Written by | Wen Yehao

Edited by | Wu Xianzhi

Cai De (pseudonym) sits in his office, the faint glow emanating from the Honor phone screen on his desk witnessing a period of difficult times.

After leaving Huawei, Honor was like a lonely boat facing the vast and tumultuous ocean alone. This journey was fraught with complexities—from shortages, weak product competitiveness, to the pecking of "black swan" events. "Suffering" might be the best adjective to describe the time for Honor dealers represented by Cai De.

Amidst the winter of the mobile phone industry, when many peers closed their stores and switched careers, choosing Honor seemed like a gamble. However, those who firmly believed in Honor still placed their bets.

Time flies, and now the mobile phone market is gradually recovering, with premiumization and foldable screens bringing a dawn to the market.

On July 12, Honor held the Magic flagship product launch event in Shenzhen. At the event, Honor unveiled four highly anticipated flagship products: Honor Magic V3, Honor Magic Vs3, Honor Tablet MagicPad2, and Honor MagicBook Art 14—密集呈现了荣耀多年来的努力成果, and those who initially chose to bet on Honor seem to have waited for the moment when their chips are cashed in.

Undeniably, Honor has struggled out of the abyss over the past few years, going against the current and breaking through the red ocean to find its "promised land." Maintaining this relentless fighting spirit is now Honor's most critical challenge.

Betting on Honor

At the initial stage of Honor's independence, the first thing to bear the brunt was the constant rumors circulating in the industry.

At that time, the C-end context with weaker industry perception still lagged behind in viewing Honor as part of Huawei, but for dealers who dealt with mobile phones every day, the dust raised by the violent turmoil had obscured the sunlight, leaving only fear and concern.

Especially some small dealers in lower-tier cities often discussed in merchant groups whether Honor could be reborn like a phoenix or whether it would go down a dead-end street. In the end, opinions like "Honor won't make it" and "always losing money, can't hold on anymore" often dominated the discussion.

Although the rumors were loud, Cai De consistently stuck to his judgment and was not swayed by external noise. However, this could not conceal the objective problems facing Honor—after all, Honor was still fledgling at that time, with many areas in dire need of improvement.

Channel partner Ah Hua (pseudonym) once told Photon Planet that there were many problems with Honor's sales model in the early stages of independence. Taking the "SO rebate" mechanism as an example, only after the goods were actually sold could the commission be calculated, leading to severe inventory backlog and frozen funds for dealers. "The goods you receive don't count; you only get the commission after selling them, so the inventory piles up in the warehouse, and there's no liquid capital," he said.

Although Honor quickly adjusted this to the "ST rebate" model after realizing the problem, calculating commissions based on the quantity of goods picked up, trying to alleviate the inventory pressure on dealers, it was still inadequate for dealers struggling for survival. After all, bigger problems remained unsolved—on the one hand, product competitiveness was lacking; on the other hand, supply was urgent.

Ah Hua's store was located in a large shopping mall with high rent, which was difficult for Honor to support at that time. "We've already reduced the rent to a very low level, about 170-180 square meters, from over 90,000 to just over 80,000, and it still feels expensive," he said.

According to Ah Hua, Honor products were not competitive in the high-end market at that time, with sales mainly concentrated in low-end products. Taking Magic3 as an example, the product level did not meet market expectations, so the store staff lacked confidence when promoting it and dared not actively tease or compare it with competitor products.

For Chen Qian (pseudonym), the issue of product competitiveness was hardly a concern, as even supplies were scarce at that time.

Chen Qian's stores were small, distributed in three different corners of the city, with areas of only 50, 55, and 70 square meters, respectively, and low store costs. Each store was equipped with only two employees. During the most difficult times, the staff would organize the shelves every morning with only a few phones available.

Faced with extreme shortages, Chen Qian had to take special measures to maintain operations, such as stocking up as much inventory as possible during each replenishment or sourcing from outside. "We took in anything with the Honor logo to ensure the shelves were not empty," he said.

Cai De's store was the same. He had to face questions from customers and employees almost every day. "At that time, many people were saying that Honor was finished and there would never be new supplies again," Cai De recalled. Every day, he had to encourage his team to believe that Honor would make a comeback.

After all, hype can't feed people. In 2022, due to the three-year "black swan" events, losses in Cai De's stores had become the norm, and the pressure of tens of thousands of rent per month forced the company to face serious discussions on whether to close the stores.

But in the end, the company's senior management insisted and persevered.

Meanwhile, Chen Qian was also seeking ways to survive, such as through online live streaming, trade-in activities, and combining with operators' sales channels, struggling to maintain operations.

"During that difficult period, we maintained close communication with Honor, daily connecting with their direct supervisors to discuss market strategies and inventory management." This close cooperation also helped them maintain emotional stability amidst supply shortages.

At that time, betting on Honor, which was still immature and had yet to bear fruit, was akin to a risky gamble amidst the declining mobile phone industry. But they persevered.

Chen Qian attributed this to their attitude towards technology. In his view, future market demand would be driven by technological research and development, and Honor had a clear advantage in this regard.

And the facts proved that they had bet right.

Chips Cashed In, Honor Takes Off

Every month's review meeting left profound memories for Cai De.

The review meetings were usually scheduled for Friday afternoons at the end of the month, where he and his team, along with Honor's KA supervisors, channel supervisors, experience store supervisors, and product managers, would gather to delve into the sales data and various charts projected on the screen, as well as market feedback.

"We would start with every detail, from what colors were out of stock, what configurations sold best, to each store's pickups, sales, and pre-sales, analyzing them one by one." In the past, the atmosphere in the meeting room during reviews was always tense, with everyone's gaze fixed on the screen, each harboring their own thoughts.

Change begins with subtle signs.

Cai De still remembers a sunny afternoon when sunlight streamed through the large windows of the meeting room, illuminating the faces of the delighted attendees. That was when the Honor Magic5 series had just been launched, and after the sales data for Magic5 was disclosed, the meeting room erupted in applause.

And this was exactly as he had expected.

Cai De still remembers the scene when the Honor Magic5 was launched, with long queues outside the door and store staff busy from morning till night. Before that, his store had never experienced such a spectacle. "We were so busy that we didn't finish delivering all the pre-ordered phones until almost midnight. Afterward, we were all very shocked," Chen Qian recalled.

Chen Qian also felt the enthusiastic atmosphere, with customers holding old Huawei and Samsung phones hoping to purchase new ones through trade-in programs, and even some customers running into Huawei stores to buy Magic5. This meant that Honor not only demonstrated a strong ability to attract new customers but also rivaled Apple and Huawei in terms of high-end mindshare.

Behind the sudden explosion was Honor's long-term accumulation and precipitation.

Cai De recalled that during the review meeting, they discussed the reasons for Magic5's success. The product manager elaborated on Magic5's innovative technologies, from self-developed communication chips to efficient Qinghai Lake batteries, each technological detail exciting him inwardly.

Cai De knew that this was just the beginning.

Honor CEO Zhao Ming once revealed that when Honor first became independent, the company had nearly 8,000 employees, and later, just the number of R&D personnel reached that figure. Perhaps because of this, Honor has been able to continuously unleash "big moves" in areas such as eye care, batteries, foldable screens, and AI.

Since then, Honor gradually picked up the script of the protagonist turning the tide.

In July 2023, Honor launched the Honor Magic V2 foldable phone. This time, not only were stores in short supply, but users who had paid in full to wait for delivery queued up, and even in the secondary market, which was shrouded in the fear of "breaking even," many users were willing to pay a premium to own a Magic V2 as soon as possible.

And Honor Magic6, launched earlier this year as Honor's flagship product for 2024, not only continued the queueing trend in offline stores but also surpassed the full-day, all-channel sales of Honor Magic5's first sales day within three minutes, breaking all previous records for Honor's new product first sales days.

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

From being unwelcomed to igniting the market, this is not a story about luck but stems from the seeds planted by Honor more than three years ago.

Taking Honor Magic V2 as an example, one of its major selling points is its 9.9mm thin and light body, which requires a systematic engineering effort involving batteries, screens, cooling solutions, and more dimensions. To achieve this, Honor had already embarked on exploring ways to overturn the inherent standards of the mobile phone industry when it first entered the foldable screen market.

And now, Honor's new generation of foldable phone, Magic V3, not only brings together Honor's past "big moves" but also sets a new record for the thinnest and lightest folded state, making the market trend self-evident; the AI seeds sown previously have also blossomed one after another, infiltrating its product matrix.

With the dual growth of technology and the market, the once slightly frustrated Honor store staff can now confidently shout slogans like "beating competitors."

The End

Honor loves the story of "the slow bird catching up by taking an early start," and for the now mature Honor, where to fly after its wings are full has naturally become a new proposition.

Zhao Ming once said that a great product defines a brand and oneself. And "greatness" might be exactly what Honor aspires to be at present.

Throughout global business history, Apple, starting from a garage startup to a tech giant with a global market value of $3.5 trillion, is undoubtedly an interpretation of going from good to great.

The reasons for this lie not only in supply chain management, corporate culture, and other dimensions but also, undoubtedly, in Apple's past relentless pursuit of innovation and foresight for the future—as embodied in the famous quote "Only Apple can do," great companies not only meet existing needs but also create new ones, changing people's lifestyles.

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

But as Cai De mentioned, Honor still has a long way to go before true success. "We can't be complacent; we still need to proceed steadily. If we get too carried away, we'll be vulnerable to attacks," he said.

At this stage, Honor is sufficiently excellent and outstanding, but it is still some distance away from greatness—the past has seen remarkable progress, but now, whether it's embracing the AI wave, accelerating globalization strategies, or pushing forward with an IPO, Honor needs to continue forging ahead.