Honor launches AI phone tools that help users get online shopping discounts

BEIJING — Imagine if Amazon gave 20% discounts for every purchase made using an iPhone Air.

That’s essentially how Chinese smartphone company Honor wants to attract local buyers — by giving them an on-device AI tool that lets them quickly compare deals across Chinese e-commerce sites, including JD.com and different merchants on Alibaba‘s Taobao. In one example seen by CNBC, the Honor AI-powered shopping search helped save 20% since the tool was able to find coupons that a user might otherwise overlook.

The features and a slew of other AI functions are set to roll out Wednesday on Honor’s newly launched Magic8 smartphone as well as the company’s other devices in China. The timing is notable. China is entering its busiest shopping season of the year akin to Black Friday: the Nov. 11 Singles Day promotional period.

With the AI upgrade, Honor expects to climb into the top three smartphone brands by market share in mainland China by the end of this year, Fei Fang, president of products at Honor Device, told CNBC in an exclusive interview. That’s according to a CNBC translation of the remarks made in Mandarin.

In the future, she expects that rather than opening smartphone apps directly, users will increasingly access the functions via an AI portal — which can then automatically provide customized services down the road.

“We believe this will happen and we are working along this direction,” she said, noting Honor will release more AI features in sports, health and companionship at its own ecosystem conference on Oct. 23.

Honor’s AI features are activated through the company’s “Yoyo” chatbot, which sits inside the company’s Android-based operating system called MagicOS.

While Honor said the overseas market has come to account for about half of its revenue, the Shenzhen-based company must first take on Apple to recover the first spot in China.

In the second quarter of this year, Huawei and Vivo shipped the most phones in China with 18% market share each, while Oppo and Xiaomi vied for second place at 16% share each, Counterpoint data showed. Apple had 15%, followed by Honor at 13%.

Apple has tried to make a comeback in China this year. CEO Tim Cook visited Shanghai this week, according to his social media account, coinciding with news that the slim iPhone Air would finally begin sales in China this month — weeks after the new iPhone 17 hit stores.

However, the U.S. smartphone giant has yet to release its AI features in China, despite Alibaba Group Chair Joe Tsai’s announcement this year that the company would work with Apple on the tech tools. Neither side has yet released additional details.

Honor, which spun off from Huawei in 2020, signed a strategic partnership with Alibaba in September to co-develop AI smartphone features. Alibaba operates the Gaode maps app in…