SAN FRANCISCO—As Chinese smartphone maker Huawei surveyed the global handset marketplace in 2012, the power of the internet and the difficulties and expense of selling devices through traditional retail channels that were also selling competing phones loomed large.
At the same time, another interesting pattern was observed—Chinese online powerhouse Alibaba was seeing great success selling smartphones online, particularly to millennials who had little hesitation about buying their phones from e-retailers rather than through traditional mobile carriers.
"We saw this trend and challenge, and we decided to set up the Honor brand for smartphones," George Zhao, president of Honor, told eWEEK in an exclusive interview here following the company's Aug. 16 launch of the first flagship smartphone it is bringing to the United States: the new Honor 8.
The company knew that it would have to offer something "special and unique" to U.S. buyers, he said, with more than just lower prices than those of competitors, such as Samsung and Apple, in the intensely competitive global smartphone market. "So we prepared for two years to come to the U.S.," creating the Honor 8 along the way as a flagship handset that combines quality materials, a broad range of intriguing features and competitive prices, said Zhao.
The Honor 8 was built just for this global scenario, and will soon arrive on American shores with a wide range of features the company believes will light up the excitement level and purchasing power of a large audience of millennials here, said Zhao.
The unlocked handset, which is encased in glass in the front and rear and surrounded by an alloy frame, includes a 5.2 inch Full-HD touch-screen display, the company's own octa-core Kirin 950 processor, 4GB of LPDDR 4 memory, 32GB or 64GB of on-board storage and a microSD slot for expandable storage cards up to 128GB. The Honor 8 also has dual 12-megapixel rear-facing cameras and an 8-megapixel front-facing camera, both featuring a wide range of automatic and manual photographic capabilities, as well as an assortment of creativity tools.
The Honor 8 is priced at $399.99 for the 32GB model or $449.99 for the 64GB version, and is available for preorder immediately through Sept. 3. The handsets were unveiled in a glitzy media event at the California Academy of Sciences.
To help Honor with its strategy, the company shares its supply chain and key hardware like its Kirin processor with its Huawei parent, while maintaining its own product portfolio and marketing, sales and design teams, said Zhao.
The company brought its first device, the mid-range Honor 5X smartphone, to the United States in January for $199.99, according to an earlier eWEEK story. Now Honor is ready to dive deeper into the market here with its latest flagship handset.
"Things in the industry have really changed in the last few years" as unlocked phones have been catching on in other nations, starting in Asia and then in Europe, said Zhao. And with millennials, Honor believes that the unlocked phone market in the United States will soon catch on in a bigger way.
"We give them the free choice" of an unlocked phone, he said. "Millennials want something for themselves to recognize their uniqueness."
Honor is making its move into the U.S. market with its flagship handset during a challenging time for the handset industry, particularly as the U.S. market has been slowing as the vast majority of people interested in using mobile phones have bought one, leaving little margin for new sales growth. Market leader Apple is focusing on recovering from two straight quarters of revenue declines after a 13-year growth surge.
That contrasts with gains by Chinese smartphone makers, such as Huawei, ZTE and Xiaomi, which don't come close to leading sales in the United States but are gaining around the world.
Asked if Honor's plans for generating new sales in the United States could hurt sales of smartphones by its parent, Huawei, Zhao said: "The market is big enough globally. The Honor and Huawei philosophy is that we believe that competition can help us become stronger."
In addition, because Honor is aiming for internet sales while Huawei seeks to sell devices through traditional carriers, their strategies will not harm the other, he said.
One long-range plan that Honor plans to continue is its deep consumer research into what millennials are looking for in their next handsets, he said. "We want to keep studying the market to engage with young people to define Honor's portfolio and products."
The release of the Honor 5X earlier this year was a watershed moment for the company, said Zhao. "The Honor 5X [release] gave me a lot of confidence that the product itself can say something" to consumers. "We'll be bringing more resources and people to come to the U.S. to speed that up."