A month prior, deep inside Huawei's executive offices, significant discussions were underway.
Yu Dazui, head of Huawei's consumer division, had just wrapped up a strategic review. The company's latest flagship had performed decently—even though its Kirin chip was falling behind international competitors.
Still, it sold well.
But that wasn't what bothered him.
What rattled the department wasn't Apple or Samsung—it was Xiaomi.
Back in October, Xiaomi partnered with Q-Zone to release a 799 yuan ($110) phone. It shattered pricing expectations and threatened to eliminate counterfeit brands by dominating the sub-¥1,000 market.
Within just a few months, the model racked up 4 million units sold, relying solely on online sales and hunger marketing.
It was a statement to the entire industry:
"Budget phones are a goldmine. And Xiaomi owns the map."
That success forced every domestic phone brand to rethink their strategy.
Even Huawei—who prided itself on flagship products—couldn't ignore it.
Yu Dazui realized:
"Xiaomi isn't just growing fast—it's setting the standard for the online market."
Huawei had three major series:
P Series – premium flagship
Mate Series – high-end enterprise flagship
Honor Series – budget/mid-range, usually tied to carrier promotions
Among them, Honor was the only brand with flexibility.
It lacked brand baggage.
It didn't have a strong identity in the public's mind.
Which made it the perfect candidate to pivot.
Yu made a bold proposal:
Spin off the Honor brand.
The idea?
Let Huawei focus on high-end offline retail
Let Honor become an independent, online-first, internet-native brand
A dual-brand strategy—mirroring Xiaomi vs Redmi
Except this time, Huawei and Honor would play both sides of the game
He launched internal discussions and quickly gained momentum.
The goal:
Beat Xiaomi at their own game.
He cited China Star Tech as another significant threat.
Their approach was direct—no middlemen, no hype.
Just brute-force disruption through raw tech strength.
Xiaomi has the marketing edge, an e-commerce model, and explosive growth.
"If we don't act now, we'll lose the next generation of buyers," he warned.
The Honor brand, once seen as a support line, had become Huawei's most shipped product series.
But now?
It would be the company's first line of defense.
After an intense back-and-forth, Yu presented his entire plan.
"Let Honor go independent.
Let it carry the fight in the online arena.
Let Huawei remain elite and premium."
Mr. Ren, the head of Huawei, sat quietly after reading the report.
He didn't immediately approve. He hesitated.
"It's not enough to say Honor should be independent.
It needs to prove itself in the wild.
If it fails… it comes home."
And with that, the decision was made:
Honor would go independent.
But it would need to fight—and win—to stay that way.