(Yicai Global) April 19 -- Honor, the budget smartphone brand spun off from beleaguered Huawei Technologies last November, has set itself the task of becoming one of the world’s top three mobile phone brands, the chairman told Yicai Global in an exclusive interview.

Divested from Huawei to free it from the US export sanctions that were crushing the Chinese telecoms giant’s supply chain, Honor will quickly regain market share and is due to launch a number of new models this year, Wan Biao said.

As an independent entity, Honor does not need special approval from the US commerce department to purchase software and hardware from American companies. The US government blacklisted Shenzhen-based Huawei in May 2019 over national security concerns.

Below are excerpts from the interview.

Yicai Global: How is Honor's supply chain recovering? Is the current chip shortage slowing down recovery?

Wan Biao: Honor started to reconnect with global suppliers as soon as it started out as an independent entity in November last year. By January it had established a contractual relationship with most of the world’s major suppliers, and it launched the Honor V40 that month. In terms of chips, I think the crunch will ease substantially in the second half.

YG: What plans does Honor have for its sales channels?

WB: Honor adopts a three-dimensional sales channel model. It will operate a few flagship stores in China's first-tier cities. It will also co-operate with a number of retail partners to set up Honor experience stores.

YG: Is Honor's existing research and development team mostly inherited from Huawei?

WB: Yes. Our R&D staff were taken from Huawei. The human resource department's top task in the first half is to hire talent. Honor employs over 8,000 people and the number is expected to exceed 10,000 by year end. There are over 4,000 R&D staff and the number will continue to rise, with our R&D expenditure set to reach USD1 billion this year.

YG: Honor has suffered a sharp decline in market share in recent months. What market position does Honor expect to hold in the future?

WB: Honor occupied the biggest share of China's online market from 2018 and ranked second for omni-channel market share in the first half of last year.

But market share is not likely to fall any further. We are not worried about the future because Honor's user base, brand base, R&D and innovation capabilities as well as marketing team all remain intact.

Honor's market share will quickly recover following a new round of product launches. We have set ourselves the goal of becoming a global iconic technology brand and one of the world's Top Three smartphone brands.

YG: What are Honor’s plans for the overseas market?

WB: Honor did well in Russia for a long time and was once the second biggest cellphone brand there. We lost ground also because of the supply chain problem but we are confident our market share in the Russian market will rebound quickly.

Apart from Russia, we have also listed several other countries as key markets this year. In Europe, we will focus on the UK, France and Germany. We are also looking at countries in the Middle East, Latin America and the Asia Pacific region. In general, the countries we choose are those that have better basic conditions, greater market potential and are in line with our strategic goal of becoming a premium brand.

Editor: Kim Taylor