Pictured here is the Grand Indonesia shopping center in Jakarta on Friday, January 5, 2024.
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BEIJING – Huawei spinoff Honor said Tuesday it plans to launch smartphone sales in Indonesia in late March, becoming the latest Chinese company to enter a market that has banned Apple’s iPhone 16 above domestic production needs.
Indonesia requires that for smartphones sold in the country, 40% of their components must come from their own country. That rule has stopped Apple from selling its latest phone in the marketplace, wherever it reportedly is negotiating a $1 billion investment.
Honor has an office in Indonesia and is working with a local manufacturing partner, Justin Li, president of the Chinese company’s South Pacific business, told reporters last week. He said a foldable phone will be among Honor’s first batch of locally sold products – 10 items in the mid- to high-end segment.
The company plans to offer about 30 products, from phones to tablets, in Indonesia by the end of the year. The Southeast Asian country is home to the world the fourth largest country in terms of populationright behind the United States.
“Although 80% of the market is dominated by devices priced below $200, Indonesia, as Southeast Asia’s largest and fastest growing economy, offers enormous potential for long-term growth,” said Canalys analyst Chiew Le Xuan in an email.
“Indonesia is emerging as a key market in Southeast Asia, driven by rapid economic growth and a growing middle class,” Chiew said, noting that the country is responsible for 35% of the region’s smartphone shipments and can serve as a strategic regional hub.
As of November, Oppo, Xiaomi and Transsion – all based in China – were in Indonesia’s top three in smartphone shipments. according to Canalys. Shenzhen-based Oppo held its global launch of its flagship Find X8 phone in Indonesia, where the company also has a factory.
Samsung ranks fourth in Indonesia with a 16% share, on par with Vivo, another Chinese brand, Canalys data shows.
Excluding China and Japan, just under 8% of Apple’s revenue come from Asia-Pacific.
Li claimed that the decision to enter Indonesia was independent of Apple’s presence in the country, and expressed confidence in Honor’s ability to compete. He said Honor had been observing the Indonesian market for years before redoubling its expansion efforts in the past six months.
Although he declined to share a current breakdown of Indonesian and Chinese staff, Li said Honor is still hiring in the country and aims to have a predominantly local workforce in the future.
Honor plans to open at least 10 of its own stores in Indonesia this year, in addition to selling through a local retailer, Li said.
Outside of China, Honor mainly sells in Europe and parts of Southeast Asia. The phones are not sold directly in the US. The company claimed that in December, for the first time, more than half of its sales came from outside China.
Honor, which plans to go public, was spun off from Chinese telecommunications giant Huawei in November 2020 after its parent company was hit by US sanctions. Huawei said it has no assets shares in honor or involved in business decisions.