China's Smartphone Market Accelerates High-End Trend, But Price Hike Sparks Controversy, Honor CEO Zhao Ming: "We Must Shoulder the Pressure"

China's Smartphone Market Accelerates High-End Trend, But Price Hike Sparks Controversy, Honor CEO Zhao Ming: "We Must Shoulder the Pressure"In the first half of 2024, China's smartphone market exhibited a high-end trend, with sales in the segment exceeding $600 (approximately RMB 4,338) increasing by 8% year-on-year, while the overall market grew by 4%. According to a report by market research firm Counterpoint Research, this growth trend is attributed to sustained consumer demand for high-end phones and manufacturers' continuous investment in premium products

China's Smartphone Market Accelerates High-End Trend, But Price Hike Sparks Controversy, Honor CEO Zhao Ming: "We Must Shoulder the Pressure"

In the first half of 2024, China's smartphone market exhibited a high-end trend, with sales in the segment exceeding $600 (approximately RMB 4,338) increasing by 8% year-on-year, while the overall market grew by 4%. According to a report by market research firm Counterpoint Research, this growth trend is attributed to sustained consumer demand for high-end phones and manufacturers' continuous investment in premium products.

Concurrently, the average price of domestic smartphones has been steadily rising. GfK China's report reveals that the average price of domestic smartphones reached RMB 3,480 in the third quarter of 2023, and this year's price hike is projected to further push the average price above RMB 4,000.

Experts attribute the price surge to factors such as rising raw material costs, increasing supply chain expenses, and continuous investments in research and development. These factors have compelled manufacturers to adjust prices to maintain profitability. However, according to a survey by Sina Tech, 70% of users expressed disapproval of smartphone price increases, arguing that the costs should not be passed on to consumers.

In the face of controversy, Honor CEO Zhao Ming recently shared his perspective on the smartphone price hike. He stated that Honor remains steadfast in its commitment to not raising prices, focusing solely on honing excellence and clarifying that there is no truth to the rumors of late-night conversations to persuade executives to avoid price hikes. Zhao Ming also candidly acknowledged that they must shoulder the pressure, as consumer pressure is even greater.

To balance affordability and product experience, Honor has adopted a strategy of enhanced features without price increases or minimal increases for its latest Magic7 series. It is understood that the Honor Magic7, despite feature enhancements, only saw a RMB 100 price increase compared to its predecessor. The Honor Magic7 Pro, building upon the standard version with further upgrades, retains the same starting price as its predecessor.

Honor's strategy reflects its understanding of consumer and market demands. While pursuing high-end products and profitability, Honor actively controls costs, striving to provide consumers with more value-for-money products.

As competition intensifies in the smartphone market, manufacturers need to strike a balance between high-end features and pricing. Honor's approach might provide a benchmark for other manufacturers, showcasing how to achieve sustainable growth while fulfilling consumer needs.