Huawei spin-off Honor to launch first foldable phone abroad as Chinese firm takes on Apple, Samsung

Huawei spin-off Honor to launch first foldable phone abroad as Chinese firm takes on Apple, Samsung
KEY POINTS
  • Honor, the smart devices company spun off from embattled Chinese tech giant Huawei, plans to launch a foldable phone in overseas markets.
  • Honor faces an uphill battle outside of China where it has less than a 1% smartphone market share and will come up against giants including Apple and Samsung.
  • The brand was sold by Huawei to a consortium of Chinese buyers in late 2020 as a way to survive U.S. sanctions.

Honor, the smart devices company spun off from embattled Chinese tech giant Huawei, plans to launch a foldable phone in overseas markets as it looks to challenge Apple and Samsung on the global stage.

On Friday, the company launched the mid-range Honor 70 smartphone in Europe and said an unannounced foldable phone will be coming to the region and other international markets too in the future. It will be the first time Honor launches a foldable device overseas, the company said.

Honor faces an uphill battle outside of China where it has less than a 1% smartphone market share.

The brand was sold by Huawei to a consortium of Chinese buyers in late 2020 as a way to survive U.S. sanctions. In 2019 and 2020, Huawei was hit by a number of American sanctions that cut its access to Google software and key chips, destroying its smartphone business.

Since then, Honor has launched a number of smartphones. This year, it brought its flagship Magic 4 handset to international markets.

Alongside the upcoming foldable phone, Honor is placing emphasis on the more expensive premium end of the smartphone market outside of China.

That will put Honor in competition with Samsung’s latest foldables — the  Galaxy Z Flip 4 and Galaxy Z Fold 4.

“As the global economy has deteriorated in 2022, the premium end has remained strong, benefitting Samsung and Apple so far this year,” James Manning Smith, senior analyst at CCS Insight, told CNBC via email.

“One of Honor’s greatest challenges in the year will be trying to leverage this trend, attempting to win sales from well-established premium brands, particularly in a year where stretched budgets will result in consumers looking to avoid potentially more risky purchases.”

Shipments of phones costing over $1,000 grew 94% year-on-year in the second quarter, according to Counterpoint Research. This segment is dominated by Apple and Samsung.

But Honor’s Chinese rivals including Xiaomi, Oppo and Realme have also managed to gain share overseas by managing to pump out mid-priced devices with high specs.

That will pose another challenge to Honor.

Honor’s “low-cost Chinese peers have made some serious in-roads in the European market over the last two years, a position that they will not give up without a fight,” Smith added. “Although Honor has been ramping up its marketing, it faces some incredibly fierce competition outside of China.”

This article was originally published on cnbc.com

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