｢NEWS｣ HONOR Becomes Third-largest Smartphone Brand in China

Hey there HONOR fans ?
Check this article about HONOR growing!

KEY POINTS
>HONOR notched a 15% market share in China in August, making it the third-largest smartphone player in the country — the first time it has held that position in a year, Counterpoint Research said.

>In November, Huawei spun off HONOR to ensure the brand’s survival because U.S. sanctions on the Chinese technology giant cut off supplies to key components and crippled its smartphone business.

>In international markets, HONOR will face stiff competition from the likes of Apple and Samsung as well as Xiaomi, which as continued to steal the market share lost by Huawei.

>This is the first time since August 2020 that HONOR has entered the Top 3 smartphone brands’ list in China.

>HONOR’s China sales grew 18% MoM in August 2021, making it one of the country’s fastest growing brands.

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

The smartphone company trails domestic rivals Oppo and Vivo. Sales of Honor devices 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 is located.

Huawei did that to ensure Honor survived because U.S. sanctions on the Chinese technology giant cut off supplies to key components and crippled its smartphone business, which included HONOR at that time. Selling it off allowed HONOR to get access to the key components like semiconductors again.

"HONOR’s resurrection will further intensify competition in the Chinese market in H2 2021." - Tarun Pathak [RESEARCH DIRECTOR, COUNTERPOINT RESEARCH]

“After being spun off from Huawei, HONOR was able to restore ties with component players,” Tarun Pathak, research director at Counterpoint Research, said in a press release. “Since then, leveraging its strong R&D [research and development] capabilities, Honor has launched new products and has been on a rapid recovery path in China.”

In January, HONOR launched a mid-range phone called the V40, followed by the HONOR 50 in June. In September, it launched the higher end HONOR Magic 3 series of smartphones which will be launched in China and other global markets including Europe.

“HONOR is also targeting the premium segment with the Magic series, thus expanding its portfolio across price bands,” Pathak said.

“There was also a pent-up demand from the loyal Huawei and HONOR consumers who held on to their devices and did not switch to other brands. Its strong relationships with distributors also helped HONOR relaunch products on a large scale. HONOR’s resurrection will further intensify competition in the Chinese market in H2 2021,” Pathak said.

HONOR is targeting global markets but success there might be harder to find. Its global market share hit 3.7% in August, up from 1.5% in February, but that is mainly due to gains in China, Neil Shah, research director at Counterpoint Research, told CNBC.

In international markets, HONOR will face stiff competition from the likes of Apple and Samsung, as well as China’s Xiaomi, which as continued to steal the market share lost by Huawei.

“Growth outside China is likely to be gradual, as loyalty in the mid-segment remains low and HONOR will also have to rebuild its distribution network. Then, there are also intensifying component shortages which can likely hinder HONOR’s expansion in 2021,” said Varun Mishra, senior analyst at Counterpoint Research, in a press release.

Mishra was referring to the shortage of semiconductors that is currently affecting industries across the board from autos to consumer electronics.

HONOR surpassed Xiaomi in August 2021 to become the third-largest smartphone brand in China, according to Counterpoint Research’s Monthly Market Pulse Service. HONOR’s sales in China grew 18% MoM in August, making it one of the fastest growing brands in the country.

Commenting on HONOR’s gains in China, Research Director Tarun Pathak said, “After being spun off from Huawei, HONOR was able to restore ties with component players. Since then, leveraging its strong R&D capabilities, HONOR has launched new products and has been on a rapid recovery path in China. The HONOR 50 series has been an instant success in the mid-segment. HONOR is also targeting the premium segment with the Magic series, thus expanding its portfolio across price bands. There was also a pent-up demand from the loyal Huawei and HONOR consumers who held on to their devices and did not switch to other brands. Its strong relationships with distributors also helped HONOR relaunch products on a large scale. HONOR’s resurrection will further intensify competition in the Chinese market in H2 2021.”

The competitive landscape in China has also been changing over the last year. Commenting on this and HONOR’s expansion, Senior Analyst Varun Mishra said, “Over the last year, there has been a reshuffle in the Chinese market. OPPO, vivo and Xiaomi all have aggressively expanded their presence in China in terms of products, market share and distribution. Apple with its iPhone 13 launch also has a significant opportunity to capture Huawei’s premium segment. Therefore, the competition is likely to intensify further in H2 2021. HONOR will be expanding its portfolio further across price segments and geographies. However, market share growth outside China is likely to be gradual, as loyalty in the mid-segment remains low and HONOR will also have to rebuild its distribution network. Then, there are also intensifying component shortages which can likely hinder HONOR’s expansion in 2021. Besides smartphones, HONOR is also expanding into devices like laptops, tablets, and wearables under its 1+8+N strategy, which aims to drive growth in segments beyond smartphones.”

Concluding, HONOR is growing very fast, at least on China! Let's hope this happens overseas too because I can't wait to see HONOR being on top 5 mobile brands on Europe too! Really excited for the HONOR 50 globally launch very soon and hoping it to be a very well received device that will give HONOR the pull it needs to grow on Europe too!

See yha!