Honor is making efforts to stabilize its relationship with partners

Jan 25, 2021 E-commerce HUAWEI


Honor, the Chinese phone maker that has gained full independence from Huawei, released many new products including the Honor View 40 series.

It is worth speculating that Zhao Ming, CEO of Honor, did not introduce the chip used in the new machine and its parameters at the launch, but only put a picture of MTK Tiangui 1000+ in the PPT, which also caused a lot of speculation.
Tiangui 1000+ is the 5G flagship chip released by MTK in May 2020, and two days before the new product launch, that is, the 20th, MTK just released the latest flagship chip - Tiangui 1200, and announced that Xiaomi, OPPO, Vivo, Realme and other brands will be released one after another corresponding new machine.
However, the new flagship machine did not use the latest chip. It has to be said, after the independence of Honor, there are many problems have not been solved.

Still lack of chips
On last Friday, Honor unveiled its first smartphone product after leaving Huawei-the Honor View 40 series. The handsets are powered by Dimensity 1000+ chipsets from chip company MediaTek. It means that Honor has indeed found a new solution instead of Kirin chip, but it does not mean that Honor achieves chip free.
On the contrary, the release of the Honor View 40 series has completely confirmed the shortcomings of Honor in terms of chips. To be precise, Honor is lack of good chips. At least from the current point of view, Honor did not use MTK's latest Tiangui 1200 and Qualcomm's Snapdragon 888.
Zhao Ming said it has signed a cooperation agreement with Qualcomm and MTK to solve the problem of chip supply after the launch, but whether Honor can solve the chip problems, is still an unknown.
After all, compared to Xiaomi, Vivo, OPPO, Realme and other manufacturers, Honor just formed a partnership with Qualcomm, MTK, the status is naturally not as good as those old partner.
Besides, the chip and the phone is not a simple hardware combination relationship, it often requires both sides in the hardware and software for a long time repeatedly grinding. On this point, Honor is far behind Xiaomi and OPPO.
The good news is that Qualcomm, MTK and Honor have reached a cooperation, which solves the chip problem. And in order to get a more competitive chip, Honor may need to make greater efforts.

The mid- and high-end market is more difficult to do
Honor clarifies its strategic route in the high-end market during this conference, positioning the "global iconic technology brand". After leaving Huawei, Honor's ambitions seem to be even greater.
Zhao Ming said the new Honor company has about 8,000 employees, with over 50 percent of them being research and development staff. "With five R&D centers and over 100 innovation labs worldwide, Honor is committed to developing powerful technology that empowers people to become a better version of themselves."
Honor is still having Huawei's gene, which can indeed be the trump card for Honor to continue to advance to the mid-to-high-end brand.
But considering the reality, it had some good results in the high-end products, but compared to Xiaomi, it is more difficult to obtain the mid- and high-end market, especially high-end products.

On the one hand, after leaving Huawei, Honor has lost a very important chip differentiation advantage, and this will become an important factor to limit Honor, such as the Honor View 40 series.
On the other hand, it has to face the most cruel reality, that is, the high-end market competition will become increasingly fierce. Brands like Realme, Redmi, IQOO are trying to enter the high-end market. 
Without the protection of Huawei, Honor's high-end road is bound to be more difficult than imagined.

Offline channels struggle 

After independence, Honor has been working to establish its own online channels, the Honor View 40 series of online sales channels have not included Huawei's channel.

For the channel strategy, Zhao Ming plans to do online and offline four-six sales ratio in 2022. Honor, which started as an Internet brand, has gradually tilted its sales ratio to offline since it accelerated the opening of stores in 2018, and has approached this ratio last year.
Related reports show that the speed of opening stores after independence is still fast, which shows the importance Honor attaches to offline channels. At the same time, it is the most simple and direct way to strengthen their own offline channels due to lacking Huawei's offline channels.
And Xiaomi also focuses on the offline channels, in order to expand the influence of the offline channel and control more offline traffic.
The two are also sinking, opening more stores to county-level areas. In addition, as just independent, Honor also does not take advantage in the opening of stores capital, especially compared with the listed company Xiaomi. Last year Zhao Ming also confessed that Honor's online resources are only a quarter or even a fifth of OVs.
It can be seen that although Honor has the intention to do a bigger and stronger offline channel, the limited budget may bring a lot of resistance, Honor may have to experience a bitter battle offline.

Back to the long march
Honor started a long march from online to offline channel, from low-end to mid- to high-end road.
And now Honor will again embark on a long march, only this time, Honor needs to face alone. But through this cooperation, it actually has a few guarantee cards in hand, such as no more supply chain pressure, and has more suppliers to choose from, as well as holding a large number of Huawei bestowed elite.
With these two points alone, Honor has the capital to continue to fight, or rather, it has the ability to continue to play with Xiaomi and OVs. But for the global mid-to-high-end strategy pursued by Honor, these are far from enough. Without the top chip and the perfect grind, without the products recognized by the market, there is still a lot of uncertainty about the future of Honor.
What is certain is that in the face of some brand new suppliers and the market's expectations of it, Honor is still not ready. But the long march has already begun, Honor must adapt to the days without Huawei as soon as possible, and try to transition from the "post-Huawei era" to the "new Honor era".

This is an article from WeChat official account LiuKuang (ID: liukuang110), written by Liu Kuang, translated by Chris Yuan.