The good defender is hidden beneath the earth; the good attacker moves above the heavens: quoted from “The Art of War: Military Formations”.
Honor has been laying out AI technology for 8 years, currently still hidden beneath the earth, making it difficult for users to perceive it significantly. But like the “Sword of the Son of Heaven”, it must be invisible, yet it can act “without action or trace, at no time or place, when used, people do not know, when hidden, people do not feel, hanging high like the sun and moon, unchanging like the stars”.
On April 25, IDC released a statistical report showing that in the first quarter of 2024, Honor captured the top spot in the Chinese smartphone market with a shipment market share of 17.10%, moving like thunder and shaking the heavens. IDC believes this is mainly due to Honor’s end-side platform-level AI empowering its high-end flagship products like the Magic6 series and folding phones.
This is Honor’s surpassing move in the face of Huawei’s strong return and after Apple secured the top spot in the Chinese smartphone market’s shipment volume in the fourth quarter of 2023.
Honor CEO Zhao Ming once said about how to use GenAI (Generative Artificial Intelligence, also known as GAI) technology: “Honor insists on doing the right and difficult things”. Therefore, unlike GAI applications launched by Huawei, Samsung, and OPPO, Honor chose to continuously build an end-side GAI system technology architecture with platform-level AI capabilities to deal with the industry’s fragmented end-side AI application challenges.
Honor’s platform-level AI capabilities are a core part of the “AI Reconstructing Operating System” layer in Honor’s four-layer AI architecture.
Functionally, Honor’s four-layer AI architecture is similar to the iceberg body beneath sea level, while the new user-intent-based interactive experience “Any Door” launched on December 28, 2023, is just the tip of the iceberg. IDC believes that it is precisely due to the interaction innovations brought by the underlying platform-level AI, such as “Any Door”, that helped Honor achieve the top shipment volume share in the first quarter of this year.
It is worth mentioning that Honor’s vision of platform-level AI technology on smartphones is guiding technology giants like Apple on how to implement AI technology on the end-side, marking a “moment of glory” for China’s technological innovation to give back to global technology.
AI Boosts Q1 Shipment Volume to the Top
On April 25, IDC released the latest statistical report showing that Honor’s market share in China for the first quarter was 17.1%, a year-on-year increase of 13.2%; Huawei’s share after its full return reached 17%, tying with Honor for first place in the Chinese market (Note: If two or more manufacturers’ revenue shares or unit shipment volumes differ by 0.1% or less, IDC will announce these manufacturers as tied in the Chinese smartphone market ranking); Apple ranked third with a significant lag at 15.6%.
Wall Street Journal noted that Honor’s first place in the Chinese smartphone market shipment volume in the first quarter has a rather unique industry background.
On August 29, 2023, Huawei’s 5G flagship high-end smartphone made a strong return: the HUAWEI Mate 60 series, equipped with fully domestically produced (referring to SoC chips from design to manufacturing) high-end SoC chips, was launched without announcement. This sparked a buying frenzy in the Chinese market, creating a rare scene of “hard to find a phone” after years of smartphones entering a saturated market.
Before this, Huawei’s executive director, Huawei Terminal BG CEO, and Huawei Smart Car Solutions BU CEO Yu Chengdong, at the HDC 2023 developer conference (2023.8.4), hinted that after facing well-known technical suppression, Huawei would rise again with the phrase – “The light boat has passed through thousands of mountains”.
On the 25th day after Yu Chengdong’s statement, the HUAWEI Mate 60 series was directly launched, and the domestic industry believes this event has the greatest impact on Honor, which shares the same origin.
Faced with such questions, what was Zhao Ming’s reaction at the time?
On August 8, 2023, Zhao Ming told Wall Street Journal, “Huawei’s return has the greatest positive impact on Honor. First, the market needs top players to participate. The presence of strong competitors indicates that the smartphone market still has considerable value; secondly, the existence of strong opponents can stimulate Honor’s full potential under pressure, further achieving ‘serving consumer needs’ to the fullest.”
Thus, in the third quarter of 2023 after Huawei’s return, the industry was surprised to find: Huawei returns, Honor tops.
On October 26 and 27, 2023, statistical reports released by IDC, Canalys, and Counterpoint all showed without exception that Honor ranked first in the Chinese smartphone market share for the third quarter; subsequent IDC reports further revealed that in the fourth quarter of 2023, Honor ranked first in the Android brand share in the Chinese smartphone market.
In other words, after the return of Huawei’s high-end flagship smartphones, Honor achieved the number one position in the Chinese market for two consecutive quarters. In the first quarter of this year, Honor achieved a triple crown.
How could Huawei return so strongly, and Honor not only was not suppressed but surpassed Huawei for three consecutive quarters? As for Apple, its market share ranking in the first quarter was only third.
In addition to maintaining existing advantages (such as eye-protection screens, ultra-thin high-density batteries, privacy security, ultra-light folding machines, etc.), what new reasons did Honor have to continue leading the industry in the first quarter?
On December 28, 2023, Honor first announced the new interactive function of MagicOS 8.0 – Any Door. This is the first show of Honor’s platform-level AI technology capabilities and a strategic demonstration of how Honor’s AI technology will be implemented on the end-side. The latest IDC report believes that Honor’s achievement of being China’s number one for the third time in the first quarter is fundamentally driven by this.
IDC reports that “thanks to the increase in AI functions, as well as the comprehensive upgrades in imaging, screens, etc., Honor’s new flagship Magic6 series had a first-quarter shipment volume that exceeded the sum of the previous two quarters of the previous generation product. With the promotion of the platform-level AI-equipped Honor Magic V2 and other folding screen family products, since 2023, the year-on-year growth rate of Honor’s folding screen smartphones has reached a maximum of 675.4%”.
IDC reports show that relying on the excellent performance of Honor’s Magic6 series and folding screen family, Honor significantly improved its market share in the high-end market above $600 in the first quarter, with a year-on-year shipment increase of 123.3%. According to IDC’s forecast, from 2024 onwards, the proportion of the new generation of AI smartphones will increase significantly, thus driving a new wave of replacement.
From July 12 to October 12, 2023, Honor continuously released three new folding products (Magic V2, V Purse, and Magic Vs2), continuously breaking the global record for ultra-thin products, eliminating the physical boundary differences between folding machines and flat machines.
In addition to the excellent experience of repeatedly setting ultra-thin records, Honor’s platform-level AI through the intelligent full-scene operating system “MagicOS 8.0” updates on these three folding machines, transforming them into AI smartphones, significantly enhancing the long-tail technical competitive lifecycle of Honor’s folding machines, thus further boosting their shipment volume.
Differences in Honor’s AI Smartphone Technology Route
AI smartphones are becoming a collective cognitive variable driving the smartphone stock market towards new increments.
Thanks to GAI technology, Honor claimed the top spot in the Chinese market in the first quarter; additionally, from a global market perspective, user acceptance of AI smartphones is becoming increasingly difficult to ignore.
On March 18, Counterpoint released a report stating that the global sales of Samsung Galaxy S24 series increased by 8% compared to the S23 series in the first three weeks after launch. “The driving factor comes from the excellent specifications of S24 Plus optimizing the GAI experience, leading to the largest sales increase”.
It can be seen that Counterpoint believes the Samsung S24 performed well due to the optimized application experience through GAI technology.
But what is an AI smartphone? Currently, there is still a lack of consensus in the industry regarding the definition of AI smartphones.
IDC’s recently released report believes that compared to traditional smartphones, those that meet the characteristics of “equipped with SoC that can support faster and more efficient operation of end-side GenAI models, have NPU with performance exceeding 30 TOPS, and support GenAI models including Stable Diffusion and various large language models running on the end-side” are AI smartphones.
“AI smartphones mean reconstructing and enabling all aspects of smartphone applications, operating systems, consumer experiences, and (smartphone) business logic with AI technology,” Zhao Ming said. “As a foundation, AI technology is ubiquitous on smartphones, which can be called AI smartphones.”
The most representative of Zhao Ming’s viewpoint on the definition of AI smartphone technology is Honor’s platform-level AI. Compared to Samsung, OPPO, and Huawei, which treat AI as an upgraded version of individual APP tool applications, such as photo AI elimination, call summaries, text and voice translation, Honor’s approach is to platformize AI, empowering all components of smartphones.
Zhao Ming stated, “Honor uses AI as the underlying operating system, enabling and reconstructing all business logic and application services of (smartphones), which is Honor’s most important AI technology orientation.” However, starting from the bottom level, compared to treating AI as an application, there is a huge difference in terms of user perception: the former is difficult for users to perceive.
Steve Jobs, after regaining control of Apple, chose the designer soul figure Jonathan Ive, who once said, “Simply putting passionate enthusiasm into obvious things is far from enough; you need to focus your attention and passion on the details that people easily overlook, which can make a decisive difference.”
Therefore, although everyone currently recognizes the importance of AI technology, how to understand the relationship between AI technology and user needs, whether to start from explicit single applications or to solidify invisible system/platform-level AI capabilities first?
Honor chose to walk the “correct and difficult” road: continuously and deeply improving GAI’s system-level architecture capabilities on the end-side.
Currently, Honor’s AI architecture is divided into four layers: in order of importance from bottom to top, the first layer enables cross-system integration, the second layer is AI reconstructing the operating system, the third layer is AI end-side applications, and the fourth layer is AI end-cloud collaboration. This is currently the only system-level AI technology framework for smartphones in the industry. Zhao Ming stated, “Honor’s AI capabilities focus on the first and second layers.”
To be pragmatic, Honor’s construction of a four-layer AI architecture has not been achieved overnight. This is the result of Honor’s 8 years of iterative layout in AI technology.
In 2016, Honor first introduced the concept of AI on smartphones. With the support of AI technology, smartphones can achieve corresponding demand perception and machine decision-making, marking the 1.0 stage of Honor’s AI capabilities.
In 2022, Honor launched the platform-level AI-enabled full-scene operating system MagicOS 7.0, which can actively provide scene suggestions and services based on information such as geofencing and user habits; the MagicOS 8.0 released on January 10, 2024, includes the “Any Door” function, based on user intent recognition, bringing intelligent flow across applications and devices.
Why Qualcomm and Apple Followed Suit
In the first quarter of this year, Honor not only secured the number one position in shipment market share in China, but also ranked first in the domestic Android single brand market share during the same period.
According to authoritative market research institutions’ statistical data, in the first quarter of this year, Honor ranked first in the Chinese smartphone market with a sales market share of 15.8%, while Huawei’s sales market share was 15.5%, ranking second, and Apple ranked third.
It is worth mentioning Apple. As a pioneer in the smartphone category and a foundation of the mobile internet industry, Apple’s pace of innovation has noticeably slowed down in recent years, even falling behind.
For example, recent news indicates that Apple will introduce a large number of GAI features in iOS 18, which will be released at the Apple Worldwide Developers Conference (WWDC) held on June 11 this year.
Isn’t this very familiar?
In the underlying operating system, using GAI technology to reconstruct and enable various business logic and application services of smartphones, isn’t this the platform-level AI capability that Honor has been building since 2022?!
Is Apple following in Honor’s footsteps in technology innovation? Can this be believed? Such a thing was unimaginable before, but now it has become a reality.
Since Zhao Ming raised the banner of “It’s time to break Apple’s monopoly” at the “MWC2023 Shanghai” exhibition on June 29, 2023, within less than a year, Apple has surprisingly followed Honor’s technology innovation strategy, which truly confirms Zhao Ming’s judgment that “the consumer electronics industry is long-cycle, and the most influential factors are never economic cycles, but innovation cycles”.
“We are pleased to see Apple choosing Honor’s technology development route,” Zhao Ming told Wall Street Journal. “Breaking Apple’s monopoly is not just a slogan, but a lead in innovation breakthroughs, understanding and insight into the future.”
In fact, since separating from Huawei and gaining independence on November 17, 2020, in less than three and a half years, Honor has indeed become an outstanding challenger.
Honor leads the industry in seven areas: single-reflex image capabilities, high-refresh eye protection screens, ultra-thin high-density batteries, ultra-thin folding machines that eliminate the physical boundaries between folding screens and flat machines, privacy protection in phone calls, all-scene communication capabilities brought by C1 signal enhancement chips, and platform-level AI (Magic Live intelligent engine core).
Industry giants following Honor’s technological innovation are not limited to Apple. On October 25, 2023, Qualcomm launched a new cross-platform technology named “Snapdragon Seamless” at the Snapdragon Technology Summit. This technology has high commercial strategic value.
Snapdragon Seamless integrates the capabilities of all terminals equipped with Qualcomm AI technology platforms (SoC chips): achieving seamless connection across multiple terminals across various operating systems (such as Android, Windows, and other operating systems) and sharing peripherals (becoming a de facto distributed terminal system) and data.
The strategic value of this technology has caught the attention of many domestic and foreign giants, including Microsoft, Google (Android), Xiaomi, ASUS, Honor, Lenovo, and OPPO, all of which are cooperating with Qualcomm to jointly create a multi-terminal experience empowered by Snapdragon Seamless.
However, Wall Street Journal noted that Qualcomm’s Snapdragon Seamless technology is strikingly similar in function and business logic to Honor’s MagicRing (Trust Ring) technology, which was showcased by Honor on November 17, 2022, and officially released on November 22 of the same year.
Wall Street Journal learned from Qualcomm that the terminal used to demonstrate Snapdragon Seamless technology was Honor’s product.
The fact that Qualcomm and Apple have followed Honor’s technology route shows that Honor, which continuously works in the unmanned zone of technological innovation, has become a leader in innovation in the industry, possessing the hard power to summon global top technology giants. This is a new contribution of China’s scientific and technological innovation power to global technology as “World Glory”.
Regarding AI smartphones, given time, with Honor’s forward-looking layout in the AI smartphone field, when the industry reaches a “sweet spot” – the intersection point of the best price and quality of products or services that meet user needs, which is the balance point between the price users are most willing to buy and the price companies are most willing to sell – Honor is likely to take the lead and stand atop the peak.
*The above content does not constitute investment advice and does not represent the views of the publishing platform. The market has risks, and investment needs caution; please judge and decide independently.
