Honor embarks on a new era with a change in leadership.

Produced by | Xinpinlue Finance & Economics | Author | Wu Wenwu

Rumors about changes in Honor's management team have been circulating for days, and now the truth has come to light!

According to Xinpinlue Finance & Economics, reports from media outlets such as National Business Daily indicate that on January 17, Honor Device Co., Ltd. (hereinafter referred to as Honor), a renowned Chinese smartphone brand, issued an internal announcement stating that Zhao Ming had resigned from his position as CEO and related duties due to health reasons. After thorough discussions, the board of directors decided to respect Zhao Ming's personal wishes and accept his resignation, appointing Li Jian as the new CEO.

The news of Zhao Ming's departure from Honor was not unfounded. On January 14, rumors began to circulate in the market that Zhao Ming would resign and take the entire Magic 7 team with him. Zhao Ming swiftly denied these rumors on Weibo, and Honor also publicly responded that Zhao Ming's resignation was false information.

Unexpectedly, two or three days later, the news of Zhao Ming's resignation from Honor was officially announced internally and quickly reported by the media, sparking widespread concern and heated discussions in society.

A senior industry insider told Xinpinlue Finance & Economics that Honor had just completed its shareholding reform and was accelerating its IPO process. At this juncture, it was ideal for the management team to remain stable. However, from rumors to confirmation of Zhao Ming's resignation, both internal employees and the outside world were extremely shocked. It seemed there were reasons, yet there also seemed to be none.

Now that Zhao Ming has left Honor, the market is abuzz with discussions about his contributions to Honor's development, his reluctance to part ways, and the prospects and future of New Honor under its new leadership.

01 "Mingge" Zhao Ming and His Reluctant Departure from Honor

Zhao Ming carries many labels, such as former Huawei employee, helmsman of Honor, and the soul of Honor. His leadership style and philosophy have profoundly impacted Honor's development.

For instance, Zhao Ming has always emphasized product quality, user experience, and internet marketing, guiding product development and improvement through keen market insight and business foresight.

Public information reveals that Zhao Ming was born in Shanghai in 1973 and graduated from Shanghai Jiao Tong University with a master's degree in communication and electronic systems.

Zhao Ming, a former Huawei employee, joined the company in 1998, initially working as an algorithm research and development engineer. He was later transferred to the marketing department for technical sales and then back to the research and development department to oversee the entire 3G base station development. During his tenure at Huawei, Zhao Ming was hailed as one of the "Three Product Geniuses" and held several key positions in Huawei's core business.

Let's rewind to November 17, 2020. Due to US sanctions against Huawei, which were hampered by the chip shortage, Huawei announced the sale of 100% of its equity in Honor to acquirers including the Shenzhen State-owned Assets Supervision and Administration Commission and over 30 channel partners. Honor officially separated from Huawei.

Ren Zhengfei, the founder of Huawei, expressed his sentiments at Huawei's farewell meeting for Honor, saying, "Autumn winds bring cold and apricot leaves turn yellow, but iron trees will eventually bloom. Those who cannot defeat you will ultimately make you stronger."

Since then, Zhao Ming has become the helmsman of Honor, leading its independent development. In the early days of Honor's independence, the brand needed to regain consumer trust, rebuild its brand, and switch its supply chain.

Under Zhao Ming's leadership, Honor completed the reconstruction of its R&D, product, supply chain, and market systems in just four months. Despite obtaining key components such as chips later than the industry, Honor launched the Honor 50 series 30 days ahead of schedule.

Honor has indeed achieved impressive results in recent years. By the third quarter of 2021, Honor's market share began to grow significantly.

Canalys data shows that in the first quarter of 2022, Honor's domestic market share reached 20%, topping the quarterly rankings. Since then, Honor has consistently ranked among the top five domestic manufacturers. In the third quarter of 2023, Honor once again topped the rankings with an 18% market share.

By the third quarter of 2024, Honor's domestic market share had reached 14.6%, firmly establishing itself in the industry's first tier.

Under Zhao Ming's leadership, Honor has made a comprehensive push, particularly focusing on developing the high-end smartphone market. The Magic series launched by Honor has performed well in sales. In the overseas international market, Honor achieved a 133% increase in sales of foldable smartphones in Europe in the first half of 2024, with 70% of this growth coming from Honor.

According to Counterpoint Research's statistical report, in the second quarter of 2024, Honor's foldable smartphone market share in Europe surpassed Samsung for the first time, ranking first in Western Europe.

In 2024, Honor closely followed technological trends and intensified its efforts in AI development. On October 23, 2024, it launched the new Magic 7 series and introduced the "AI Autonomous Driving" function, offering features such as one-click coffee ordering, subscription inquiry/cancellation, application permission settings, intelligent form filling, shopping price comparison, and store exploration and address finding.

Both the outside world and Honor's internal staff have recognized Zhao Ming's achievements over the past few years.

Among the many labels associated with Zhao Ming, many employees within Honor refer to him as "Mingge," reflecting his affinity.

After Honor officially announced Zhao Ming's resignation as CEO and it was reported by the media, Zhao Ming posted a long farewell message, stating that choosing to let go and leave Honor was the most difficult decision of his life.

Despite his reluctance, Zhao Ming still chose to leave.

02 New Honor in the Post-Zhao Ming Era Faces Considerable Pressure

As mentioned earlier, Honor separated from Huawei during its trough four years ago, and Zhao Ming has led Honor's development to this point, achieving today's New Honor. Now that Zhao Ming, the soul of Honor, has left, the New Honor in the post-Zhao Ming era will become the next New Honor.

The smartphone industry is fiercely competitive, with rapid updates and iterations. New Honor cannot rely on its current achievements forever. In reality, Honor is facing an unprecedented competitive environment in the industry.

Although Honor is at the forefront of the smartphone industry, its shipments have declined and performed poorly since the second half of 2024. Some media have commented that the decline in sales may be one of the direct reasons for the leadership change at Honor.

According to Canalys data, in the second half of 2023, Honor ranked first and second in the Chinese market with shipments of 11.9 million and 11.8 million units, respectively. In the first three quarters of 2024, Honor consistently ranked among the top three in China's smartphone market shipments. IDC data shows that in 2023, Honor's market share was second only to Apple.

According to Canalys' full-year statistics, vivo became the largest smartphone vendor in 2024, followed by Huawei. Apple, OPPO, and Honor ranked third, fourth, and fifth, respectively, each with a market share of 15%. In the fourth quarter of 2024, Honor fell out of the top five, with a market share of less than 14%.

In the view of Xinpinlue Finance & Economics, one of Honor's true and direct competitors is Huawei, especially in the high-end smartphone market, where Huawei's high-end smartphone series poses obvious competition to Honor's.

Since Huawei announced its high-profile return to the smartphone business in 2023, it has been bringing increasing pressure to Chinese smartphone brands, including Honor.

According to a foreign media report, Huawei has once again accelerated its international smartphone offensive. By the end of 2024, advertisements for its latest foldable smartphone, the Mate X6, appeared in countries such as Dubai and Malaysia, and the model has been supplied to about 60 countries and regions worldwide. This demonstrates the aggressive momentum of Huawei's smartphone development, which is expected to form significant competition for Apple and existing Chinese smartphone brands, including Honor, in overseas markets.

Therefore, in the future, Honor needs to continuously introduce new products to attract consumers and defend, consolidate, and maintain its current industry position.

A senior insider familiar with Honor's internal situation told Xinpinlue Finance & Economics that although Honor has been reshaping its brand image independently from Huawei for four years and has achieved remarkable results, it is still challenging. Although Honor is well-known, it is still difficult to shake off Huawei's shadow and label, especially in some third- and fourth-tier cities and small towns, where consumers still believe that Honor is part of Huawei.

Honor strives to remove Huawei's label, but it will take a very long process, or it may be difficult to remove Huawei's label and shadow entirely.

While Honor's efforts to remove Huawei's label and shadow are challenging, they have both advantages and disadvantages. They can attract some consumers, but in the long run, Honor still needs to continue to make progress.

Li Jian, the new CEO of Honor who succeeds Zhao Ming, is also a former Huawei employee who joined New Honor in 2021. He has successively held positions as a core member of the management team, vice chairman, director, and president of human resources. He is not a CEO who was parachuted in and is familiar with the internal workings of Honor, clearly understanding Honor's strategy and upcoming goals and tasks.

For New Honor in the post-Zhao Ming era and its new CEO, Li Jian, there are currently two key tasks for Honor:

First, how to maintain Honor's industry position and stand out in future competition with Huawei and other peers, put simply, to boost sales.

Second, to drive Honor's scheduled listing. Honor has completed its shareholding reform, and the next goal is to promote its timely listing. Behind this lies capital games and market influences. Zhao Ming's sudden resignation during the critical period before Honor's IPO preparation was surprising to the outside world. The new CEO of Honor must lead the company to develop more steadily.

03 Conclusion

Honor, which separated from Huawei years ago, has developed to its current scale and achievements, with Zhao Ming making significant contributions. Now that Zhao Ming has left with composure, the era of Li Jian, the new CEO of Honor, has begun.

The road ahead is long, and the new Honor, its new CEO, and employees face fierce market competition and a rapidly evolving market environment. Especially with the strong return and rise of Huawei's smartphone business, Honor needs to continue to exert efforts and prove itself with products and sales.

A senior industry insider analyzed for Xinpinlue Finance & Economics that after the new CEO of Honor takes office, the company will likely enter a brief adjustment period. At this stage, Honor not only needs stability but also needs to accelerate its development more steadily.