Normal chip supply expected in June

Honor Device Co Ltd, the Chinese phone maker that became independent from Huawei late last year, said normal semiconductor supplies from next month will help the company regain its standing in the domestic smartphone market.

Zhao Ming, CEO of Honor, said though April was a dark month for the company, its performance gradually recovered in May. The company expects semiconductor supplies to be fully normal from next month, he said.

According to Zhao, United States chip giant Qualcomm Inc was among the first group of companies that inked supply agreements with Honor, after it became independent from Huawei in November. Research and development teams from the two companies have been working continuously to promote further cooperation to ensure that Honor 50 series smartphones, scheduled to be launched next month, are powered by Qualcomm's Snapdragon 778G 5G chips.

Honor was sold by Huawei to a Chinese consortium of over 30 agents and dealers to ensure the brand's survival after Huawei faced severe constraints due to the persistent unavailability of technical components needed for its mobile phone business. Supplies dried up after the US government imposed restrictions on the Chinese company.

Asked whether Honor will adopt Huawei's self-developed operating system HarmonyOS in the future, Zhao said currently Android is still its preferred choice, but he did not rule out the possibility for the future.

"As an independent company, Honor can choose different operating systems at the appropriate time in accordance with its development," Zhao added.

According to Zhao, Honor's market share in the Chinese smartphone sector has recovered to 8 percent from the lowest point of 3 percent. Though it is still lower than its peak of nearly 17 percent, Honor is making steady progress in product development and in rebuilding supply chains and retail channels, the senior executive said.

"We will unveil new products under the high-end flagship smartphone series Magic later this year, which will reach or even surpass the level of Huawei's premium Mate and P series smartphones," Zhao said, adding that, "The phones will be powered by the most cutting-edge chips."

The company will also further expand its retail footprint in the country by setting up offline stores in more cities, he said.

"The growing presence of Honor in offline markets shows that retailers are optimistic about the company's prospects and are willing to become partners in the new company," said Fu Liang, an independent telecom expert who has been following the industry for more than a decade.

Honor has also been accelerating its offline presence and building a better retail network after gaining its independence, but challenges also exist as to how it can appeal to both premium customers and the mass market, Fu said.

Shipments of smartphones in China fell 33.9 percent on a yearly basis to 26.97 million units in April, according to the latest report from the China Academy of Information and Communications, a Beijing-based think tank.