Why it matters: Chinese tech giant Honor is betting big on artificial intelligence with a $10 billion strategic pivot that aims to transform the smartphone maker into a global leader in AI-driven device ecosystems. The ambitious “HONOR ALPHA PLAN” signals consumer electronics companies racing to integrate AI into everyday devices.
The big picture
Honor CEO James Li unveils the company’s three-phase transformation strategy today at Mobile World Congress 2025 in Barcelona. The plan maps out Honor’s evolution from smartphone manufacturer to AI ecosystem developer.
The $10 billion investment over five years will fund R&D, partnerships, and infrastructure to support Honor’s AI ambitions.
Three-phase approach
The ALPHA PLAN outlines a progressive roadmap:
- Agentic AI Era: Development of intelligent smartphones with purpose-built AI capabilities
- Physical AI Era: Creation of an open, cross-device AI ecosystem
- AGI Era: Pursuit of artificial general intelligence
Key innovations
Honor’s flagship initiative includes “agentic AI smartphones” scheduled to launch later this year featuring:
- GUI-Based AI Agent: A personal assistant capable of executing complex tasks by interpreting on-screen elements and contextual data
- AiMAGE Imaging System: Combines on-device and cloud-based AI to enhance photo quality
- AI Deepfake Detection: Real-time analysis of video calls
Strategic partnerships
The company is building its AI infrastructure through collaborations with:
- Google Cloud: Integration of Gemini AI models
- Qualcomm: Co-development of AI-optimized chipsets
- Telecom Partners: Orange, Telefónica, and Vodafone supporting European deployment
Market challenges
Despite its ambitious vision, Honor faces significant challenges:
- Limited brand recognition in North America and Europe (2.3% market share outside China in 2024)
- Potential regulatory risks from U.S.-China tech tensions
- Questions about whether $10 billion is sufficient to compete with tech giants like Apple
Honor’s success will depend on execution speed and partner alignment as it attempts to lead the next generation of AI-powered devices.