Huawei spin-off Honor takes aim at Samsung in foldables; shrugs off U.S. sanction concerns

The Honor Magic Vs is on show at Honor’s stand at Cellular World Congres in Barcelona. The close to $1,700 machine is Honor’s try and problem Samsung within the foldable smartphone market.
Arjun Kharpal | CNBC

Honor CEO George Zhao has a easy philosophy — make one of the best merchandise and the gross sales numbers for the Chinese language smartphone maker will comply with.

In a wide-ranging and uncommon interview with world media, Zhao addressed the corporate’s technique to compete with the likes of Apple and Samsung and hinted at a brand new foldable cellphone forward.

He additionally shrugged off considerations that Honor, which was spun off from Huawei, may probably be hit with the identical U.S. sanctions that crippled its former guardian firm’s enterprise.

Honor takes purpose at Apple and Samsung

Honor launched its Magic Vs foldable cellphone outdoors of China this week, with a price ticket of almost $1,700. It additionally took the wraps off the Honor Magic5 Professional, its high-end flagship cellphone.

Underneath Huawei, Honor centered on mid-tier smartphones. However the firm is now trying to faucet the high-end market the place Apple and Samsung dominate.

Zhao is conscious of the challenges Honor faces in its pursuit and it is taking a cautious strategy to development.

“Our ambition [is to] do issues higher for at the moment … and in future, we have now the goal is easy methods to fulfill our buyer. And in addition easy methods to construct belief and relationships with our companions. And these two issues, [if] we make this wholesome, then the expansion, the goal, the gross sales quantity will come to us mechanically,” Zhao stated.

“When you simply pursue greater quantity … lastly you’ll lose it.”

Honor solely launched its first telephones outdoors of China final 12 months after being bought off from Huawei in 2020. And it is a powerful time for Honor to leap into the market. In 2022, smartphone shipments fells to their lowest level since 2013. Nevertheless, high-end smartphones, people who price over $800, accounted for 18% of the entire handset market in 2022, up from 11% in 2020, Canalys knowledge exhibits.

That is why Honor is chasing this class. However Honor nonetheless lags Apple and Samsung.

The corporate’s worldwide market share stood at 4.6% in 2022 versus 21.2% for Samsung and 18.3% for Apple, in accordance with Counterpoint Analysis knowledge.

Extra foldables forward

On the Cellular World Congress in Barcelona this week, Honor had an enormous stand displaying off its newest wares, underscoring its ambition to be a worldwide participant. It was proper subsequent to Samsung’s exhibition, highlighting its want to be seen in the identical vein because the South Korean big.

Honor had a big poster for the Magic Vs with the tagline: “Unfold your magic.”

Honor offered a giant stand at Cellular World Congress in Barcelona, the world’s greatest cellular present. The corporate confirmed off its newest flagship gadgets together with the Magic Vs.
Arjun Kharpal | CNBC

The foldable was the star of Honor’s present. Foldable gadgets have been pioneered by Samsung, which launched its first smartphone of this sort in 2019. Different corporations, primarily Chinese language, have adopted. And they’re now beginning to launch them on the worldwide stage. These smartphones have a bendable display.

Oppo launched its Find N2 Flip last month whereas the CEO of Lenovo, which owns Motorola, advised CNBC another Razr foldable phone can be launched this 12 months.

Foldables accounted for simply 1.1% of complete smartphone shipments in 2022, in accordance with analysis agency IDC, and are solely anticipated to extend to 2.8% in 2026. However Zhao believes there’s a future for these gadgets, at the same time as he acknowledged challenges together with the burden and battery life of those smartphones at the moment.

Zhao wouldn’t be drawn into discussing gross sales targets however stated he’s centered on making one of the best foldable merchandise which in flip will assist its development.

“Our ambition and goal is develop one of the best foldable cellphone, so be the primary expertise for foldable telephones. And if we do that, I consider the market will turn into higher and higher, and the model, all this stuff can develop primarily based on this product,” Zhao advised CNBC.

The Magic Vs at the moment folds like a ebook. Different companies together with Samsung and Oppo have launched gadgets that fold upward like a standard flip cellphone. Honor doesn’t have a smartphone like this however Zhao stated the corporate is “critically” contemplating it.

“We have now this consideration, to be frank. How and when, I can not disclose an excessive amount of. However that course we … critically think about that,” he stated.

Honor’s Huawei historical past

Honor was a model underneath Chinese language telecommunications big Huawei. However U.S. sanctions in 2020 reduce Huawei off from essential chips and entry to Google’s Android software program, which crippled the firms mobile business. Huawei at one level was primary on the earth.

To assist the model survive, Huawei sold off Honor in 2020 to a consortium of patrons that included the federal government of Shenzhen, the town the place the corporate is headquartered.

That allowed Honor to regain entry to the essential chips and software program it wants. Honor launched its first phone as an independent brand in January 2021.

To this point, Honor has remained out of the geopolitical and expertise tussle between the U.S. and China. And CEO Zhao just isn’t apprehensive about sanctions just like these placed on Huawei finally being placed on an impartial Honor.

“Why would we fear about this? Our enterprise mannequin is like Oppo, Vivo and Xiaomi,” Zhao stated, referencing different Chinese language smartphone makers which have additionally not had any sanctions levied in opposition to them.

“We offer to the trade and to the tip shopper, and in addition to the market, to our companions, we offer our worth. Additionally you understand that is the open competitors and open market. We comply with all of the coverage, we develop our enterprise in that nation.”


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