Honor's Bold Bet on AI and Internal Overhaul Under New CEO as Smartphone Sal...

AsianFin — Since taking the helm earlier this year, Honor's new CEO Li Jian has wasted no time in pushing bold reforms across the smartphone maker, shaking up management, revamping strategic focus, and laying the groundwork for a future IPO—all while battling sliding sales and Huawei's resurgent dominance in the domestic market.

At Mobile World Congress 2025, Li made his public debut with a sweeping announcement: Honor would pivot from being a smartphone manufacturer to an AI terminal ecosystem company. Dubbed the "Alpha Strategy," the vision is backed by a $10 billion commitment over five years to build AI capabilities and position Honor at the frontier of intelligent devices and embodied AI.

But the strategic ambition is not limited to press releases.

On May 13, Honor conducted a sweeping reshuffle of its China business unit. In an unprecedented move for the smartphone industry, the company held internal live-streams of its "reapplying for positions" process across 38 key supervisory roles. The high-stakes reshuffle resulted in new appointments for nearly half the positions—17 in total—highlighting a performance-first, merit-based approach. Notably, nearly 50% of the newly appointed leaders were born in the 1990s.

Honor confirmed the process to TMTPost, signaling a clear message: transformation starts from within.

The internal competition reflects both Li's no-nonsense management style and the company's need to halt its sharp decline in smartphone sales.

Li, a Huawei veteran since 2001 and former board member with extensive experience in strategy and global operations, stepped into the CEO role in January 2025, succeeding long-time leader Zhao Ming. Before taking the top job, Li served as Honor's vice chairman and head of HR, playing a key role in its post-Huawei restructuring.

His assertive leadership is already on full display. The live-streamed reshuffle marks a new level of transparency and urgency at Honor as it seeks to reinvigorate its corporate culture and brace for intensifying market pressures—particularly from Huawei.

According to Counterpoint, Honor fell to sixth place in China's smartphone market in Q1 2025 with a 13.7% share, down from first place a year prior. Shipments plunged 12.8% year-over-year. In contrast, Huawei has staged a powerful comeback, recording three straight quarters of market-leading growth, with a steady 17% market share in Q4 2024.

While former CEO Zhao had maintained that Huawei's return brought "vitality and competition," the numbers suggest otherwise. Honor has ceded ground quarter after quarter.

Analysts now view Li's personnel reforms as a pre-battle drill—a preparatory move for the bruising fight ahead in China's fiercely contested smartphone market.

Alongside the internal overhaul, Li is betting big on artificial intelligence.

Under the Alpha Strategy, Honor aims to evolve through three phases: first, creating truly intelligent smartphones in collaboration with partners; second, co-developing AI ecosystems that stretch across industries; and third, paving the way toward artificial general intelligence (AGI) as part of a broader vision for human-tech coexistence.

Honor is also hiring aggressively for roles like Robot Data Generation Algorithm Engineer and Robot Power System Simulation Engineer—clear indicators of its push into AI-powered hardware.

Behind these moves lies a not-so-hidden motive: positioning for an IPO.

Honor completed a shareholding restructuring in late 2024, changing its name to Honor Terminal Co., Ltd. and drawing in 23 stakeholders from across China's tech and telecom ecosystem. These include players from the smartphone supply chain, telecom operators, and state-owned enterprises—forming a robust capital base.

The company has stated that the restructuring lays the foundation for a public listing. While no IPO timeline has been announced, analysts believe it's only "a step away."

The crucial factor now? Sales. Honor's success in Q2 2025 could determine how it's valued by capital markets.

As the company juggles aggressive internal reforms, a high-stakes AI strategy, and a looming IPO, all eyes will be on whether Li's transformation plan can deliver a turnaround—and whether Honor can regain its standing in a smartphone market it once led.