Richard Yu, CEO of Huawei’s Consumer division, has announced the new dual brand strategy for Huawei and Honor devices.
You’ve got to hand it to Huawei. They’ve been banned from the US market, caught on multiple occasions trying to dupe consumers, accused of spying and even had their CFO arrested but none of this seems to have any real impact on them; they’ve maintained a very strong position in the smartphone market. Having usurped Apple for the number 2 spot for biggest smartphone manufacturer in the world, the company now has its eyes on the elusive number 1 spot held by Samsung since 2012 and odds are, they’re going to get it.
The company have actually maintained their position above Apple for two quarters now, so it is not far-fetched to believe that Huawei can indeed take Samsung’s OEM crown. However, even with Huawei’s revenue topping US$ 105 billion in 2018 and the fact that they’ve sold 200 million smartphones in that same year, Huawei’s growth (especially in the chinese market) has been helped tremendously by HONOR, a sub-brand of the company. The sub-brand achieved an impressive YoY international growth that exceeded 170 percent last year. Even business analysts, IDC think as much.
“The one outstanding performance from Huawei over Samsung is the presence of its other brand Honor, which is doing increasingly well. Honor is run quite independently from the Huawei brand, and the two brands to a certain extent compete with each other. More Honor phones are sold in retail chains than by the operator shops in comparison with the Huawei brand, and Honor in general has lower price points. The two together allow Huawei to play more points on the market.”
Marta Pinto, research manager at IDC
Dual-brand strategy
That being said, Huawei can obviously see the value HONOR’s success will bring to the company and has pledged to “support Honor to develop cutting-edge products and continue a strong stream of investment into technology innovation, while maintaining a firm dual-brand strategy.” With that in mind, Huawei now plans for HONOR to become the 2nd largest smartphone manufacturer in China, and 4th in the world. The way I see it, Huawei is sharing their resources to help HONOR grow and at the same time using the brand to keep Samsung and Apple at arms length in the smartphone manufacturer race. A smart move by Huawei, really.
Mutually beneficial, but for how long?
This new dual-brand strategy clearly works for both companies. But how long will HONOR be content with being in Huawei’s shadow? The sub-brand has churned out some head turners lately, most notably their flagship View 20. HONOR made a bold move by being the first to introduce the punch-hole display and it was undoubtedly a success. Even Samsung followed suit in their S10 line so its safe to say that Honor has led an industry trend in this regard.
“HONOR is on the brink of yet another breakthrough and there is no slowing down for us. As
the going gets tough, the tough get going. We’ll treat each day as an opportunity to deliver
greater value to our fans. For HONOR, the best is yet to come,”George Zhao, President of HONOR
Both brands have publicly expressed their desire to work hand in hand, citing that they each have different target markets. However, HONOR has been quite open of late about wanting to be taken seriously as a bona fide brand. With HONOR continuing to push the boundaries for the standard of what a mid range phone is supposed to be, how much longer will the brand be content with always being second or third best?
Don’t get me wrong, HONOR is still very young, so it’s still a long way before I can foresee any discontentment. However, with the brand already giving the likes of OPPO and Xiaomi a run for it’s money, it would be really interesting to see just what they can achieve if they eventually do decide to part ways with Huawei.
