The CEO of Huawei spinoff Honor told state media on Thursday that the smartphone company plans to push overseas sales over the next five years. 

Why it matters: In November 2020, Huawei sold Honor, a budget smartphone sub-brand, to a majority Shenzhen state-owned company. In the 18 months since this sale, the firm has steadily gained market share in China and reached the top spot in domestic sales in March. Outside of China, the brand faces fierce competition from Chinese peers like Xiaomi, Vivo, and Oppo, as well as industry leaders like Apple and Samsung.

  • In the latter half of 2021, Honor made it into the top-5 selling smartphone brands (in Chinese) in China, and most recently, the brand topped the sales chart in March (in Chinese), according to Chinese marketing research firm CINNO. 
  • Honor has limited overseas reach, failing to crack the top 5 brands in terms of sales (which take 70% of the market share) in 2021. 

Details: Honor’s CEO Zhao Ming told China Securities Journal (in Chinese), a state-owned media outlet, on Thursday that the company will “fully launch sales to the overseas markets and expects no bottleneck period for the next five years.”

  • Zhao added that more than half of the company’s 12,000 employees work in the company’s research and development unit. He also emphasized that Honor plans to invest more in research than in marketing.

Context: Founded in 2013, Honor was formerly owned by Chinese telecom giant Huawei as a sub-brand. 

  • Huawei sold Honor to save the brand after it was sanctioned by the US and was cut off from using US technology, like Google services and critical chips, in 2019. Honor now has none of Huawei’s sanction burden and is able to use Google services and Qualcomm chips. 
  • After the spinoff, the brand lost access to over 100,000 patents from Huawei.

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Ward Zhou

Ward Zhou is a tech reporter based in Shanghai. He covers stories about industry of digital content, hardware, and anything geek. Reach him via ward.zhou[a] or Twitter @zhounanyu.