The smartphone brand that Huawei sold off is regaining market share in China

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  • Counterpoint Research said that Honor captured 15% market share in China in August, making it the third largest smartphone player in the country.
  • In November, Huawei shut down Honor to ensure the brand’s survival as US sanctions on the Chinese tech giant cut supplies of 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 continues to steal the market share lost by Huawei.

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GUANGZHOU, China – Smartphone brand Huawei shut down last year, beginning to gain share in China’s fiercely competitive mobile phone market.

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In a report on Wednesday, Counterpoint Research said that Honor captured 15% market share in China in August, making it the third largest smartphone player in the country.

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

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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 this to ensure that Honor survived as US sanctions on the Chinese tech giant cut supplies of key components and crippled its smartphone business, which at the time included Honor. Selling it again allowed Honor to gain access to key components such as semiconductors.

Honor’s resurrected H2 in 2021 will further intensify competition in the Chinese market.
Tarun Pathak
Director of Research, Counterpoint Research

“Following the separation from Huawei, Honor was able to restore the relationship with the component players,” said Tarun Pathak, research director at Counterpoint Research, in a press release. “Since then, leveraging its strong R&D [research and development] capabilities, Honor has launched new products and is on a fast recovery path in China.”

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

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

“There was also a drop in demand from loyal consumers of Huawei and Honor, who stuck to their devices and did not switch to other brands. Its strong relationships with distributors also helped Honor relaunch the products in a big way. The revival of Honor will intensify. Competition in the Chinese market in H2 2021,” Pathak said.

Honor is targeting global markets but finding success there may be difficult. Its global market share was 3.7% in August, up from 1.5% in February, but this is mainly due to gains in China, Neil Shah, director of research at Counterpoint Research, told Businesshala.

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

Varun added, “Growth outside China is likely to be gradual, as loyalty remains low in the mid-segment and Honor will have to rebuild its distribution network. Then, the component shortage may also accelerate which is expected by 2021.” may hinder the expansion of Honor. Mishra, senior analyst at Counterpoint Research, said in a press release.

Mishra was referring to the shortage of semiconductors which is currently affecting industries ranging from auto to consumer electronics.

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