It has been a tough year for the smartphone industry globally. This has been especially true in China, where strict COVID lockdown measures have repeatedly hit the economy. According to a recent report by Counterpoint Research, smartphone sales declined by 14.2% year-on-year in the second quarter of 2022. The last time sales were so low, the iPhone 5 just debuted. But by stealing features from the latest iPhone, a Chinese smartphone brand has seen significant growth while all its rivals struggle.
Stealing iPhone Features Is a Solid Business Model
Counterpoint’s Market Pulse report showed that almost every notable brand in China lost market share from the second quarter of 2021 to the second quarter of this year. Vivo, Oppo, Xiaomi, Huawei and Realme all fell. Chinese smartphone brand Honor was the only major brand to see year-on-year growth in the last quarter.
Honor started out as a sub-brand of Huawei, but was sold in 2020 to a state-owned company controlled by the Shenzhen government. Honor launched its first phone – the Honor V40 5G – without Huawei in January 2021. The company has issued a no. New phones since then, including the foldable Honor Magic V earlier this year.
A year ago the respect for top Chinese sellers didn’t seem like too much of a threat. Now this is a real force to be reckoned with. As you can see in the chart below, Honor sales have more than doubled in the last twelve months. Honor’s sales grew 103.3% year-on-year, while most of its rivals declined 30% or more in the same period.
Why is respect growing so fast?
Research analyst Mengmeng Zhang gave an explanation for Honor’s success:
Honor continues its spectacular comeback by expanding its offline presence. With the lockdown in major cities, HONOR’s coverage in lower tier cities that saw fewer lockdowns helped the brand survive the turmoil in Q2 2022. It can be noted that HONOR has managed to garner shares from all major Chinese brands including Huawei. during the quarter. Known as the “offline channel kings”, it is time for Oppo and Vivo to take Honor seriously.
Counterpoint also offered another possible explanation: Honor is stealing the feature from the iPhone. As the report points out, “HONOR and Xiaomi are benchmarking their high-end models against Apple by including several iPhone features.”
Recently Honor and Xiaomi phones have been on Apple’s heels adopting facial recognition and 120Hz display. Meanwhile, the price of their phones is much lower than the latest iPhones. Stealing, copying, being inspired – whatever you want to call it, it’s working.
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