastest growing brands in China.

In November, Huawei sold its budget brand Honor to a consortium of buyers including the government of Shenzhen, the city where its headquarters are located.

Huawei did so to ensure Honor survived because U.S. sanctions against the Chinese tech giant cut key component shipments and crippled its smartphone business, which Honor was then part of. The sale enabled Honor to regain access to key components such as semiconductors.

Honor’s resurrection will further intensify competition in the Chinese market in the second half of 2021.

Tarun Pathak

Research director, counterpoint research

“After the spin-off from Huawei, Honor was able to reestablish links with component suppliers,” said Tarun Pathak, research director at Counterpoint Research, in a press release. “Since then uses its strong R&D [research and development] Honor has launched new products and is on a fast recovery path in China. “

Honor launched a mid-range phone called the V40 in January, followed by the Honor 50 in June. This month, it launched the Honor 3 series of high-end smartphones that will be launched in China and other global markets including Europe.

“With the Magic series, Honor is also targeting the premium segment and is thus expanding its portfolio across price ranges,” said Pathak.

“There was also a lot of catching up to do with the loyal Huawei and Honor consumers, who stuck to their devices and did not switch to other brands. The close relationships with the distributors also helped Honor bring products to the market on a large scale Honor’s revival will continue to intensify. ” Competition in the Chinese market in the second half of 2021, “said Pathak.

Honor targets global markets, but success may be harder to find there. Its global market share reached 3.7% in August, up from 1.5% in February, but that’s mainly due to gains in China, Neil Shah, research director at Counterpoint Research, told CNBC.

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In international markets, Honor will face stiff competition from Apple and Samsung, as well as China’s Xiaomi, which continue to steal the market share that Huawei has lost.

“The growth outside of China is expected to be gradual, as loyalty in the middle segment is still low and Honor also has to rebuild its sales network. Then there are also increasing component shortages that are likely to hamper Honor’s expansion in 2021, ”said Varun Mishra, senior analyst at Counterpoint Research, in a press release.

Mishra was referring to the semiconductor shortage currently affecting industries from automotive to consumer electronics.

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