Separated from Huawei, Honor smartphones usher in a true "honor" moment

Honor has separated from Huawei and entered the countdown stage.

Although Huawei and Honor have remained silent so far, judging by the pace of Internet communication, from previous rumors to the current media and analysts releasing related news, it seems that Huawei's sale of the Honor mobile phone business as a whole is just a matter of an announcement.

Although Honor was sold due to passive pressure from the times, considering Honor's high share in the smartphone market, an independent Honor may set off a new round of storm regarding market rankings for the entire smartphone industry and consumers.

Huawei abandons its own car to save its own car, while Honor drives ahead

Trump, who has adopted a tough policy of suppressing Huawei, is about to be replaced by Biden, but the US attitude in the core field of semiconductors will not change fundamentally. Huawei should have a clear deduction and long-term judgment on the continuity of the US government's policy. Previously, Richard Yu said in public that "this year may be the last generation of Huawei's Kirin high-end chips."

In this context, Huawei must make a choice: Under the premise of processor quantity, should it focus on high-end or mid-to-low-end?

High-end products can bring high added value and high brand premium. Under the condition of limited chip supply, it is naturally impossible to fully meet the large-scale shipment demand of mid- and low-end products. Therefore, Huawei can only abandon the car to save the driver. It's like the eternal question. When your mother and wife fall into the water, who should you save first?

Judging from the development of the situation, Huawei has made its choice - first protect the Huawei mother body, and then give Honor a way out.

Previously, under the care of Huawei, Honor hardly had to think about strategic issues such as processors, systems, and positioning. Once independent, these issues will become hurdles that Honor will have to overcome.

However, we need to see that as Honor continues to grow, the resources that Huawei can bring and the unique ecosystem formed by Huawei are also becoming invisible constraints that restrict Honor's continued upward development. For example, in the context of competitors' aggressive vertical expansion of the market, Huawei's positioning of Honor as a "tech trend brand for young people" has become a tight ring around Honor's head.

According to current information, after Honor becomes independent, in addition to attracting channel and supply chain forces such as Digital China and TCL, several of Huawei's current middle and senior leaders will also join Honor to increase Honor's competitiveness after its independence.

More importantly, it is rumored that three state-owned institutions will also invest in Honor at the same time. Considering that the Science and Technology Innovation Board has become a "feng shui treasure land" in the technology industry, with the protection of state-owned assets and the brand value accumulated over the years, Honor is likely to gain great recognition and pursuit in the capital market, and this is precisely the top-level resource that Huawei could not have given before.

Therefore, combining these two aspects, although Huawei's move to Honor was due to objective factors such as pressure from the situation, this does not mean that Honor had no independent subjective motivation. On the contrary, Honor, with more resources and fewer constraints, is likely to let go and completely shake up the existing landscape of the entire mobile phone industry.

Glory may be reborn as a result

After becoming independent, Honor will inevitably readjust its current product positioning, which is somewhat "compromising and condescending", as it no longer needs to worry about the impact of Huawei's supply chain.

From the configuration point of view, when the ban is lifted, Honor is likely to directly adopt Qualcomm processors and face competition from Xiaomi, OV and other brands. Based on this, two popular product lines, low-end and high-end, are placed in front of Honor.

In order to take into account the market impression of Huawei's high-end products, Honor has always played the role of "an important gripper of Huawei's mid- and low-end products", so that in the sinking market, Honor's presence has always been weaker than Huawei. In contrast, after Redmi became independent from the Xiaomi brand, its entry-level product Redmi 8 series has exceeded 19 million units in global shipments.

For a sub-brand that has always had a lofty dream, having a parent brand with strong control is indeed a double-edged sword with more disadvantages than advantages.

In the future, when Honor is no longer the gatekeeper of Huawei's mid- and low-end markets, Honor can not only lower its profile to make entry-level phones, but also enter the TOP market to try out the high-end market.

Although Honor has had flagship products before, its products are extremely conservative in terms of configuration and price. For example, the price of Honor 30 is only 2,999 yuan, and it is equipped with the Kirin 985 processor, which is not used by Huawei's high-end products at the same time.

The same goes for low-end products. Once Honor adopts Qualcomm's flagship processor, there is no reason not to launch a "true flagship" product priced at more than 5,000 yuan.

Mobile phone market is on the rise again

The people who are probably the most saddened by Honor's independence are the terminal players in the mobile phone industry.

IDC data shows that in Q3 2020, China's smartphone market shipments were 84.8 million units, down 14.3% year-on-year. Among them, Huawei's (including Honor) shipments were 35 million units, with a market share of 41.1%, down -15.5% year-on-year.

Based on this, leading players including Samsung, Xiaomi and Apple are ready to seize the opportunity to take over Huawei's market share when Huawei's mobile phones cannot meet market demand.

But what makes these manufacturers uneasy is that once Honor becomes independent, all the original plans will be overturned. After Honor becomes independent, it can not only continue to consolidate its market share based on its brand, but also seize the high-end market that it has never touched before. This is undoubtedly a big plot reversal for the manufacturers who are circling like vultures.

In addition, at a time when the domestic mobile phone market dividend is gradually retreating, Huawei's progress in overseas markets is not smooth due to well-known reasons. With the shortage of chips, Xiaomi and OV have repeatedly encroached on the European market that Huawei relies on very much. Lei Jun even said: "Xiaomi's goal is to rank first in the European market this year."

Honor, which aims to "attack Xiaomi", has never touched Xiaomi's overseas market before. As it approaches independence, it will obviously not let Xiaomi conquer overseas markets. Next, markets such as India and Europe may become strategic locations for Honor.

Because of the current situation, observers have forcibly given Honor a heavy tragic color. In fact, from the perspective of the industry and the market, Honor's independence is the best choice both for Honor itself and for Huawei.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.