Huawei spins off Honor, ‘young’ smart­phone brand

China Daily (Hong Kong) - - BUSINESS COMPANIES - By MENG JING and SHEN JINGTING

Chi­nese tele­com equip­ment ven­dor Huawei Tech­nolo­gies Co Ltd said on Mon­day that it’s trans­form­ing its Honor hand­set brand into an in­de­pen­dent smart­phone brand that tar­gets China’s young mo­bile In­ter­net users.

The Shen­zhen­based com­pany said that the Honor brand will be mar­keted and op­er­ated in­de­pen­dently from Huawei, the com­pany’s par­ent brand.

Sales will be mainly made through online chan­nels, the same tac­tic used by Xiaomi Corp, the maker of af­ford­able smart­phones, which has surged in China’s smart­phone mar­ket.

“The Honor brand will fo­cus on pro­vid­ing high-qual­ity de­vices for mo­bile In­ter­net, and its tar­get con­sumer is the young gen­er­a­tion,” said Richard Yu, chief ex­ec­u­tive of­fi­cer of Huawei’s con­sumer busi­ness group, at the launch cer­e­mony in Bei­jing.

By fo­cus­ing on online sales chan­nels, the Honor brand is ex­pected to reach mo­bile In­ter­net users aged be­tween 18 and 30, Yu said.

At the launch cer­e­mony, Huawei also un­veiled two new dual-SIM de­vices, the Honor 3X and Honor 3C.

The Honor 3X joins the first wave of octa- core, 1.7-gi­ga­hertz Me­di­aTek Inc 6592- pow­ered de­vices, and it boasts 2 gi­ga­bytes of RAM and a 13- megapixel main cam­era.

The Honor 3C fea­tures a quad-core, 1.3-GHz MT6582 sys­tem- on- chip and a 8-megapixel main cam­era.

The price of the Honor 3X is set from 1,698 yuan ($278), which is even more af­ford­able than Xiaomi’s MI 3. The price of the Honor 3C is as low as 798 yuan, which is seen as strong com­pe­ti­tion for Xiaomi’s sub-brand Hongmi (red rice), the com­pany’s low-end smart­phone.

Yu said that “Xiaomi’s Hongmi is a re­spectable com­peti­tor” in his Sina mi­cro blog in Novem­ber, but he de­nied that the Honor brand was a move to copy Xiaomi.

“We’ve so far un­veiled three gen­er­a­tions of smart­phones from our Honor se­ries since we launched the brand in 2011. It has ac­cu­mu­lated more than 3 mil­lion users across 100 coun­tries.”

Yu added that the se­ries it is sold at 350 eu­ros ($481) in Europe and at more than $400 in the United States,” Yu said.

Huawei has big am­bi­tions for this new brand. Xu Xin­quan, pres­i­dent of e-com­merce at Huawei, said on Mon­day that the com­pany ex­pects ship­ments of the Honor brand to ex­ceed 10 mil­lion units in 2014, with tar­get sales of $2 bil­lion.

“The Honor brand will not only pro­duce smart­phones. It will also prod­uct tablet com­put­ers, set- top boxes and smart tele­vi­sions in the fu­ture,” said Xu.

Huawei emerged as the word’s third- largest smart­phone ven­dor in the third quar­ter, af­ter Sam­sung Elec­tron­ics Co Ltd and Ap­ple Inc, ac­cord­ing to Bos­ton- based re­search firm Strat­egy An­a­lyt­ics.

An­a­lysts at Strat­egy An­a­lyt­ics called Huawei “a star per­former” in the smart­phone mar­ket in the quar­ter, with the Chi­nese com­pany’s global ship­ments grow­ing 67 per­cent year-on-year from 7.6 mil­lion in the third quar­ter of 2012.

De­spite its strong per­for­mance in China, Huawei is still fac­ing fierce com­pe­ti­tion, said Wang Jun, se­nior an­a­lyst with Bei­jing-based re­search firm Analysys In­ter­na­tional.

“Sam­sung and Len­ovo have been dom­i­nat­ing smart­phone sales in China for quite a long time. Huawei, ZTE and Cool­Pad are ba­si­cally the sec­ondbest choices in China, and the com­pe­ti­tion among the three producers is also fierce,” said Wang, adding that Huawei has been pro­duc­ing low-end con­tract smart­phones for a long time.

Wang said it was a good move for the com­pany to launch an in­de­pen­dent brand to tap the mid- to high-end mar­ket.

James Yan, a se­nior an­a­lyst at IDC China, said it wouldn’t be dif­fi­cult for the Honor brand to achieve ship­ments of 5 mil­lion units in 2014.“If the Honor brand can in­tro­duce more mod­els in the near fu­ture and launch them in dif­fer­ent mar­kets in the world, the global ship­ment of 10 mil­lion units is achiev­able,” he said.

Yan said that the main chal­lenges for the Honor brand lie in the sup­ply chain and mar­ket­ing. “Com­pared with Xiaomi, Huawei doesn’t have much ex­pe­ri­ence in online mar­ket­ing,” he said. Con­tact the writ­ers at mengjing@chi­nadaily.com.cn and shen­jingt­ing@chi­nadaily. com.cn

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