Thursday, 30 September 2021 11:01

Budget smartphone firm Honor took third spot in China in August

Budget smartphone firm Honor took third spot in China in August Courtesy Honor

Honor, the budget smartphone line formerly owned by Huawei, has become the third highest selling device in China, overtaking Xiaomi, the technology analyst firm Counterpoint Research says.

Counterpoint did not provide numbers, but said the brand had increased its sales by 18% month-on-month in August making it one of faster growing brands.

vivo was the top brand in August with 23% of the market while OPPO grabbed 21%. Honor was third with 15%.

Honor's success has not gone unnoticed in the US, with some government agencies reported to be debating whether to place it on an export blacklist, the same as was done to Huawei.

According to the Washington Post, four agencies "couldn’t agree on whether a business that Huawei sold last year posed a significant threat to US national security". The Pentagon and Energy Department wanted to blacklist Honor, while the Commerce Department and the State Department were opposed.

Honor was sold to a group of 30 agents and dealers operating under the name Shenzhen Zhixin New Information Technology in November last year.

counterpoint honor

Huawei decided to sell the unit because of its financial issues, with its own business affected by the lack of top-line chips and also its inability to use Google's proprietary mobile apps due to American sanctions.

The last time Honor made an appearance in the top three among smartphone vendors was in August last year.

Commenting on the brand's showing, Counterpoint 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.”

Counterpoint senior analyst Varun Mishra said over the last 12 months, a reshuffle had taken place 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," he said.

"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.”

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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