Huawei spins off Honor, 'young' smartphone brand

Visitors try devices made by Huawei Technologies Co Ltd at the International Consumer Electronics Show in Las Vegas on Jan 8, 2013. [File photo / China Daily]

Chinese telecom equipment vendor Huawei Technologies Co Ltd said on Monday that it's transforming its Honor handset brand into an independent smartphone brand that targets China's young mobile Internet users.

The Shenzhen-based company said that the Honor brand will be marketed and operated independently from Huawei, the company's parent brand.

Sales will be mainly made through online channels, the same tactic used by Xiaomi Corp, the maker of affordable smartphones, which has surged in China's smartphone market.

"The Honor brand will focus on providing high-quality devices for mobile Internet, and its target consumer is the young generation," said Richard Yu, chief executive officer of Huawei's consumer business group, at the launch ceremony in Beijing.

By focusing on online sales channels, the Honor brand is expected to reach mobile Internet users aged between 18 and 30, Yu said.

At the launch ceremony, Huawei also unveiled two new dual-SIM devices, the Honor 3X and Honor 3C.

The Honor 3X joins the first wave of octa-core, 1.7-gigahertz MediaTek Inc 6592-powered devices, and it boasts 2 gigabytes of RAM and a 13-megapixel main camera.

The Honor 3C features a quad-core, 1.3-GHz MT6582 system-on-chip and a 8-megapixel main camera.

The price of the Honor 3X is set from 1,698 yuan ($278), which is even more affordable than Xiaomi's MI 3. The price of the Honor 3C is as low as 798 yuan, which is seen as strong competition for Xiaomi's sub-brand Hongmi (red rice), the company's low-end smartphone.

Yu said that "Xiaomi's Hongmi is a respectable competitor" in his Sina micro blog in November, but he denied that the Honor brand was a move to copy Xiaomi.

"We've so far unveiled three generations of smartphones from our Honor series since we launched the brand in 2011. It has accumulated more than 3 million users across 100 countries."

Yu added that the series it is sold at 350 euros ($481) in Europe and at more than $400 in the United States," Yu said.

Huawei has big ambitions for this new brand. Xu Xinquan, president of e-commerce at Huawei, said on Monday that the company expects shipments of the Honor brand to exceed 10 million units in 2014, with target sales of $2 billion.

"The Honor brand will not only produce smartphones. It will also product tablet computers, set-top boxes and smart televisions in the future," said Xu.

Huawei emerged as the word's third-largest smartphone vendor in the third quarter, after Samsung Electronics Co Ltd and Apple Inc, according to Boston-based research firm Strategy Analytics.

Analysts at Strategy Analytics called Huawei "a star performer" in the smartphone market in the quarter, with the Chinese company's global shipments growing 67 percent year-on-year from 7.6 million in the third quarter of 2012.

Despite its strong performance in China, Huawei is still facing fierce competition, said Wang Jun, senior analyst with Beijing-based research firm Analysys International.

"Samsung and Lenovo have been dominating smartphone sales in China for quite a long time. Huawei, ZTE and CoolPad are basically the second-best choices in China, and the competition among the three producers is also fierce," said Wang, adding that Huawei has been producing low-end contract smartphones for a long time.

Wang said it was a good move for the company to launch an independent brand to tap the mid- to high-end market.

James Yan, a senior analyst at IDC China, said it wouldn't be difficult for the Honor brand to achieve shipments of 5 million units in 2014."If the Honor brand can introduce more models in the near future and launch them in different markets in the world, the global shipment of 10 million units is achievable," he said.

Yan said that the main challenges for the Honor brand lie in the supply chain and marketing. "Compared with Xiaomi, Huawei doesn't have much experience in online marketing," he said.