Everyone knows the history of Huawei. In 2019-2020, the US government decided to ban Huawei and many other Chinese companies from using hardware or software originating in the United States. This has led the former Chinese technology giant to make painful decisions. First, Huawei released its subsidiary Honor. The latter had a mission to increase Huawei’s sales on online platforms. Second, Huawei has accelerated the development of its own Harmony OS. Third, although the company did not withdraw from the smartphone market, it decided to change the focus on smart home appliances, cars and products with a larger screen. In short, Huawei before 2020 and Huawei after the year are two different companies. But has Huawei successfully delegated its smartphone business to Honor? Well, let’s rephrase the question. Can Honor cope with the tasks set by Huawei and completely replace Huawei?

Further reading: Bye-bye Huawei! The honor surpassed its master, conquering China

200% growth rate in China

Recently, Canalys publishes a report. According to him, shipments of smartphones in China fell sharply by double digits in the first quarter. In total, companies could sell 75.6 million units, down 18% year-on-year and quarterly down 13%. This is the worst result of eight quarters.

These results are equal to 2020. However, after the epidemic eased, the smartphone market in China reached 27% growth. In the first quarter of 2022, the epidemic returned to the fog. So this seems to be deja vu.

When we talk about the 20% decline in the Chinese smartphone market, there is every reason to think that all smartphone manufacturers in this region will also be affected. But this is not about Honor. Deliveries of the former Huawei brand increased by more than 200% on an annual basis. In addition, its market share reached 20%. Honor and Apple are the only brands to grow. So we can say that Honor presents itself as the more experienced Apple.

Canalys: Chinese smartphone market q1 2022

Of course, the market liberated by Huawei is still eye-catching for mobile phone manufacturers. But only Honor could fill the gap. Its deliveries increased by 6% compared to the previous quarter. In other words, Honor can reach such heights only through hard work.

Canalys: Chinese smartphone market q1 2022

On the other hand, we still can’t compare Honor to Huawei’s peak. In 2019 and 2020, Huawei’s mobile phone shipments could reach a staggering 30 million or even 40 million each quarter. Thus, Huawei had a difference of 15 million or even 25 million units compared to other brands. In this sense, although Honor ranked second in the first quarter of 2022, OPPO, which was in third place, sold only 200,000 units less.

Will the honor be inscribed?

Recently, we heard that Honor is considering an internal listing in 2022, seeking an estimate of $ 45 billion. Although Honor has denied the rumors, we still believe it will happen in the near future.

In an interview with Honor CEO Zhao Ming in an interview on April 25, 2022, he said that since becoming independent of Huawei, Honor’s performance has grown steadily.

Honor CEO George Zhao

“Diversification of shareholders and capital is the meaning of the company. The latter can attract more resources to help the company grow. “

We assume that this is a clear hint that Honor intends to land on the capital market.

In addition, in November 2020, some insiders said that after being sold by Huawei, Honor will retain most of its management team and more than 7,000 employees and plans to go public within three years.

In August 2021, Honor distributors said Honor had notified major distributors that they could be listed in the near future and could purchase original shares with a subscription amount ranging from 5 million to 50 million yuan ($ 750,000). – $ 7.5 million).

Honor Huawei

In early April 2022, some Honor employees revealed that Honor required employees to buy shares in the company.

After independence, Honor will completely get rid of the negative influence of Huawei. But through Honor’s multi-layered shareholder structure, it still has strong experience with government assets. This may lead to certain risks to Honor’s policy.

Do not repeat the mistakes of Huawei

For example, in August 2021“On August 6, a group of 14 Republicans in the United States House of Representatives asked the US Department of Commerce to add the former Huawei Honor smartphone to the government’s official economic blacklist.

Brand Honor

If Honor manages to land on the capital market, the share of private equity will increase. So in the future, like Xiaomi, it is free to buy European and American semiconductors. From this point of view, the list is of great importance both for reducing Honor’s business risks and for helping to expand it.

However, there are serious difficulties in including Honor on the list. The financial listing standard is that the company must make consistent profits over the last three fiscal years. Plus, the accumulated net profit should exceed 30 million yuan ($ 4.5 million). Given that Honor has only been independent for about a year and a half, it clearly does not meet the requirements.

Conclusion

Honor is not yet Huawei. But the company is constantly growing. If it does not repeat the mistakes that Huawei made, there is every reason to believe that Honor will compete with the best brands on the world market. But will the United States allow the emergence of a new Huawei?


Honor Is Hanging By A Thread, But Ex-Huawei Brand Can Break Through

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