<Editor's Pick> Ren Zhengfei: After "divorce", Honor will compete with Huawei

Dec 02, 2020 Other HUAWEI

Honor officially "spun off" from Huawei nine days later, Ren Zhengfei finally came out to comment on the separation of the two.

On November 26, Ren Zhengfei gave a speech at the farewell ceremony. Ren Zhengfei set the tone for the ultimate purpose of the three rounds of U.S. sanctions against Huawei from last year, Huawei's current channels, partner status, and even why Huawei divested Honor and how Honor will develop in the future.

In the article, Ren Zhengfei said that some U.S. politicians are not trying to correct Huawei, but to "kill us". Huawei, on the other hand, should safeguard the interests of its customers and suppliers and abide by the "spirit of contract" even in the face of tough times. At the same time, Ren Zhengfei warned that the new Honor, which has been separated from Huawei, should compete for head-on with Huawei.

 

Huawei doesn't need to be pitied for its “divorce”

Since May 2019, the U.S. has sanctioned Huawei three times, from licensing its operating system and chip ARM architecture to high-end chip foundry, to blocking the purchase of third-party chips. Among Huawei's four business segments: consumer, carrier, enterprise, cloud and computing, the consumer business, or terminal business, is mostly affected, hovering on the edge of survival or death.

Ren Zhengfei believes that Huawei has finally realized that certain U.S. politicians are not trying to correct them but to kill them, in the face of waves of harsh U.S. sanctions.

Many industry insiders also expressed the same opinion to GeekPark: "The U.S. is not just restricting Huawei's development, but strangling it Under the current situation, Huawei has to survive even if it can't.”

Huawei is in a quagmire, and the impact on channel partners and suppliers is even greater. Ren said that Huawei's agents and distributors in 170 countries would lose their jobs because their channels would dry up without water, which would cause millions of people to lose their jobs. In such a situation, Huawei needs to make sacrifices to share their pain so that the dry channels can be replenished with running water while the water supply remains open.

On the one hand, Huawei's current difficulties are short-term and can be overcome; on the other hand, Huawei is not willing to drag innocent people down with it just because it is suffering. The spirit of contract is the foundation of Huawei's invincibility, as it faithfully protects customer interests and sincerely respects commitments to suppliers.

The situation was so dire that Huawei had to divest itself of Honor. At the same time, Ren Zhengfei also made his expectations for the future relationship between Huawei and Honor at their "divorce" ceremony.

Ren Zhengfei said that after the divestiture of Honor, it should be managed in strict accordance with compliance management and strict compliance with international rules.

Huawei and Honor from now on become competitors, Honor can overtake Huawei, as Huawei's strongest global competitor.

Although Huawei is trapped in a "swamp" and has broken its arm to survive, Ren believes that Huawei should still fully embrace global industrial resources.

This includes building relationships with suppliers as quickly as possible and insisting on learning from all the best, including those you don't like. Steadfastly embrace globalization and strengthen the cooperation with British, American, European, Japanese, Taiwanese, and Korean companies. The U.S. is a world technology powerhouse, and many of its companies are excellent. Huawei needs to work firmly and boldly with them, as well as with its domestic partners to grow with them.

At the World 5G Summit held the day before, Qu Jing, vice president of Huawei's Public and Government Affairs Department and head of China's Media Affairs Department, said that overcoming difficulties has become a habit of Huawei staff. The victim mentality and self-pity are useless, Huawei will insist on self-improvement and openness.

Including the launch of Huawei's Mate 40 series a month ago, it is clear that Huawei is no longer playing the self-pity card. An industry insider once told GeekPark that Huawei doesn't want to consume too much of people's emotions. This time, Ren Zhengfei also made a statement on Huawei's current situation, "Huawei does not need to be pitiful".

Even so, Huawei and Honor's "divorce" will bring an unprecedented shock to the industry.

 

A new chapter in the cell phone market competition

On November 17, several companies jointly announced that Shenzhen Zhixin Information Technology Company has signed an acquisition agreement with Huawei Investment Holdings Ltd. They completed the full acquisition of business assets related to Honor. After the sale, Huawei no longer holds any shares in the new Honor.

Through the joint self-help of more than 30 Honor agents and dealers, this brand is completely separated from Huawei. And after the third round of U.S. sanctions, the domestic and international cell phone market has also undergone tremendous changes.

Two days ago, Xiaomi released its third-quarter results, with its cell phone business returning to the top of the growth ladder as Huawei's devices lost global market share and its cell phone business became the growth engine for the third quarter. The market shares in Europe increased by 91% year-on-year, with Western Europe and Central and Eastern Europe ranking the top three, Spain, Poland, and Ukraine ranking first and Russia ranking second.

At the same time, OPPO and Vivo also began to rush into overseas markets, and launched a fierce attack on the European market, and achieved significant growth.

While Huawei and Honor are busy separatings, standing still, and retreating, competitors are already eyeing the market vacuum left by Huawei and Honor. Although Honor is separated from Huawei to get a glimpse of life, it still takes some time to integrate people, channels, and suppliers. Glory is not only to restore past vitality but also need to race against time, so as not to fall too far behind in the red sea of cell phones.

There is no doubt that with Huawei and Honor's complete separation, the future of China's cell phone market is bound to usher in a new blood storm.

This is an article from WeChat official accounts GeekPark(ID: geekpark), written by Qian qian, translated by Linda Yang.