Honor CEO takes aim at iPhone in China with foldable phone

The absence of a foldable phone in Apple Inc.’s portfolio is creating an opening for rivals to overtake the iPhone maker, according to Honor Device Co.’s chief executive officer.

Honor Magic V2 phones.Source: Honor Device Co. (Bloomberg)

The absence of a foldable phone in Apple Inc.'s portfolio is creating an opening for rivals to overtake the iPhone maker, according to Honor Device Co.'s chief executive officer.

The Shenzhen-based firm on Wednesday rolled out its latest foldable device, the Magic V2, which measures less than 10mm thick. The phone has a regular glass display comparable to the iPhone 14 Pro on its exterior and a 7.92-inch foldable OLED screen on the inside.

The Magic V2 starts at 8,999 yuan ($1,254.5) in China, the same price as the iPhone 14 Pro Max.

“The product has only one targeted competitor — Apple's topmost flagship phones,” Honor CEO George Zhao said in an interview ahead of the unveiling. “As strong as Apple is, it can't fulfill all demands from consumers.”

Honor, once a sub-brand of Huawei Technologies Co., spun off from the telecom equipment provider in late 2020 after US sanctions choked off Huawei's access to advanced chips. As an independent entity, Honor is not subject to the same curbs, and the Magic V2 is powered by Qualcomm Inc.'s latest Snapdragon 5G chipset.

The world's major Android phone brands, from Samsung Electronics Co. to Xiaomi Corp., have all introduced a variety of foldable models, leaving Apple the only top vendor without such an offering.

Foldables took only a fraction of global smartphone shipments last year, but the potential is growing. Their larger screens are a selling point to help Android manufacturers ask higher prices and increase their typically paper-thin margins. More than 21 million foldable phones will be shipped this year and the category is on track to more than double by 2027, research firm IDC estimated.

“Similar to the rise of electric cars, foldables have created a new arena in the smartphone industry,” Zhao said. Chinese smartphone consumers have long prioritized higher specifications and larger displays when making their purchase decision. Apple's iPhone is one of the top-selling devices in the country, though the market is competitive enough for the leader in sales to change regularly.

Honor was the only major brand that grew shipments in Covid-stricken China last year, defying a double-digit slump that delivered a decade low for the market. Smartphone makers are facing an even fiercer fight in 2023 as the cooling economy suppresses demand.

The company is mulling plans to sell the Magic V2 in overseas markets as well as in China, and Europe will be a key part of its expansion this year, said Zhao.