The new pattern of China's smartphone market: Honor and Huawei are leading the way, driven by AI and communication technology
In the 2024 quarter, China's smartphone market extended its growth momentum last year, with shipments up 6.5% year-on-year. In the quarter, the two major local brands, Honor and Huawei, performed well, tied for 17.1% and 17.0% market share, respectively, as the main drivers of market growth. The innovative strengths of these two companies in the field of AI and communication technology have made their products leading the way and driving a new landscape in the entire smartphone market.
In the AI field, Honor has adopted a four-layer architecture strategy, including cross-device AI convergence, single-terminal AI operating system, device-side AI applications, and device-cloud collaborative AI. This strategy has enabled Honor phones to outperform its competitors in terms of AI capabilities, especially in terms of image, voice, and large models. The Honor MagicOS 8.0 system deeply integrates AI capabilities to bring users an intelligent and personalized experience. With its excellent AI performance, Honor has made breakthroughs in the high-end market, with shipments increasing by 123.3% year-on-year, becoming the main driver of brand growth.
Huawei has also made great strides in the field of AI. Both the Huawei Mate 60 series and nova 12 series phones are equipped with industry-leading AI chips and computing power, which perform well in scenarios such as imaging, gaming, and multimedia. Huawei's distributed technology also enables seamless collaboration of AI capabilities between mobile phones, tablets, PCs, and smart wearable devices, bringing users an intelligent experience across devices. With its strong AI capabilities, Huawei's market share in the high-end segment is also growing rapidly.
In terms of communication technology, Honor and Huawei are also leading the way. Honor's self-developed Hongyan satellite communication technology breaks through the limitation of antenna size and realizes mobile phone satellite communication, bringing users a new communication experience. Users can not only make calls and send text messages in areas without network coverage, but also share location information and send help signals, which greatly improves the reliability and security of communication.
Huawei is leading the way in 5G technology. Huawei's 5G base stations and chips dominate the global market, bringing users a faster and more stable network experience. Huawei also launched a 5G-enabled foldable phone, which combines 5G technology with innovative forms to bring users a new user experience.
In stark contrast to the excellent performance of Honor and Huawei, Apple is facing greater competitive pressure in the Chinese market. According to the data, in the quarter of 2024, Apple's iPhone shipments in the Chinese market fell by 6.6% year-on-year. Shi believes that this is mainly due to the innovation of the Android camp in the fields of AI and folding screens, which has formed a differentiated competition with the iOS system, which has brought a certain impact to Apple.
AI large models and folding screens have become the key to the differentiated competition between the Android camp and the iOS system. Innovations from manufacturers such as Honor and Huawei in these two areas have given their products a unique competitive advantage and attracted a large number of users. Apple's progress in the field of AI and folding screens is relatively lagging behind, making it face certain challenges in the Chinese market.
Innovative technologies such as AI models, folding screens, and satellite communications are likely to become the dominant trends in the smartphone market. Honor and Huawei's leadership in these areas will allow it to continue to maintain its market leadership. Other manufacturers are also increasing their investment in these areas in order to occupy a favorable position in the future market competition.