Huawei's low cost Honor smartphone unit sales up to 20M from 1M in one year after replicating Xiaomi's online strategy
Huawei's smartphone sales shoot up after copying Xiaomi's online strategy — (Reuters) - China's Huawei Technologies Co Ltd [HWT.UL] has taken sales of its low-price Honor brand …
Context & Ripple Effects
In late 2013, Huawei spun up Honor as an internet-native answer to Xiaomi, whose flash-sale, online-only playbook had redefined how cheap phones reached Chinese buyers without carrier or retail margins. A year on, the clone worked: Honor shipped 20 million units versus 1 million before, feeding into Huawei's wider 2014 jump to 75M smartphones and setting up a January follow-on where revenue rose 20% on higher-end devices.
That trajectory matters because it shows a fast follower out-executing the innovator's own model — and, per the related coverage, the same budget brand later helped propel Huawei to the #2 vendor spot worldwide before geopolitics forced its 2020 sale to a consortium of over 30 agents and dealers.
First-order effects
- Xiaomi loses exclusivity over the online-only budget strategy it invented: Huawei is now selling 20M Honor units a year through the same low-overhead channel, compressing the price band both brands fight in.
- Huawei gains volume scale that underwrites its broader handset business, visible in the company's 75M-unit 2014 tally days after this report.
Second-order effects
- Xiaomi faces a copycat with deeper manufacturing scale and R&D budgets, forcing it to differentiate beyond price — while every other Chinese vendor must now stand up an internet sub-brand just to defend share in the value tier.
- Carrier and retail channels lose relevance for entry-level phones as the two biggest Chinese brands route demand direct-to-consumer, shifting margin toward whoever controls the online storefront.
Third-order effects
- If fast-following works this well at the budget tier, the durable pattern is incumbent-led sub-branding: parent companies incubate cheap online brands, harvest them for volume and data, then either fold them back into premium lineups (as Huawei did) or divest them when external pressure demands (as the 2020 Honor sale shows).
The trend: Chinese handset makers are turning online-only budget sub-brands into a standard competitive weapon — cloned from Xiaomi, scaled by incumbents like Huawei, and eventually spun off or absorbed depending on political pressure.