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Written by| Wen Yehao

edit| Wu Xianzhi

Cai De (pseudonym) sat in the office, the faint light from the screen of the Honor mobile phone on the desk witnessed a difficult period.

After leaving Huawei, Honor was like a lone boat, having to face the vast ocean alone. And along the way, it was full of complexity - from shortages, weak product strength, to the attack of "black swans", "suffering" may be the best adjective to describe the Honor dealers represented by Cai De during that period.

In the cold winter of mobile phones, when many competitors closed stores and changed their business, choosing Honor is like gambling. However, Honor dealers who are firmly optimistic about it still took out their chips.

Time flies. Today, the mobile phone market as a whole has recovered, and the dawn brought by high-end and foldable screens has also entered the market.

On July 12, the Honor Magic flagship new product launch conference was held in Shenzhen. At the conference, Honor unveiled four highly anticipated flagship new products: Honor Magic V3, Honor Magic Vs3, Honor MagicPad 2 and Honor MagicBook Art 14. With Honor's efforts over the past years, a number of new products have been intensively presented, and those who chose to bet on Honor at the beginning seem to have waited for the moment to cash in their chips.

It is undeniable that Honor has struggled out of the abyss in the past few years, going upstream, rushing out of the Red Sea and finding the "promised land". How to continue to maintain this unyielding fighting power is the most critical challenge for Honor at the moment.

Those who bet on glory

In the early days of Honor's independence, the first thing it was hit was the constant rumors in the industry.

At that time, the C-end context, which had a weaker perception of the industry, still belatedly regarded Honor as a part of Huawei, but for dealers who dealt with mobile phones every day, the dust raised by the violent turmoil had blocked the sunlight, leaving only fear and worry.

In particular, small dealers in some low-tier cities often discuss in the merchant group whether Honor can be reborn like a phoenix from the ashes, or whether it will reach a dead end. At the end of the discussion, the majority of the comments are often "Honor can't get back on its feet" or "It has been losing money and can't stand it anymore."

Although rumors were rampant, Cai De always adhered to his own judgment and was not shaken by the noise from the outside world. However, this could not cover up the objective problems of Honor - after all, Honor was still immature at the time, and looking around, there were areas that needed to be supplemented.

A Hua (pseudonym), a distributor, once told Photon Planet that Honor's sales model had many problems in its early days of independence. For example, the "SO rebate" mechanism, which means that commissions can only be calculated after the goods are actually sold, has led to a serious backlog of dealers' inventory and frozen funds that cannot flow. "The goods you receive do not count. You have to wait until they are sold before you get commissions. In this way, the inventory is stuck in the warehouse, and there is no liquidity."

Although Honor realized this problem and quickly adjusted it to the "ST rebate" model, that is, calculating commissions based on the amount of goods picked up, in an attempt to reduce dealers' inventory pressure, it is still a drop in the bucket for dealers struggling to survive. After all, bigger problems still need to be solved - on the one hand, the lack of product strength, and on the other hand, the shortage of supply.

Ah Hua's store was in a large shopping mall with high rent, and Rongyao could hardly afford it. "We have already lowered the rent to a very low level, about 170 to 180 square meters, from more than 90,000 to just over 80,000, and it still felt expensive."

According to Ahua, Honor products were not competitive enough in the high-end market at the time, and sales were mainly concentrated on low-end products. For example, the Magic 3 did not meet market expectations, so when its store clerks were promoting it, they did not have much confidence and did not dare to actively tease or compare it with other competitors' products.

For Chen Qian (pseudonym), the issue of product strength was hardly considered, after all, even goods were scarce at the time.

Chen Qian's stores are not big, located in three different corners of the city, with an area of ​​only 50 square meters, 55 square meters and 70 square meters respectively. The store cost is low, and each store is only staffed with two employees. During the most difficult times, the staff would sort out the shelves with only a few mobile phones every morning.

In order to maintain business amid the extreme shortage of goods, Chen Qian had to take some special measures, such as preparing as much inventory as possible each time he purchased goods, or looking for goods from outside. "As long as the goods are marked with the Honor logo, we will sell them to ensure that the shelves in the store are not empty."

The same was true for Cai De's store, where he faced questions from customers and employees almost every day. "At that time, many people said that Honor was over and there would be no new products."

As a distributor, Cai De had to face questions from customers and employees every day. "At that time, many people said that Honor was finished and there would be no new products," Cai De recalled. Every day, he had to encourage his team and believe that Honor would make a comeback.

After all, chicken blood can't be eaten. In 2022, due to the three-year "black swan", Cai De's store losses have become the norm. The pressure of rent of tens of thousands a month has forced the company to face a serious discussion on whether to close the store.

But in the end, the company's top management overcame all objections and persevered.

At the same time, Chen Qian is also seeking ways to survive, such as maintaining operations through various means such as online live broadcasts, old-for-new activities, and combining with operators' sales channels.

"During that difficult period, we maintained close communication with Honor and met with Honor's direct management specialists every day to discuss market strategies and inventory management." This close cooperative relationship also enabled them to maintain emotional stability even when supply was tight.

At that time, the entire mobile phone industry was in decline, and betting on a product that was not yet mature and had not yet borne fruit was a gamble. But they all persisted.

Chen Qian attributed the reason to the attitude towards technology. In his opinion, future market demand will be driven by technology research and development, and Honor has a clear advantage in this regard.

And it turned out that they made the right bet.

Chips cashed in, glory takes off

Every monthly review meeting left Cai De with deep memories.

Looking back, he and his team, as well as Honor KA managers, channel managers, experience store managers and product managers, would gather together on Friday afternoons at the end of the month to study the sales data and various charts projected on the screen, as well as market feedback.

"We will start with every detail, from which colors are out of stock, which configurations sell the best, to the pickup, sales, and pre-sale volumes of each store, and analyze them one by one." In the past, every time we reviewed the situation, the atmosphere in the meeting room was a little tense. Everyone's eyes were fixed on the screen, each with their own thoughts.

Change begins with a small step.

Cai De still remembers that it was a sunny afternoon, with sunlight pouring in through the large windows of the conference room, shining on the happy faces. At that time, the Honor Magic 5 series had just been launched, and after the sales data of Magic 5 was released, there was thunderous applause in the conference room.

And this was already within his expectations.

Cai De still remembers the scene when Honor Magic5 was launched. There was a long queue outside the store and the staff inside the store were busy from morning till night. Before that, his store had never experienced such a grand occasion. "We were busy until the early morning to deliver all the pre-ordered mobile phones. After that, we were all very shocked." Chen Qian recalled.

Chen Qian also felt the lively atmosphere, with customers coming with old Huawei and Samsung phones, hoping to trade in old phones for new ones, and some even went to Huawei stores to buy Magic 5. This means that Honor not only shows a strong ability to "embrace new things", but also is comparable to Apple and Huawei in terms of high-end mentality.

Behind the sudden bolt of thunder is the long-term accumulation and sedimentation of glory.

Cai De recalled that at the review meeting, everyone discussed the reasons for the success of Magic 5. Among them, the product manager elaborated on the innovative technology of Magic 5, from the independently developed communication chip to the efficient Qinghai Lake battery. Every technical detail made him secretly excited.

Cai De knew very well that this was just the beginning.

Honor CEO Zhao Ming once revealed that when Honor just became independent, the total number of employees in the company was close to 8,000, and later the number of R&D personnel alone reached this number. Perhaps because of this, Honor has been able to continuously come up with "big moves" in the fields of eye protection, battery, folding screen, AI and other technologies.

Since then, Honor has gradually picked up the role of the protagonist who turns the tide.

In July 2023, Honor launched the Honor Magic V2 foldable screen mobile phone. This time, not only was the supply in the stores in short supply, but users who paid in full for delivery lined up in long queues. Even in the secondary market shrouded in "fear of price drop", many users were willing to pay a premium just to own a Magic V2 as soon as possible.

The Honor Magic6, which was launched at the beginning of this year, is Honor's blockbuster product at the beginning of 2024. In addition to continuing the trend of long queues in offline stores, it also exceeded the all-day omni-channel sales of the Honor Magic5 on the first day of sale in less than three minutes, and broke the sales record of the first day of sale of all new phones in Honor's history.

As the mobile phone market gradually recovers, both the Honor Magic V Flip, which fills the folding screen niche, and the Honor 200, have continued Honor's growth trend.

From being unpopular to detonating the market, this is not a story about luck, but rather stems from the causes planted by Honor more than three years ago.

Take Honor Magic V2 as an example. One of its major selling points is its 9.9mm thin body. To achieve this, it is a systematic project involving battery, screen, heat dissipation solution, etc. For this reason, Honor has already started exploring ways to subvert the inherent standards of the mobile phone industry when it entered the folding screen market.

At present, Honor has launched a new generation of folding phone, Magic V3, which not only brings together Honor's past "big moves", but also refreshes the record of thinness and lightness of folding state set by previous generation products. The market trend is self-evident; the AI ​​seeds sown before have also blossomed and borne fruit one after another, and have penetrated into its product matrix.

With the dual growth of technology and market, the Honor store clerks, who once felt a little frustrated, can now finally confidently shout the slogan of "beating our competitors."

Honor is very fond of the story of "the early bird catches the worm", and for the now mature Honor, where to fly after it has grown its wings has naturally become a new proposition.

Zhao Ming once said that we should define our brand and ourselves with great products. And “greatness” may be exactly what Honor expects of itself now.

Looking at the history of global business, Apple is undoubtedly an interpretation of the journey from excellence to greatness, from a startup in a garage to a technology giant that has set a new global market value record of US$3.5 trillion.

The reason is that supply chain management, corporate culture and other dimensions are certainly important, but what really makes Apple great is undoubtedly its past, its persistent pursuit of innovation and its vision for the future - as the famous phrase "Only Apple can do" reflects, great companies not only meet existing needs, but also create new needs and change people's lifestyles.

Considering Honor's bet on technological innovation and user experience over the past years, this is exactly the path Honor has taken in the past and will take in the future.

But as Cai De said, there is still a long way to go before glory is truly successful. "We can't get carried away, we still have to be steady and solid. If we get carried away, we'll be easily beaten."

At this stage, Honor is good enough and outstanding enough, but it is still some distance away from greatness. Honor has made remarkable progress in the past, but at present, whether it is embracing the AI ​​wave, accelerating its globalization strategy, or promoting an IPO, it needs to keep going.

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