Source: IDCSource: Yu Jian Column
The smartphone market in 2022 will still be cold. According to data disclosed by IDC, in 2022, China’s smartphone shipments will be 286 million units, a year-on-year decrease of 13.2%, the largest decline in history.
However, against the background of the industry’s misery, Honor has stepped out of the “smile curve”. In 2022, Honor’s mobile phone market share will be 18.1%, ranking second, and its shipments will increase by 34.4% year-on-year. It is the only brand among the top five smartphone manufacturers to achieve double-digit growth.
Considering that at the beginning of 2021, due to the impact of independent incidents, the market share of Honor mobile phones once fell to single digits. The dazzling “transcript” in 2022 really demonstrates the strength of Honor’s brand. However, since Huawei no longer has blood transfusions, behind the impressive shipments, Honor is actually facing the problem of how to continue to grow. Glorious “Anxiety”
Since there is no longer Huawei’s “backing” behind it, the phased goal of Honor may be to follow the example of Xiaomi and land in the capital market.
On April 25, 2022, in response to the rumors that Honor is seeking to go public, Zhao Ming, CEO of Honor, said that after independence, Honor’s revenue and profits will continue to grow healthily. resources to help the company develop”, to some extent it is a tacit consent to Honor’s listing plan.
The most direct impetus for Glory to seek access to the capital market is of course the hope to use the power of capital to advance to a higher level, but on the other hand, it may also reveal its inner anxiety.
Although there is no contact with Huawei, combined with the data from Qichacha, the actual controller of Honor is the Shenzhen State-owned Assets Supervision and Administration Commission, which also means that Honor may encounter policy restrictions similar to Huawei.
In August and October 2021, U.S. Republican lawmakers called on the Biden administration twice to include Glory in the entity list. In this regard, Reuters quoted U.S. Senator Rubio as saying that Honor is basically a “department” that can obtain unlimited access to U.S. technology authorizations that Huawei cannot obtain.
Source: Nikkei Asia
At this time, Honor is gradually getting rid of Huawei’s haze and relying on the technology of an open supply chain to break through. In April 2022, Nikkei Asia announced that the cost of Honor mobile phone American chips accounted for 39%, an increase of 29% compared to the beginning of 2020; domestic components accounted for only 10%, a decrease of 27%.
If Glory can land in the capital market, then it will be able to realize the “retirement of the state and the advancement of the people” at the capital level. While the state-owned assets leave the market, private capital will be introduced. Similar to Xiaomi, it will purchase open supply chain technologies without any scruples. Therefore, landing in the capital market, for Glory, not only has the meaning of expansion, but also can effectively reduce business risks. “False” Prosperity
Although Honor’s many backdoor “targets” that have been speculative have attracted investors’ attention since 2022, it still needs to “show its muscles” to the capital market in order to attract more investors’ attention.
Combined with the current data, Honor has told a “story” of scale. Since its independence in early 2021, the shipments of Honor mobile phones have skyrocketed. Data from Counterpoint Research shows. In Q4 of 2021 and the first half of 2022, the shipments of Honor mobile phones will increase by 100% and 118.3% year-on-year respectively, ranking second in market share.
Source: QuestMobile
However, it is worth noting that the impressive market share of Honor mobile phones has not been simultaneously highlighted in the consumer market. According to data disclosed by QuestMobile, in June 2022, among the proportion of active devices of smart terminal brands, Honor only accounted for 2.7%, ranking seventh, and in the same echelon as Samsung and Meizu.
The shipment data remains high, but the activity of the terminal is very cold, which shows that the “goods” of Honor mobile phones have not yet reached the hands of consumers. In May 2022, the “21st Century Business Review” quoted dealer Li Xiao as saying, “Mobile phones are not easy to sell. To whom did Honor’s mobile phone sales increase in the first quarter? bags, mobile phone stores, distributors and wholesalers.”
In short, all Honor’s dealers have joined the company’s shareholding plan, which is highly tied to the company’s interests. In the context of the industry downturn, in order to maintain the influence of the Honor brand, Honor shipped its mobile phone products to dealers and maintained a relatively high level of shipments. However, these terminals have not been effectively converted into sales and can only be regarded as It is “false” prosperity. Glory has no “new story”
In addition to paying attention to the company’s basic market, the capital market will not ignore the company’s layout of emerging industries. Because the industry is changing rapidly, even if the basic disk of the enterprise is stable, there is no guarantee that it can meet the needs of the next era.
Although Honor has achieved good shipments in 2022, it cannot be ignored that the dividends of the smartphone industry have narrowed, which is an indisputable fact.
According to data disclosed by Canalys, from 2017 to 2020, China’s smartphone shipments fell by 4%, 14%, 7% and 11% respectively. Although in 2021, China’s smartphone shipments will increase slightly year-on-year, but in 2022, under the background of repeated epidemics and conservative consumption, China’s smartphones will suffer another heavy blow.
In this context, major smartphone manufacturers have been forced to cut orders. Tianfeng Securities analyst Ming-Chi Kuo pointed out in a research report that in 2022, Chinese smartphone manufacturers have cut orders for 270 million units; according to information disclosed by UBS, Apple has reduced the estimated production of the iPhone 14 series in the second half of 2022 from 92 million units to 92 million units. It was lowered to 76 million units and production was reduced by 16 million units.
The smartphone market is no longer prosperous. In order to find a way out and give investors confidence, major smartphone manufacturers have explored the “second curve”.
Source: Xiaomi
For example, Xiaomi has described “stories” such as IoT and smart cars. The financial report shows that in the first half of 2022, the number of IoT devices connected to the Xiaomi AIoT platform reached 527 million, a year-on-year increase of 40.7%. IoT and consumer goods revenue was 19.8 billion yuan, accounting for 13.8% of total revenue. In addition, in March 2021, Xiaomi also officially announced that it will build a car and enter the smart car market.
In fact, Honor has also seen the dilemma of the smartphone industry, so in November 2022, it released the personalized full-scenario operating system MagicOS 7.0, trying to create an operating system that is intelligent, interconnected, ecological, and better understands you.
But unfortunately, because mobile phones have not really reached consumers, Honor’s personalized full-scenario operating system does not have considerable market influence.
Source: QuestMobile
According to data disclosed by QuestMobile, in September 2022, among the top 10 channels for downloading users, there is no Honor App Store. This also reveals from the side that Honor’s system user base and user stickiness are not ideal, and it is difficult not to directly affect the influence of Honor’s IoT ecosystem.
As for the smart car track that smartphone manufacturers are optimistic about, in July 2022, Zhao Ming said to the outside world, “We will not have such considerations in the next few years, but we will unswervingly carry out the entire solution with the car brand.” fusion”. Considering that the investment in smart cars is tens of billions of dollars, Honor naturally dare not rush into the smart car industry under the background that the smartphone business has not yet stabilized.
All in all, the current smartphone industry is facing greater shipping pressure, and the evolution direction of the industry has changed from “shipping heroes” to “ecological strength”.
This is not good news for Glory, which still emphasizes pure shipments.
Although Honor also combined the development trend of the times and told the story of the whole scene ecology, but due to the large market share of mobile phones, this will in turn affect the charm of its ecology.
Therefore, if Honor wants to become a company comparable to Huawei in the future, it should focus on high-dimensional brand strengths such as more tangible consumer reach and experience upgrades in addition to shipments.
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