Copying iPhone features helped Chinese brand Honor double sales


A new market intelligence report says that Chinese smartphone brand Honor managed to double its year-on-year sales in Q2, and that copying iPhone features was one of the reasons for this success.

Honor was the only brand to increase its market share during the quarter, though Apple fared better than all remaining brands …

Counterpoint Research started with the bad news: the downward trend in smartphone sales seen in Q1 worsened in Q2.

China’s smartphone sales decreased 14.2% YoY in Q2 2022, according to Counterpoint’s Market Pulse report. The quarter’s volumes were 12.6% lower than the level seen during the severe pandemic-hit Q1 2020, and less than half of the historical peak of Q4 2016. The last time the sales were lower than this point was nearly a decade ago in Q4 2012, when the iPhone 5 was introduced.

This comes as no surprise given the tough economic conditions in China as the country maintains its policy of ordering city-wide lockdowns in response to tiny numbers of positive COVID tests.

China’s economy merely grew 0.4% YoY in Q2 2022, lower than the market expectation of 0.8%-1%. During this period, major cities across China, including financial and manufacturing hub Pan-Shanghai, went through full or partial lockdowns. The hardest hit was the services sector, which fell into contraction territory, from 4% YoY growth in the first quarter to 0.4% in the second quarter.

The deepest decline occurred in April’s consumption data, with total retail sales of consumer goods falling 11.1% YoY. Weak consumer sentiment combined with the high smartphone penetration rate in China resulted in poor Q2 performance of smartphone sales.

Honor more than doubled its sales year-on-year, with growth of 103%, and Counterpoint said two factors were at play. First, the company has plenty of retail outlets in tier 2 cities, which were less badly hit by lockdowns that the largest ones.

Second, by copying iPhone features. These include face recognition and 120Hz screens.

Despite the discouraging performance in Q2 2022, major Chinese OEMs continued efforts to strengthen their positions in the high-end segment. HONOR and Xiaomi have been benchmarking their high-end models against Apple by incorporating several iPhone features […]

Major Chinese OEMs have not many options when it comes to penetrating the Apple-dominated premium segment.

Honor describes the 120Hz ProMotion-style display as an innovation.

As the adopter and innovator in the industry, HONOR firstly combines LTPO 1~120Hz adaptive refresh rate3 and 1920Hz PWM dimming technology in a smartphone display, which has been applied in HONOR Magic4 Pro. This exclusive display can deliver a truly immersive experience with less power consumption and eye strain4.

Over Q2 as a whole, Apple saw its sales fall by 5.8%. However, with everyone else bar Honor seeing drops ranging from 23% to 44%, Apple still managed to slightly increase its market share, from 14.1% to 15.5%. This was largely attributed to the 6.18 shopping festival, Apple outperforming other brands and seeing a large chunk of its Q2 sales in June.

Apple was seemingly encouraged by the impact of discounted pricing on sales, as it later offered discounts on its official website for the first time ever.

Gradient: Pawel Czerwinski/Unsplash. Phone: Honor.

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