Despite the slowdown in the China smartphone market, Huawei’s dual-brand HONOR has been performing well. After the release of a series of new models including HONOR 10, HONOR 9i, HONOR Play, HONOR Note 10, HONOR 8X, HONOR 8X Max, HONOR has released the second incarnation of its radical flagship, Magic 2. Counterpoint attended the launch in Beijing.

HONOR‘s evolution of Magic 2 focuses on the latest AI-capable specification with the addition of a functional slider and easier production. It will also likely generate more sales than the niche first generation.

Two years has passed since the launch of original HONOR Magic. The first generation product was one of the first AI-driven smartphones. It enabled a wide variety of smart functions in China, but suffered from immature design. The AI algorithms required a lot of power to run and the silicon architecture was not optimized for this.

Magic 2 is far more than a successor. It takes a comprehensive upgrade in both hardware and software. The new flagship is based on the latest Kirin 980 processor, running Android 9.0 plus the Magic UI 2.0 intelligent system. Equipped with a 6.39-inch magic slide full view AMOLED display (Res. 2340x1080) and an in-display fingerprint, triple rear camera (1x 24MP BW camera, 1x 16MP ultra wide-angle camera, 1x 16MP color camera), 16MP front camera and proprietary 3D structured light system, Magic 2 has specs on a par with premium flagship models like iPhone XS and Mate 20. It also features dual band GPS, up to 1.7Gbps Wi-Fi throughput, and 3500mAH battery.

HONOR‘s Evolution: Magic 2 YOYO. Building on the original set of smart services offered in the first generation Magic, Honor has integrated more and deeper smart services in its YOYO system. The downside is that the AI services are still only available in China.

As the name hints, Magic 2 carries several “black technologies”. The most eye-catching innovation is the intelligent engine YOYO, which evolved from Magic into a system that applies deep-learning techniques to deliver a well-functioning digital assistant. Scoring 4,556 points on its AI performance rating, YOYO features a wide array of AI capabilities: a self-intelligent voice assistant, professional translators, and consultants for healthcare, fitness, beauty care and shopping. Through extensive ecological cooperation and more than 450,000 developers, YOYO has been combined with thousands of applications and services for better user experiences. Competition in AI is shifting from simple hardware performance to the ability to build an AI application ecology, Magic 2 is leading the direction.

Other technical and engineering innovations include a five-track slide, 40W supercharge with triple protection, dual SIM, dual VoLTE, graphene heat dissipation technology, etc.

We tried the AI-powered camera function and YOYO at the launch. The 17mm wide-angle camera is great for landscape capture, and dynamic object recognition always optimizes settings, though this is a matter of taste.

HONOR‘s evolution: competitive strategy. Magic 2 will be direct competition for the OPPO R series and vivo X series. The standard Magic 2 comes with three options, i.e. 6GB+128GB, 8GB+128GB, 8GB+256GB, priced at 3799, 4299, and 4799 RMB respectively. Pre-orders started on Nov. 1^st. Besides, a premium version with 8GB+512GB, featuring graphene heat spreader and 3D bionic photosensitive technologies will be on sale in Dec. at the price of 5799 RMB. HONOR finally has a high-end model within the 500$+ price band, in response to the price rise of key competitors like Oppo and vivo.

HONOR‘s evolution: Honor’s Performance and Global Strategy

HONOR has had a strong year so far in 2018. Counterpoint expects annual shipments of HONOR smartphones to exceed 75 million units with overseas markets contributing around 26%. And while China shipments grew by a fifth. Overseas shipments more than doubled.

Singles’ Day is around the corner and HONOR has promised it will make a big promotion with its online and offline distributors, Counterpoint will be tracking sales and will see whether Honor and Magic 2 has enough magic to stir the market.

Exhibit: 2018 Honor Global Smartphone shipment share by region(estimate)