Honor, the smartphone brand Huawei sold off, regains share in China

GUANGZHOU, China — Honor, the smartphone model Huawei spun off final yr, is starting to regain share in China’s fiercely aggressive cell phone market.

Honor notched a 15% market share in China in August, making it the third-largest smartphone participant within the nation — the primary time it has held that place in a yr, Counterpoint Analysis mentioned in a report on Wednesday.

The smartphone firm trails home rivals Oppo and Vivo. Gross sales of Honor gadgets rose 18% in August in comparison with July, making it one of many quickest rising manufacturers in China.

In November, Huawei sold its budget brand Honor to a consortium of consumers together with the federal government of Shenzhen, town the place its headquarters is situated.

Huawei did that to make sure Honor survived as a result of U.S. sanctions on the Chinese technology giant cut off supplies to key components and crippled its smartphone business, which included Honor at the moment. Promoting it off allowed Honor to get entry to the important thing elements like semiconductors once more.

“After being spun off from Huawei, Honor was in a position to restore ties with element gamers,” Tarun Pathak, analysis director at Counterpoint Analysis, mentioned in a press launch. “Since then, leveraging its sturdy R&D [research and development] capabilities, Honor has launched new merchandise and has been on a fast restoration path in China.”

In January, Honor launched a mid-range phone called the V40, adopted by the Honor 50 in June. This month, it launched the upper finish Honor 3 collection of smartphones which will likely be launched in China and different world markets together with Europe.

“Honor can also be concentrating on the premium section with the Magic collection, thus increasing its portfolio throughout value bands,” Pathak mentioned.

“There was additionally a pent-up demand from the loyal Huawei and Honor customers who held on to their gadgets and didn’t swap to different manufacturers. Its sturdy relationships with distributors additionally helped Honor relaunch merchandise on a big scale. Honor’s resurrection will additional intensify competitors within the Chinese language market in H2 2021,” Pathak mentioned.

Honor is concentrating on world markets however success there may be more durable to search out. Its world market share hit 3.7% in August, up from 1.5% in February, however that’s primarily because of good points in China, Neil Shah, analysis director at Counterpoint Analysis, instructed CNBC.

In worldwide markets, Honor will face stiff competitors from the likes of Apple and Samsung, in addition to China’s Xiaomi, which as continued to steal the market share lost by Huawei.

“Development outdoors China is more likely to be gradual, as loyalty within the mid-segment stays low and Honor will even should rebuild its distribution community. Then, there are additionally intensifying element shortages which might probably hinder Honor’s growth in 2021,” mentioned Varun Mishra, senior analyst at Counterpoint Analysis, in a press launch.

Mishra was referring to the shortage of semiconductors that’s at the moment affecting industries throughout the board from autos to client electronics.