Honor is a top five smartphone maker in its native China. Now the company is back in India with the Honor 90, the first new device for the world’s second largest smartphone market in over three years.
The new handset is now available in global markets, including Malaysia, Europe, the Middle East and the UK When it was part of Huawei, Honor operated natively in India. In November 2020, the parent company sold the brand to Shenzhen Zhixin New Information Technology, a government-controlled company. Subsequently, Honor’s new management quietly pulled out all local operations from India and moved some of its staff to Dubai. The last Honor device launched in India in late July 2020. Soon after, Honor’s India wing went silent on social media.
But the Chinese company never entered the Indian market. However, it has partnered with PSAV Global to distribute and provide after-sales of its devices in the country. The company, which has offices in Hong Kong and India, has started selling wearables, tablets and laptops under the Honor brand in the South Asian country. But for Honor smartphones, PSAV Global chose HTech (formerly HonorTech) which counts former Realme India chief Madhav Sheth as one of its directors. It was included in early August, rebranded as HTech weeks before the formal launch – probably unwilling to remain an Honor exclusive forever.
HTech works as a local face for the sale of Honor smartphones in India under a licensing agreement with the Chinese company. It is set to later transfer technology from Honor Global to India and proposed investment of over $120 million (1,000 crores Indian rupees). The company aims to achieve $1.2 billion in revenue, secure a 5% market share by December 2024, and start local manufacturing early next year, Sheth said in interviews with local media last month.
“We will invest Rs. 1,000 crores to set up software and hardware teams in India along with our service network,” he told Indian newspaper The Economic Times.
The executive also noted that Honor will transfer its patents to HTech, which will act as an original design manufacturer (ODM), making products for third parties.
HTech has entered the highly competitive smartphone market with the Honor 90, with a starting price tag of around $340 and featuring a 6.7-inch 1.5K quad-curved AMOLED display and an octacore Snapdragon 7 Gen 1 chip.
“The diversity of hardware and design alone is difficult to work with, especially for a new entrant. Marketing, managing both channels – offline and online – and choosing the right price segment are important,” Navkendar Singh, associate vice president for devices research at IDC, told TechCrunch.
India’s smartphone market has grown to 750 million users from 150 million in the last eight years, according to data shared by Prime Minister Narendra Modi in November. However, smartphone shipments in the country have declined in the past few months due to the global economic slowdown and local issues, such as high unemployment rates, declining demand for entry-level models and increasing interest in refurbished phones among customers.
The Indian smartphone market saw a 10% year-on-year drop in shipments to 64 million units in the first half of this year, according to IDC. The mid-range segment (between $200–$400), which includes the Honor 90, remained flat.
Given how things are trending, Honor’s re-entry into the market may prove difficult.
Globally, market analysts have cut their estimates due to subpar sales of smartphones from most leading players. “Year-to-date, the recovery of the smartphone market has been slow in coming with many investors still doubting the prospects of recovery in 2H23,” UBS Global analysts wrote in a recent report. .
Honor saw a 21% drop in its smartphone shipments in China – the biggest drop among the top five players – to 10.3 million in Q2 2023 from 13 million in the same quarter of 2022, according to Canalys. However, the company saw some growth momentum earlier this year. Shipments handled by Honor grew nearly 4x in Q1 2023 from the same quarter last year, per Counterpoint.
“It’s not completely impossible to find some volume and mindshare,” Singh said when asked about Honor’s move to India.
When it was still a subsidiary of Huawei, Honor faced tough competition from homegrown players in India. It has never gained much ground, especially in relation to brands like Xiaomi, Oppo and Samsung. It will be interesting to see how the company, with its new strategy, will gain from the market.