Honor, Spun Off from Huawei, Surpasses Xiaomi to Become 3rd in China's Smartphone Market

[Asia Economy Reporter Eunmo Koo] Honor, a Chinese smartphone brand separated from Huawei, has recently surpassed Xiaomi to rank third in the Chinese smartphone market, showing rapid growth.

According to market research firm Counterpoint Research on the 1st, Honor overtook Xiaomi last month to become the third-largest smartphone brand in China. Honor recorded a market share of 15% in the Chinese market last month, growing 18% compared to the previous month.

Tarun Pathak, Director at Counterpoint Research, explained, “After separating from Huawei, Honor was able to restore relationships with component suppliers, and subsequently leveraged strong research and development (R&D) capabilities to launch new products, showing rapid recovery in China. The Honor 50 series achieved immediate success in the mid-range segment, and the Magic series is expanding the portfolio across price ranges targeting the premium segment.”

He added, “There was also latent demand from loyal Huawei and Honor consumers who did not switch to other brands. Strong relationships with distributors helped Honor to relaunch existing products on a large scale, and this revival of Honor is expected to intensify competition in the Chinese market in the second half of this year.”

Since last year, the competitive landscape of the Chinese smartphone market has changed rapidly. Oppo, Vivo, and Xiaomi have aggressively expanded their presence in China in terms of products, market share, and distribution, and Apple, ahead of the iPhone 13 launch, is also likely to absorb Huawei’s premium segment.

Varun Mishra, a researcher at Counterpoint Research, stated, “Honor is expected to further expand its portfolio across price points and regions. However, growth in market share outside China is expected to be gradual due to low brand loyalty in the mid-range segment and the need for Honor to rebuild its distribution network.” He added, “As component shortages worsen, Honor’s expansion may be hindered, but Honor is extending its reach beyond smartphones with the 1+8+N strategy, expanding into devices such as laptops, tablets, and wearables.”

Currently, Huawei’s sales have sharply declined due to U.S. trade sanctions, but Honor, which spun off from Huawei, is showing a clear recovery and is considered to be one step closer to recreating Huawei’s former glory. Counterpoint Research noted, “However, potential additional U.S. sanctions on Honor could pose a significant obstacle.”