China Mobile plans to enter the promising smartphone market
China Mobile has acquired a stake in Honor Device, which was previously part of Huawei. The latter spun off into a separate business four years ago. The deal speaks to the potential of the emerging smartphone brand and the positive trends in the sector as a whole.
The mobile operator is the parent company of China’s largest mobile operator. Its investment in Honor suggests a new strategy from a buyer focused on a promising market. The brand itself is the fourth largest in the country in terms of device shipments.
In 2020, Honor became a fully independent company, separating itself from Huawei Corporation. This allowed the company to avoid US sanctions, which Huawei did not.
Bloomberg analysts note that the deal between the parties is significant for China’s financial market. The country is beginning to recover from the currency restrictions and the collapse of the real estate sector. The acquisition of the manufacturer is a significant incentive for other companies. It is also a major deal for China Mobile. Chinese operators have seen a decline in revenue from mobile users. Analysts also say that demand for digital services is declining. To retain the market, the company wants to expand its reach and has chosen the promising mobile device business.
China Mobile company overview
China Mobile is one of the leading telecommunications companies in China. It also ranks first in terms of mobile subscribers. As of 2023, its users totalled nearly 979 million.
The company has been in business since 1997. Before that, it was a subsidiary of the state monopoly China Telecom. The main stages of development:
– the company went public on the New York and Hong Kong stock exchanges in 1997;
– China Mobile received its current name in 2000;
– between 1998 and 2004, the company acquired a number of assets from China Telecom, expanding its presence to all regions of the country;
– China Resources Peoples Telephone became part of the company in 2006.
China Mobile pays particular attention to innovation, which helps the company maintain its market leadership. In 2008, the company began testing 3G mobile networks covering eight major Chinese cities. Today, the operator continues to expand its infrastructure, but now for the new 5G communications standard.
Another major milestone for the company was its agreement with Apple Corporation in 2013. This allowed it to become the official operator of the American brand’s mobile devices. China Mobile provided communication services to users of the iPhone 5 and 6 series. Given the popularity of smartphones, the deal was highly profitable for the Chinese company.
