In a significant leadership shakeup at Honor, CEO Zhao Ming has resigned from his position just as the smartphone manufacturer prepares for its initial public offering (IPO). This unexpected departure marks the end of Zhao's decade-long journey with Honor and signals a crucial turning point for the company's future direction.
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| "A significant leadership shift at Honor as CEO Zhao Ming resigns, marking a new chapter for the company" |
The Sudden Leadership Change
On January 17, 2025, Honor announced through its internal network that Zhao Ming had resigned from his position as CEO. The company's board of directors appointed Li Jian as the new CEO, marking a significant transition in Honor's leadership. This change comes at a critical time as Honor is completing its transformation into a joint-stock company and preparing for its IPO.
Market Performance Challenges
Honor's market position has significantly weakened in recent quarters. According to IDC data, Honor's Q4 2024 device activations reached 9.62 million units, representing a 13.26% market share and dropping to fifth place in the competitive smartphone market. Canalys reports show a steady decline in Honor's mainland China market share throughout 2024, falling from 16% in Q1 to below 14% by Q4, ultimately losing its position among the top five manufacturers.
Financial Implications
The company's valuation has become a point of concern for investors. Honor's pre-IPO valuation is set at CNY 200 billion, significantly lower than the approximately CNY 260 billion that Shenzhen state-owned assets paid when acquiring Honor from Huawei. With total shareholder investments potentially exceeding CNY 300 billion, this represents a substantial paper loss for investors.
Strategic Challenges
Under Zhao's leadership, Honor struggled to establish a distinct identity after separating from Huawei in 2020. The company faced difficulties in differentiating itself in terms of brand power, competitiveness, and innovation. Despite attempts to showcase AI capabilities and other features, Honor failed to create a unique value proposition in a market dominated by established players like Huawei, Vivo, and Xiaomi.
New Leadership Direction
Li Jian, the incoming CEO, brings extensive experience from his tenure at Huawei since 2001 and his roles in Honor since 2021. His background in strategic management and global operations, particularly his success in international markets, suggests a potential shift in Honor's strategic focus. However, the challenges ahead remain substantial as Honor seeks to reestablish its market position and proceed with its IPO plans.