By copying some features of Apple’s iPhone, Chinese smartphone brand Honor has doubled its sales despite a downward trend in smartphone sales in China for the second quarter (Q2) of 2022.
In a press release on Wednesday, Counterpoint’s Market Pulse reported that smartphone sales in China decreased by 14.2% year-on-year (YoY) in Q2 2022. The recent data showed that the volume of sales during that quarter was 12.6% lower than that of Q1 2020, when the COVID-19 pandemic severely affected the market.
The last time China’s volume of smartphone sales was below this point was before the introduction of the iPhone 5 in Q4 2012.
Ivan Lam, a senior research analyst at Counterpoint, said China’s economy solely grew in Q2 2022 by 0.4% YoY, far from 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,” Lam added. “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.”
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Although smartphone sales increased during China’s recent 618 shopping festival, they were still down by 10% YoY, Lam noted.
Despite the poor performance of smartphone sales in China in Q2 2022, Honor, a brand previously owned by Huawei but later sold to Shenzhen-based Zhixin New Information Technology Co. Ltd., doubled its sales and saw a growth of 103%.
Meanwhile, other brands such as Vivo, Oppo, Xiaomi and Huawei saw a drop in sales by 26.5%, 30%, 23.3% and 37.9% YoY, respectively.
“HONOR continues its great comeback by expanding its offline presence. With the lockdowns hitting major cities, HONOR’s coverage in lower-tier cities, which saw fewer lockdowns, helped the brand steer through the turbulence in Q2 2022,” Counterpoint research analyst Mengmeng Zhang said.
Another factor that contributed to the growth of Honor’s smartphone sales in Q2 2022 was the incorporation of iPhone features in its smartphones, including facial recognition and 120 Hz refresh rates, the latter of which can be found in the iPhone 13 as a feature called ProMotion.
“Despite the discouraging performance in Q2 2022, major Chinese OEMs continued efforts to strengthen their positions in the high-end segment,” Counterpoint wrote in its report. “HONOR and Xiaomi have been benchmarking their high-end models against Apple by incorporating several iPhone features.”
Although Apple was not the first company to incorporate a high refresh rate in its phones, as that honor goes to Razer and its 2017 Razer Phone 1, the Cupertino-headquartered company made it a sought-after feature in smartphones.
As for China’s smartphone market rebound, Lam said he expects a recovery to occur in Q3 2022.
“Given the low sales volume number for Q2 2022, we expect smartphone sales to rebound in the next quarter,” Lam noted. “At the same time, with the demand continuing to be underwhelming due to weak consumer sentiment and lack of new innovations, it is going to be very hard to make the situation better in the second half when compared to last year.”
Featured Image via GSMArena Official
