With Zhao Ming's departure, Honor enters a new era in need of a resilient leader.

From whispers of resignation to his unprecedented silence, several rounds of denial, and finally an official announcement heralding a change in leadership, Zhao Ming, the former CEO of Honor, spent his final days with the company in a predictable yet dramatic fashion.

This narrative of "rumors" turned out to be a "widely anticipated prophecy." At a crucial juncture, as the company geared up for its IPO, Zhao Ming, who had spearheaded Honor's rebirth from scratch, chose to step down, revealing the company's anxieties and ushering in more uncertainties.

However, the change in leadership just before the listing also signifies that, four years after its independence, Honor's IPO journey has once again hit the accelerator, seen as a pivotal battle to overcome market challenges and meet capital expectations.

In the post-Zhao Ming era, Honor necessitates a "tough general"

In his internal resignation letter, Zhao Ming stated, "Thank you all for your appraisal of my work at Honor over the past four years, and even ten years. The achievements are attributed to the team and all Honor partners. Over the past decade, I've been cautious, walking on thin ice at every step, rarely experiencing the joy of success, and always contemplating how to guide the team to survive and thrive."

This "glorious" journey aligns with two roles: President and CEO of Honor. It also corresponds to the two phases he led Honor through: as an internet sub-brand under Huawei and as an independent entity post-spinoff in November 2020.

In 2013, Huawei launched the Honor sub-brand, positioned to compete directly with Xiaomi in terms of products and marketing; in March 2015, Zhao Ming became President of the Honor Business Unit, fully responsible for its operations. Online videos still exist of Yu Chengdong introducing Zhao Ming and Zhao Ming sharing his experiences with Yu Chengdong on expanding into overseas markets.

On November 17, 2020, Huawei announced the sale of its Honor business assets. Since then, Zhao Ming continued as CEO of Honor Terminal Co., Ltd., guiding Honor's independent development until now. Honor has also transformed from a Huawei internet sub-brand into an independent mobile phone company with multiple product lines, channels, and a comprehensive organizational structure.

At its lowest point, Honor's market share in China was merely 3%, but it rebounded into the mainstream in less than two years, reclaiming a top-five position from the "others" category and topping quarterly rankings several times—in the second quarter of 2022, the third quarter of 2023, and the first quarter of 2024, Honor emerged as the leading mobile phone brand in the domestic market with shares of 19.5%, 19.3%, and 17.1%, respectively, and the Magic series made breakthroughs in the high-end market.

This is the report card submitted by the new Honor four years after its independence. Zhao Ming's contributions to Honor can be encapsulated in one sentence: crafting a compelling narrative for Honor's listing to secure a higher valuation.

In this process, Honor has been deeply marked by Zhao Ming's persona, even merging Zhao Ming's personal IP with the Honor brand. For instance, his "Ming-style expressions" during press conferences and media interactions have become part of Honor's soft power and brand strength.

However, he fundamentally differs from Lei Jun. Ultimately, he was a professional manager who could be disengaged by external forces at any moment. This time, for example, he made "the toughest decision to let go and leave Honor."

In a sense, Zhao Ming also left at Honor's pinnacle. According to his farewell letter, "In 2024, the company achieved its profit and bonus budget targets, and everyone should have done well in terms of income and sales achievement rates."

He also left three major challenges for his successor: leading Honor to a successful listing; accelerating globalization and high-end progress; and executing strategic transformation and governance post-listing.

For now, Honor's priority is to stabilize morale and boost market confidence by consistently demonstrating its profitability, market growth potential, and future strategy to investors. After Zhao Ming's resignation announcement, Honor's management underwent a brief period of turbulence. Several senior executives, including Jiang Hairong, CMO of Honor China, and Zheng Shubao, head of the sales department of Honor China, have successively resigned.

It should be noted that Honor is not cash-strapped. At the beginning of 2024, Zhao Ming revealed that Honor's profit realization rate at that time was as high as 120%-130%, with tens of billions of cash flow on its books. Although it cannot match Lei Jun's boasted cash flow of over 150 billion, Honor's business units are more focused and pure, sufficient to support its future strategic expansion.

Honor's listing is also seen as being accelerated, tied to the eagerness of Honor's shareholders, distributors, and employees to cash in on their investments. Honor's equity structure is complex, with strong will from major shareholders, and minor shareholders, including distributors and employees, are also keen for Honor to go public to secure returns or cash out.

For instance, media reports introduced that in November 2023, Wu Hui, with a state-owned background, was parachuted in to serve as the chairman of Honor. One of his primary tasks is to drive the company's listing process, possibly conveying the attitude of major shareholders.

Moreover, an Honor employee revealed that there's a motto hanging inside the Honor company building: "Consumer-centric, striver-oriented." Aligning with the company's values, Honor also has an internal "striver agreement": employees forgo their annual leave and year-end bonuses in exchange for equity dividends post-listing.

Before leaving, Zhao Ming's most significant accomplishment was leading Honor to complete its shareholding reform. On December 28, 2024, Honor announced the completion of its shareholding reform, and the company name was changed from "Honor Terminal Co., Ltd." to "Honor Terminal Co., Ltd." After the reform, shareholder issues within Honor were largely resolved, and there were no significant obstacles to the listing. However, Honor's shareholder list still includes more than 20 enterprises and institutions.

Lessons from Lenovo's Qiao Jian

On January 17, Honor issued an official announcement stating that "Mr. Zhao Ming has resigned from his positions as the company's director and CEO due to personal reasons. The board of directors has decided that Mr. Li Jian will take over Mr. Zhao Ming's responsibilities."

In Tang Chen's view, Li Jian has been propelled to the forefront. Previously, there was limited public information about him. Before succeeding Zhao Ming, Li Jian's primary identity at events was as the director of Huawei's Chengdu Research Institute.

However, based on multiple pieces of information intentionally or unintentionally released by Honor officials and the media, Li Jian's personal profile has gradually become more comprehensive: starting with technology, establishing himself in global expansion, and managing group strategy. His external persona is characterized by strong sales attributes and proficiency in internal talent integration.

For Honor, after Huawei's strong return, facing an even more competitive smartphone market with intricate internal and external factors, it requires a robust leader to balance various relationships and steer the company towards a new horizon.

Before Li Jian, this balancing act belonged to Zhao Ming. In June 2024, during the media session following the launch of Honor's small foldable phone, Zhao Ming told the media, including Tang Chen, that Honor's listing was decided by the board of directors, and as the CEO, he would prioritize products and the market.

Zhao Ming's resignation signifies that after Huawei's spinoff of Honor, the relatively stable organizational structure will crack and potentially become unbalanced. Simply put, Li Jian is a "tough general from Huawei" and the "key man" that Honor currently requires.

As for Li Jian's "story," whether he is indeed the most suitable "tough general" for Honor in the post-Zhao Ming era, or whether Honor needs such a "key man" as portrayed by the media, it necessitates Honor to prove it with tangible market achievements in the future. In other words, Honor needs to sell more smart products and offer the industry and investors bigger surprises in its differentiated narratives of globalization and AI.

However, it cannot be overlooked that Li Jian has never managed the entire mobile phone business line comprehensively, and it remains uncertain whether his understanding of technology and industry development trends can guide Honor through subsequent challenges. This also easily associates him with Qiao Jian, the former head of Lenovo Mobile and current Senior Vice President of Lenovo.

Since 2015, Lenovo Mobile has been on a decline, with its market share in the mobile phone business plummeting and directly falling into the "others" category. At that time, Yang Yuanqing once reprimanded Lenovo Mobile, saying, "You can't be woken up even if you hit them with a hammer." From 2015 to 2018, from Liu Jun to Chen Xudong, then to Qiao Jian, and finally to Chang Cheng, Lenovo Mobile underwent four significant leadership changes in just three years.

Among them, in November 2016, Chen Xudong was only in charge of Lenovo Mobile for a little over a year before being transferred to oversee Lenovo's global service business, replaced by Qiao Jian, a female general. According to public reports, Qiao Jian, who had no prior experience in the mobile phone business, stated publicly that she was "volunteering" to continue Chen Xudong's vision and make significant changes to Lenovo Mobile by poaching talent and pruning brands.

The former involved continuously poaching senior executives from external operators and other mobile phone manufacturers with heavy investment, and the latter involved drastically pruning the Lenovo brand of mobile phones, retaining only the Motorola brand. But the good times didn't last long, as these senior executives left one after another, and Lenovo's mobile phone market share continued to decline. In May 2018, Qiao Jian was transferred, and Chang Cheng took over.

Qiao Jian's lessons can be summarized into two points: firstly, ignoring the trends and laws of the mobile phone industry and betting on the wrong channels and product "trees." By 2017, smartphones had already matured, but Lenovo Mobile was still focused on operator channels and product innovation centered on modular phones, attempting to lead a new trend through its own efforts, but it was no match for the iPhone.

Secondly, there was strategic drift and frequent leadership changes. At that time, some netizens sarcastically commented that Lenovo would cut off any brand that performed well, earning it the nickname of "China's Microsoft." This was indeed the case. In just three years, four leaders and the strategies they formulated didn't have the time to compete with the market and competitors before being condemned. The later situation of Lenovo Mobile relied solely on the Motorola brand to support it overseas, and the domestic "Zhonghua Kulian" landscape no longer existed.

This is a lesson for Li Jian. Fortunately, Honor has already demonstrated a positive entrepreneurial spirit in its operations. Following the major leadership changes, Fang Fei, President of Honor's product line, recently posted that he had been conducting field research for some time and was recently discussing and sorting out future product strategies with the team. Centering on Honor's product value proposition of being consumer-centric, it is essential to firmly establish more distinctive product competitiveness, so that different series of Honor products have distinct and clear DNA to win the affection of more consumers.

It is evident to the discerning that this is a new beginning, but it is far from sufficient. Li Jian needs to provide more answers.

Reference materials: Tang Chen, "Mission Failed! Zhao Ming 'Chose to Let Go and Leave' Before Honor's Listing"; Guangzi Planet, "Honor Pushed to List"; LatePost, "Honor Changes Leadership: Four Years of Incubation, Saturated Investment, Rebuilding a Global Brand"