Honor is now the third largest smartphone manufacturer in China with 15% of the market

Honor is now the third largest smartphone manufacturer in China with 15% of the market
Huawei's sub-brand Honor was suffering from guilt by association. Because it was part of Huawei's operations, it was forced to follow the same restrictions that the U.S. placed on  Huawei including the inability to use the Google Mobile Services version of Android. Honor was also blocked from obtaining cutting-edge chips manufactured by foundries using American technology.

To help rid Honor of these restrictions, last year Huawei sold the sub-brand to a consortium for a price reported to exceed $15 billion. No longer under the thumb of its beleaguered parent, Honor was able to include Google Mobile Services and the 5G enabled Snapdragon 778G chipset with the Honor 50 series. Huawei, on the other hand, is forced to use 4G versions of Qualcomm's Snapdragon 888 SoC for the P50 series.

Honor was the third-largest smartphone producer in China with a market share inside the country of 15%

Thanks to the time difference, it is Wednesday morning in China where CNBC reports that Counterpoint Research has released its latest data about the Chinese smartphone market. The new report has Honor in third place with a 15% slice of China's smartphone pie. Honor's handset shipments rose 18% on a month-to-month basis in August making it one of the countries top manufacturers in the industry last month.

Oppo and Vivo were the top two smartphone brands delivered in China in August. Tarun Pathak, research director at Counterpoint Research, said in a release, "After being spun off from Huawei, Honor was able to restore ties with component players. Since then, leveraging its strong R&D [research and development] capabilities, Honor has launched new products and has been on a rapid recovery path in China."

Pathak adds that "Honor is also targeting the premium segment with the Magic series, thus expanding its portfolio across price bands." Before the U.S. restrictions on Huawei started to bite, Huawei dominated the Chinese smartphone market. During the third quarter of 2019, Huawei was responsible for over 42% of the smartphone market in the country. Vivo was second with a meager (by comparison) 17.9% share. Huawei showed a remarkable 66% year-over-year gain in shipments during that quarter.

Honor's global market share during August was 3.7%, up from 1.5% in February. Neil Shah, Counterpoint's Research Director, said that most of Honor's growth last month came from gains made in China. In the global smartphone marketplace, Honor will face competition from Apple, Samsung, and Xiaomi. The latter has taken some of the market share lost by Huawei.

Discussing the smartphone market outside China, Varun Mishra, senior analyst at Counterpoint Research, wrote, "Growth outside China is likely to be gradual, as loyalty in the mid-segment remains low and Honor will also have to rebuild its distribution network. Then, there are also intensifying component shortages which can likely hinder Honor's expansion in 2021."

Huawei is expected to drop from the third-largest smartphone manufacturer worldwide to number seven this year

Counterpoint's Pathak stated, "There was also a pent-up demand from the loyal Huawei and Honor consumers who held on to their devices and did not switch to other brands. Its strong relationships with distributors also helped Honor relaunch products on a large scale. Honor's resurrection will further intensify competition in the Chinese market in H2 2021."

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Back in 2016, Huawei's consumer products chief Richard Yu said that the company would top Apple and Samsung to be the largest smartphone manufacturer in the world in five years. This would have worked out perfectly if not for the U.S. deciding to punish Huawei for being a "national security threat." In April and June 2020, Huawei was the largest phone manufacturer on this planet.

Huawei could not keep that position throughout 2020 but did finish in third behind Samsung's 18.8% market share and Apple's 14.4%. Huawei owned 13.5% of the global smartphone market last year For 2021, Huawei is expected to finish as the seventh-largest smartphone manufacturer in the world with Honor right behind it.

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