Honor, China’s smartphone maker, is set to invest $10 billion in AI over five years to develop AI-powered devices. CEO James Li announced this at the Mobile World Congress, as the company shifts from smartphones to include PCs, tablets, and wearables. Honor aims to recover from a market position drop amid intensified competition.
Honor, the Chinese smartphone manufacturer, has declared a significant investment of $10 billion over the next five years to advance artificial intelligence within its devices. This initiative, as stated by CEO James Li during the Mobile World Congress in Barcelona, represents a strategic shift for the Shenzhen-based company, which aspires to evolve beyond its smartphone roots by developing a range of AI-enabled personal computers, tablets, and wearable technologies.
In December, Honor finalized a shareholder restructuring aimed at facilitating an initial public offering, although no specific timeline for this IPO has been provided. The announcement coincides with a surge in AI investments within China, fueled by growing interest in the affordable large language models developed by startup DeepSeek, prompting various stakeholders, including local governments and home appliance manufacturers, to innovate and enhance their AI research initiatives.
Despite this forward momentum, Honor experienced a decline in its position within the Chinese smartphone market, falling from second to fourth place in terms of phone shipments last year, with a market share of 14.9%. This downturn has been attributed to escalating competition from its former parent company, Huawei, and strong advancements from rival Vivo, according to independent consultancy IDC. Furthermore, reports indicated Honor’s receipt of considerable backing from the Shenzhen local government, encompassing research and development funding, tax incentives, and assistance in expanding operations internationally.
In summary, Honor’s aggressive $10 billion investment in AI technology marks a pivotal transition for the company as it seeks to expand its product offerings beyond smartphones. The initiative aligns with broader trends of increasing investments in AI across China, although Honor must navigate competitive challenges within the market. The upcoming IPO and government support may provide further advantages as the company strategically positions itself for future growth.
Original Source: www.tradingview.com
