Chinese smartphone maker Honor has announced a $10 billion investment in AI development over the next five years, aiming to expand its product range beyond smartphones to include AI-powered PCs, tablets, and wearables. This investment follows a successful shareholder restructuring that positions the company for an IPO, amid a significant rise in AI investment in China. Honor also faces increased competition and has lost market share but is receiving government support for its endeavors.
Honor, a Chinese smartphone manufacturer, has announced a substantial investment of $10 billion over the next five years to enhance its artificial intelligence (AI) capabilities for devices. The company plans to transition from being predominantly a smartphone maker to a broader technology provider, developing AI-integrated PCs, tablets, and wearables, as stated by CEO James Li at the Mobile World Congress in Barcelona.
In December, Honor completed a significant shareholder restructuring that positions it for a potential initial public offering (IPO), although a specific timeline for this move remains undisclosed. This announcement coincides with a surge in AI investments in China, spurred by interest in startup DeepSeek’s cost-effective large language models and the rush by varied sectors to integrate AI technologies into their offerings.
Despite facing heightened competition, Honor’s market share in Chinese smartphone shipments fell from second to fourth place last year, capturing 14.9% of the market. The resurgence of its former parent company, Huawei, along with strong competition from Vivo, contributed to this decline. Moreover, in August, media reports indicated that Honor is benefitting from significant support from the Shenzhen local government, which includes funding for research and development and incentives for international expansion.
In summary, Honor’s commitment to invest $10 billion in AI development signifies its ambition to evolve beyond a smartphone-centric business model, aiming to create a diverse range of AI-driven devices. The company’s restructuring efforts and favorable governmental support may pave the way for a future IPO. Despite recent setbacks in market share, Honor is strategically strategizing to regain prominence in the competitive technology landscape.
Original Source: www.tradingview.com
