BUSINESS

Honor Doubles Down on Premium Handsets in Latin America

Published: Dec. 18, 2024 7:17 p.m. GMT+8

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Honor’s Magic 6 Pro smartphone gets showcased at the Mobile World Congress 2024 in Barcelona, Spain, on April 2. Photo: VCG

Chinese smartphone-makers are waging an intense price war in Latin America’s crowded budget segment, prompting some companies including Honor Device Co. Ltd. to double down on the premium market in search of profits.

The shift comes as the region’s slowing economic growth impacts the smartphone market, particularly the mid-to-high end segments.

Despite 20% year-on-year growth in smartphone shipments during the second quarter of 2024, average prices fell 12% to $287, said Miguel Perez, senior analyst at market research firm Canalys, warning of a significant slowdown in the overall smartphone market amid the deluge of new products. The shipment growth slowed to 10% in the third quarter, Canalys data showed.

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Chinese smartphone makers are in a price war in Latin America's budget segment, with Honor focusing on the premium market due to intense competition and economic slowdown affecting mid-to-high segments.
Despite a 20% increase in shipments in Q2 2024, average smartphone prices dropped by 12% to $287, with budget phones now comprising 43% of shipments.
Xiaomi and Transsion dominate the sub-$200 segment, while Honor seeks to expand its premium market presence, achieving triple-digit growth and becoming a top-five brand in Latin America.

AI generated, for reference only

Who’s Who

Honor Device Co. Ltd.: Honor Device Co. Ltd., a late entrant to Latin America after spinning off from Huawei, is shifting focus from budget to premium markets due to intense competition. Launched in 2021, they introduced high-end models like the Magic Pro, competing with brands like Apple. By leveraging Huawei’s business structure, Honor achieved rapid growth, becoming a top-five brand with 7% market share, but still seeks breakthroughs against larger rivals.

Huawei Technologies Co. Ltd.: Huawei Technologies Co. Ltd. is the company from which Honor Device Co. Ltd. was spun off in 2020. Honor entered the Latin American market in November 2021, focusing on high-end models to establish its brand image and compete with major players like Apple.

Apple Inc.: Apple Inc. is mentioned as a competitor in the premium smartphone segment in Latin America. Honor launched its high-end Magic Pro line, priced over $1,000, to compete directly with Apple's offerings in the region.

Xiaomi Corp.: Xiaomi Corp. operates in Latin America's budget smartphone segment, holding 18% market share in sub-$200 phones, alongside Motorola and Transsion. With a rapid growth strategy, Xiaomi launched its Redmi 13C below $100 and Note 13 for $150-$249, which quickly became bestsellers. Its early presence and brand recognition give Xiaomi a competitive edge in the region, impacting other manufacturers' strategies.

Shenzhen Transsion Holdings Co. Ltd.: Shenzhen Transsion Holdings Co. Ltd. targets the low-end smartphone segment in Latin America. In the third quarter, it captured 18% of the sub-$200 market, matching Xiaomi and Motorola, while Samsung led with 24%. In 2023, Transsion was among the top five suppliers in the region, with shipments surging 110% year-on-year, highlighting its rapid growth and competitive stance in the budget segment.

Motorola Solutions Inc.: Motorola Solutions Inc. holds an 18% market share in the sub-$200 smartphone segment in Latin America, competing on par with Xiaomi Corp. and Shenzhen Transsion Holdings Co. Ltd. By the third quarter, Samsung Electronics Co. Ltd. led this segment with 24%. Despite intense competition in the budget market, Motorola remains a significant player, traditionally dominating the top 10 bestsellers list along with Samsung, as per Counterpoint's market research data.

Samsung Electronics Co. Ltd.: Samsung Electronics Co. Ltd. led the sub-$200 smartphone segment in Latin America with a 24% market share in the third quarter, according to Canalys data. Traditionally dominant in the region alongside Motorola, Samsung faced strong competition from Xiaomi and Transsion. Despite the price war in budget models, Samsung remains a leader, especially as the share of phones priced below $200 increased significantly, reflecting the shifting dynamics in the Latin American smartphone market.

Oppo Co. Ltd.: Oppo Co. Ltd. launched its mid to high-end Reno series in Mexico in 2021, focusing on the mid-to-high end market segment. By the third quarter of that year, Oppo became the fourth-largest smartphone-maker in Mexico by shipments. It competes with Motorola and Samsung in the $400-plus price segment. An industry executive noted that Xiaomi's brand recognition in the low-end market has pushed Oppo toward higher-margin premium products.

AI generated, for reference only

What Happened When

November 2021：: Honor debuted in the Latin American market, a year after spinning off from Huawei Technologies Co. Ltd.

Fourth quarter of 2022：: Honor began achieving triple-digit quarterly growth in shipments in Latin America.

January 2024：: Xiaomi introduced the Note 13 priced at $150-$249 in Latin America.

February 2024：: Honor launched its top-end Magic Pro line in Latin America, priced at more than $1,000.

First quarter of 2024：: Honor became one of the top five brands in Latin America, cornering 7% of the market.

Second quarter of 2024：: Smartphone shipments in Latin America grew 20% year-on-year, with average prices falling 12%.

Third quarter of 2024：: Shipment growth slowed to 10%, and phones priced below $200 accounted for 43% of all smartphones delivered in Latin America.