Honor is going to go public, but we still need to tackle the 'hard bones'

Connect Insight

·July 18, 2025 12:18

The two things that Honor cannot give up on are "relentlessly pursuing" AI and sprinting towards high-end.

In the past six months, Honor has launched an "accelerated catch-up" mode.

In June, it first released a mid-range lightweight flagship phone, the Honor 400 series, and had several executives appear at the press conference to respond to doubts; On July 4th, the latest AI lightweight flagship foldable phone Magic V5 was released; On July 15th, a few days later, Honor released the X70 series of smartphones.

Honor Magic V5 Launch Event, Source: Honor Official Website

Within less than two months, the release of three mobile phones in a row means that Honor is eager to showcase its latest research and development achievements to the public and strive to recover its slightly lagging market share in the first half of the year.

Recently, the Honor IPO plan, which has attracted attention from the outside world, has also made new progress.

On June 26th, the online service platform of the China Securities Regulatory Commission (trial operation) showed that Honor has launched listing guidance and filing, and the guidance institution is CITIC Securities. The coaching filing report shows that Honor's listing coaching work is divided into three stages, lasting from June 2025 to March 2026.

All the information released to the outside world is a signal that Honor is ready to start anew.

At the same time, in order to successfully go public and gain more valuation in the future, we cannot give up on the "hard bones" that are expected to help Honor break through but still require a lot of effort to overcome: AI phones need to continue to be developed, high-end products need to continue to be developed, and sales must also be maintained.

However, although Honor has shown a very positive sprint momentum and there are also reports of good sales of the Honor 400 series in the market, there are still challenges ahead.

In terms of high-end and AI smartphone layout, Honor's entry is not too late, but with more and more players joining, every track is crowded; The technological bottleneck of mobile phone products is becoming increasingly difficult to overcome, and Honor needs to demonstrate its differentiation advantage in order to gain an advantage in the current situation.

Honor has undergone a management adjustment, and a new proposition also requires a new team to provide an answer - how to restore sales? How to add more confidence to the capital market?

Honor is still struggling with AI smartphones

Whether a mobile phone can win users, win the market, and win the future largely depends on whether it can achieve the transformation of application technology in the shortest possible time, especially the realization of 'artificial intelligence+mobile phone'. In other words, for the mobile phone industry, artificial intelligence is an opportunity for leapfrog development. Seizing it will lead the way, and if not, it is easy to be eliminated

This is a sentence from an article published by Zhao Ming, the previous CEO of Honor, in the People's Daily in 2018. This sentence may also be the main reason why all companies are accelerating the layout of AI phones nowadays.

In the current mobile phone market, many players are telling AI stories.

According to data released by Canalys, in 2024, 16% of global smartphone shipments will be AI phones, and by 2028, this proportion is expected to surge to 54%; Between 2023 and 2028, the AI smartphone market is expected to grow at a compound annual growth rate (CAGR) of 63%.

Honor is one of the earliest players to tell AI stories.

As early as 2016, Honor had built-in the Magic Live system on its Magic models, which can identify keywords in information and provide schedule addition services.

At that time, the size of the world's artificial intelligence market had only reached the level of "about to exceed $10 billion", far from the market forecast of $294 billion by 2025.

In 2022, when the growth of the overall market scale of China's artificial intelligence slowed down, Glory launched the full scene operating system MagicOS 7.0 based on Android for the first time. The MagicRing trust ring of this system can realize the self discovery, self networking, self connection, keyboard and mouse sharing, notification and call sharing, application connection and other functions of different Glory devices under the same account.

By 2024, this system has been iterated to version 9.0.

Source Honor MagicOS 9.0 video screenshot, Source Honor official website

To this day, AI remains one of the labels that Honor actively strengthens, a development direction that has not changed even after changes in leadership and organizational turmoil.

Last year, a relatively well-known event for Honor was when Zhao Ming, the then CEO of Honor, placed an order for 2000 cups of coffee using the "YOYO" intelligent agent at the Magic 7 series press conference.

In his debut after taking office, the new leader Li Jian mainly revealed Honor's major plan for AI - Alpha Strategy. He announced a $10 billion investment in building an AI device ecosystem over the next five years and showcased a new AI assistant called "YOYO Intelligent Agent".

Honor releases Alpha strategy, source from Honor official website

From the overall development perspective, Honor's layout progress on AI phones is not lagging behind.

The development of AI smartphones has gone through three main stages. The first stage is the AI APP stage, the second stage is the AI functionalization stage, and the third stage is the AI primordial stage.

The division of these three stages is based on the implementation of AI functions, with the first stage relying on independent AI apps for implementation; The second stage is achieved through integration with existing mobile applications such as cameras and voice assistants; The third stage is the deep integration of AI technology into the native service ecosystem of mobile phones, where users only need to interact with their phones through voice, text, and other forms to access AI services.

Honor has actually entered the third stage.

For example, its latest Honor Magic V5 is equipped with MagicOS 9.0.1 system and complete MagicLM capabilities, which can realize AI applications such as "one language PPT, one language programming, one language search, one language transmission, one language taxi, one language object recognition, one language screen viewing, one language memory", etc; It has also conducted comprehensive cooperation with companies such as Alibaba, BYD, Midea, etc. in intelligent agent services, smart connected vehicles, smart homes, and other areas.

If the functions mentioned by Honor in the press conference are not just empty talk, it can be considered as entering the first tier of AI mobile phone development. After all, we have not yet found any other brand of mobile phone that can make a PPT with just one sentence, and only top brands such as Huawei, Xiaomi, and Vivo have developed AI operating systems in the industry.

However, although Magic V5 has office properties, consumers are not yet fully accustomed to using mobile phones for work. If they want to use AI for PPT or programming, more users may still turn to AI big model platforms such as DeepSeek and Doubao.

Therefore, these high-end features still need some time for users and the market to adapt in mobile phone usage scenarios.

The development of the times has increasingly confirmed Honor's original statement. With the view that "smartphones are one of the best terminals for the landing of artificial intelligence technology" being recognized by more and more enterprises, Honor, which needs a rebound in sales and cannot afford to lose its high-end process, will definitely choose to give up on AI phones.

Striving for high-end and folding, Honor must move upwards

Apart from AI smartphones, another unfinished dream of Honor is to become high-end.

As a brand founded at the time to compete with Xiaomi, Honor gained popularity through mid-range products, but has since been labeled as mid-range.

Although after independence, Honor quickly improved its supply chain, opened up sales channels, and once ranked first in annual mobile phone shipments in China, it relied on "cost-effectiveness" to boost sales. Honor still wants to add imagination with a high-end phone that has gone viral.

In the past year, Honor has continuously launched multiple high-end models, such as Magic7 RSR Porsche Design, Honor Magic7 Pro, Honor Magic 6 Ultimate Edition, and so on.

The foldable screen products launched by it are actually part of the high-end layout, especially the Magic V series products, which are priced mostly over 6000 yuan.

This year, after experiencing a change of leadership controversy, Honor released its mid-range model Honor 400 and immediately launched an "AI lightweight flagship foldable" phone - Honor Magic V5, with a starting price of 8999 yuan, surpassing Huawei's previously launched PuraX.

Glory Magic V5, official WeChat official account of Tuyuan Glory

This action is partly an attempt by Honor to keep up with last year's release rhythm, as the previous model of Honor Magic V series, Magic V3, was released in mid July last year; On the other hand, it is also showcasing the company's progress in folding flagship products and high-end products to the outside world, further promoting the imagination of going public.

However, despite Honor's annual efforts to launch machines, the process of high-end development still has a long way to go.

According to data released by Canalys, in the third quarter of 2024, Honor ranked fifth globally among manufacturers in the $600 and above price range with its flagship model Magic7 Pro, holding a market share of 2%. Together with Huawei, Honor became the only two Chinese companies in the top five.

In the domestic market, Honor has squeezed into the top three in the high-end market share, but the top two players, Apple and Huawei, have market shares of 52% and 33% respectively. Other players still have a long way to go to catch up.

Image source Canalys official WeChat official account

According to data released by IDC, in the first quarter of 2025, Huawei's market share in the foldable screen smartphone market was 76.6%, while Honor's was only 9.1%.

The second place in the market share of foldable screens is already a good result, but foldable screen phones are niche models, so for Honor, this is definitely not enough.

According to data released by IDC, the total shipment of foldable screen smartphones in China in the first quarter of 2025 was 2.84 million units, a year-on-year increase of 53.1%. However, the domestic smartphone shipment volume for this quarter was 71.6 million units, with foldable screens accounting for only 0.397%.

The era of cost-effective smartphones is long gone, and the smartphone market has completed a transition from price wars to value wars.

According to the "Smartphone Model Sales Tracking Report" released by Counterpoint, the sales share of China's high-end smartphone market (priced at $600 or RMB 4350 or above) has climbed to 28% of the overall market in 2024, achieving significant growth compared to 11% in 2018.

Therefore, in order to support long-term valuation, Honor must continue to move upwards.

While telling stories, we need to stabilize the fundamentals. The new team of Honor is facing a test

To this day, what Honor urgently needs to solve is actually the current problem.

Because whether we are going deep into technology, making good AI phones, or going high in positioning, making high-end and flagship foldable screen products, we must build on the overall stability of the company.

But Honor experienced a sudden change in leadership and management at the beginning of 2025, and the new leader must carry out a series of internal organizational adjustments, stabilize the team, and start anew.

Source Glory official website

In 2024, Honor's mobile phone shipments ranked fifth.

According to data released by research firm Counterpoint Research, Honor's shipment volume in the Chinese smartphone market in the first quarter of 2025 was approximately 9 million units, with a market share of 13.7%, ranking sixth, and a year-on-year sales decline of 12.8%.

After undergoing adjustments in the fourth quarter of 2024 and the first quarter of 2025, Honor is attempting to return to its original position. Honor executives have stated in interviews that Honor's goal is to return to the top three domestically by the end of the year.

In the second quarter of 2025, news of the successful sales of Honor 400 was reported in the market. Previously, multiple media outlets reported that the global cumulative activation volume of the Honor 400 series has exceeded one million units, breaking the record for daily sales of Honor phones in the past three years and the fastest activation volume to break the one million record. The Honor 300 series and 200 series increased by 195% and 138% respectively year-on-year.

This model may start a good start for Honor's bottoming out rebound, but whether it can truly turn Honor upside down still needs further observation.

Nowadays, the pattern of the mobile phone market is constantly changing. It seems that the gap between the market shares of various brands is often less than 1%, but in order to compete for that 1% share, many things need to be done correctly.

According to the two quarterly data released by Counterpoint, in the fourth quarter of 2024, the market share ranking of domestic smartphone manufacturers is Huawei, Xiaomi, Apple vivo、 Honor OPPO， The market shares are 18.1%, 17.2%, 17.1%, 16.3%, 13.6%, and 12.5%, respectively.

In the first quarter of 2025, this ranking became Huawei vivo、 Xiaomi OPPO、 Apple and Honor have market shares of 19.4%, 17.0%, 16.6%, 14.6%, 14.1%, and 13.7%, respectively. If we only look at the market share data, only Huawei, Vivo, and OPPO have captured more market share.

Image source Counterpoint official WeChat official account

The reason why these three brands are able to achieve market share growth is because they have launched competitive products. For example, Huawei relies on the nova 13 series and flagship Pura 70 series, OPPO has a strong A-series performance, and Reno 13 series has helped to increase its mid-range market share; Vivo has contributed significantly to its sales by relying on the best-selling mid-range models in the Y series.

Therefore, in order for Honor to catch up with its competitors, it still needs to rely on its products to speak for themselves.

Li Jian revealed in a media interview that in the fourth quarter of 2024 and the first quarter of 2025, competitors released dozens of new phones, while Honor is undergoing organizational changes and has only released two new phones. Maintaining today's market share is no longer easy.

Starting from the second quarter of 2025, Honor will regain its rhythm. It has already released four models for mobile phones alone, including one in the 2500-4000 price range, one in the 8000+price range, and two in the 1000-2000 price range. The latest Honor X70 is a high cost-effective machine with strong battery life and protection, and is also a major sales product.

Honor frequently releases new products, not only to stabilize and recover lost sales, but also to gradually regain the overall development rhythm.

For Honor, it is clearly not enough to return to the peak or reach the desired position. Honor must continue to produce persuasive products in order to truly achieve a comeback.

This article is from the WeChat official account "Connect insight" (ID: lxinsight), written by Dou Wenxue, edited by Midnight, 36 krypton is authorized to release.

The viewpoint of this article only represents the author himself, and the 36Kr platform only provides information storage space services.

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