Honor plans to ship 100 million phones per year by 2026: is it getting unprecedented government support?
Can you sell one hundred million phones all by yourself, without receiving substantial government aid?
Depending on where you live and what your friend circle is like, you may have seen the Honor logo on some phones around you. Heck, you might be an Honor owner yourself! If things go according to plan, you’ll be seeing way more Honor(s) around you in the next couple of years.
That’s Honor’s plan, as reported by an exclusive Reuters report about one of China’s aspiring phone manufacturers.
The report outlines that in the second quarter of 2024, Honor surpassed Apple to become the third-largest smartphone vendor in China, while Apple fell to sixth place, according to Canalys data. The aforementioned goal of Honor shipping some 100 million handsets annually by 2026 is a 75% increase from 2023 levels. The goal is Honor to become a top-three global vendor by 2028, according to one of the policy documents.
These ambitious targets come amidst challenging market conditions, including a somewhat sluggish demand in China (the world’s largest smartphone market) and intense competition from numerous local manufacturers, including Honor’s former parent company, Huawei.
It’s going public!
Honor is about to step out of its cozy private club and invite the public to join by offering shares for a spot of cash: yes, we’re talking about an Initial Public Offering (IPO). It’s the jolly old debutante ball of the financial world.
As it is gearing up for an Initial Public Offering (IPO), the report reads that, according to three official documents from the Shenzhen government, Honor has been receiving substantial support, including research-and-development funding, tax incentives, and assistance with overseas expansion. This backing includes a dedicated team at the local city hall committed to a “no matter left overnight” approach, aimed at resolving issues swiftly.
This robust support is expected to enhance Honor’s appeal to investors as it prepares for its stock market debut. A successful IPO could also provide Shenzhen with an opportunity to divest from its investment in the company. Back in 2020, a consortium led by Shenzhen-owned entities acquired Honor from Huawei, with the company reportedly valued at approximately 100 billion yuan ($13.8 billion) at the time.
However, Honor has stated that it has not received any extraordinary support from the Shenzhen government beyond what is typically provided to businesses since January 1, 2021.
While it’s true that government love shouldn’t pour down from the skies on only a handful of companies, I’m not as gullible to believe things are otherwise around the globe. You can call me cynical, but that’s life. However, Honor should just keep up with the good work: even if they’re getting some sort of extraordinary help from above (from city halls and local governments, that is), the end result is some amazing flagships and foldables…
Meanwhile, some other brands – not going to name names – can’t get their act together and provide fast charging speeds on their flagships in 2024. And I’m pretty sure they’re getting special treatment from the overlords as well.