China Mobile Communication Co., the parent company of China’s largest mobile operator, has taken a significant stake in Honor Device Co., a rapidly expanding smartphone brand that was spun off from Huawei Technologies Co. in 2020. The investment marks the beginning of a strategic alliance between China Mobile and Honor, which ranked fourth in China for smartphone shipments in the second quarter of 2024, according to IDC.
In a statement to Bloomberg News, Honor confirmed the investment, emphasizing that both companies will leverage their strengths to enhance consumer experiences and drive innovation. The move is seen as a major boost for Honor as it prepares for an initial public offering (IPO) and continues to grow its market presence.
Honor was originally part of Huawei but separated in 2020 to avoid the impact of U.S. trade sanctions that crippled Huawei’s mobile business. Since its spinoff, Honor has received backing from local government entities and investors, including display maker BOE Technology Group Co.
The investment by China Mobile comes at a crucial time as the smartphone market begins to recover from the downturn caused by the COVID-19 pandemic. Chinese carriers are facing challenges such as declining average revenue per user, slow subscriber growth, and reduced demand for digital services, according to Bloomberg Intelligence analysts Marvin Lo and Chris Muckensturm.
Internationally, Honor has gained traction with its premium devices and an expanding lineup of foldable smartphones, further solidifying its position in the global market.
