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Huawei's $200 Honor 7X is the future of the smartphone industry

Within a few years, vertical integration by Chinese mega manufacturers will drive the price of flagship-class Android phones down to commodity levels.

How much should a multi-core, dual rear-camera, Full HD+, drop-hardened, water-resistant, 32GB dual-SIM, microSD-capable Android smartphone with an integrated fingerprint sensor really cost?

$800? $600? $400? Try $200.

It sounds ridiculous but it's true.

Over the holiday week, I have been playing with Huawei's Honor 7X. The Chinese giant just started selling it in the North American market over the last few weeks and will be introducing it in other regions, such as South America, in a big way in 2018.

honor7x.jpg
Image: Huawei

It features Huawei's homegrown multi-core HiSilicon 659 SoC, a Full HD+ edge to edge display and twin rear cameras. It has a 3340mAh battery that will last all day.

It looks and feels a lot like a super-premium device -- because it is built like one.

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It is a tough, attractive little phone that you should not be afraid to gift to even the most careless screen-smashing Gen-Y teenager in your household, and they shouldn't be ashamed to sport it in front of their judgmental friends with much more expensive devices either.

You can drop it onto concrete from six feet all day long and the worst you'll likely damage it if you aren't using a cheap, thin rubber skin type-case to cover it is scuff the paint.

I'm not kidding. I've flung this thing across a ballroom floor and thrown it repeatedly onto the Italian tiles in my house and patio pavers without damaging it.

The phone also has an IP67 rating for water and dust resistance. I've even soaked it in my jacuzzi with no ill results after drying it off.

If you're looking for a great fleet phone for your kids, a global travel device, or if you are a vendor with a mobile business with a credit card strip reader and are afraid of wrecking an expensive phone in the field (food truck, rideshare driver, etc) this is it.

Every smartphone should be built this tough for the kind of money we pay for these things. Seriously.

How did they get the price of a phone with these kinds of premium specs down so much?

The answer is vertical integration -- complete ownership of the supply chain and not having to license anything to put the entire Bill of Materials (BoM) for this device together.

Well, they had to license the ARM architecture and I believe the design for the graphics cores. But that's pretty much it.

Huawei is fairly unique among Chinese mega manufacturers because it owns a lot of its own IP it puts into its products.

By having its own SoC design it doesn't have to buy chips on the open market from other silicon fabs, like TSMC or Samsung, both of which are ARM architecture licensees and are manufacturers of the Qualcomm Snapdragon series of chips that are present in just about every major brand of Android smartphone we see released in North America.

Samsung does produce its own chip for global use, the Exynos, but so far has not chosen to use it in North American Galaxy S designs due to the need to have comprehensive carrier support which includes Verizon and Sprint -- both which have a wireless infrastructure that uses Qualcomm's CDMA technology.

For the same reason, Huawei's phones don't work well on those two carriers. It has no licensed Qualcomm CDMA technology in it.

The US version of the Honor 7X also lacks a bunch of other features you might expect in more expensive handsets, such as 5Ghz 802.11ac Wi-Fi, NFC, wireless charging and it also still uses the legacy USB Micro-B connector and cannot fast charge. The device SKU sold in the US has 3GB of RAM instead of the standard 4GB or 6GB you typically see in most devices.

The cameras, while perfectly adequate for most general and selfie photography, are also not at the same quality level you'd expect on Samsung Galaxy or a Pixel.

But hey, this is a $200 phone. Not a $600 phone. The big brother of this phone, the Honor V10 has a lot more premium stuff and the price of it in Europe is currently around 500 EUR (approximately $595).

The price for the Honor V10 in the US hasn't been set yet, but I'm looking forward to seeing it make its debut here because it features a lot of interesting AI technologies. The Kirin 970 it uses -- introduced with the flagship Huawei Mate 10 Pro -- has pretty impressive specs.

If you look at the progress Huawei has made in the last two years with their Honor brand it has been nothing short of astounding. They've taken features and tech they've introduced with their more superpremium stuff -- such as the P9 and P10 devices for the domestic Chinese market -- and scaled manufacturing of the components out to get prices down to levels where basically anyone can afford one.

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So next year's $200 Honor 8X will probably be a lot like this year's V10.

Yes, Qualcomm's highest-end Snapdragon chips are a bit faster than the highest-end HiSilicon Kirin stuff using the raw geek benchmarks. But it doesn't really matter because the types of Android apps most users typically run on their phones don't take advantage of all that extra mobile processing power. Android is memory bound, for the most part, not CPU bound.

In real-world use cases, the Kirin SoC family performs just fine. Far better than just adequately. And Huawei's chips are definitely catching up to both Qualcomm and Samsung in overall technology features. Rapidly.

I would characterize Huawei's progress in the high-performance SoC and smartphone space analogous to how Hyundai's Genesis luxury car brand has competed with its Japanese high-end counterparts like Lexus, Acura, and Infiniti over the last five years.

For the price, technology, and engineering it's very hard to beat that car in the class it is competing in.

The Japanese luxury car brands have superior brand recognition and snob appeal today, much like Samsung, LG, HTC, Motorola and Google Pixel all do with Android smartphones. But that is all changing.

When I finish paying my car off in a few years, unless I decide to look at an EV, I will probably have to consider a Genesis unless Nissan gives me a repeat performance of the no-brainer zero percent financing that I got for a maxed-out leftover 2016 Infiniti Q50 last year.

The Infiniti is a very nice car; it's a great brand. I have few complaints after buying it and is probably the best car I have ever owned.

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But the Genesis is a lot of value for the money, has a great warranty, and I'd be stupid to let my own snob appeal biases prevent me from buying one. I would save a lot of money by buying a cheaper car with effectively no shortcomings compared to what I currently drive.

As consumers we are going to have to make those very same value calculations about the smartphones we buy -- do we care about snob appeal and brands, or do we care about price and functionality? Can we even justify the price of those other brands when Android devices are becoming so highly commoditized?

Should these phones really only cost $200 or $300 instead of $600... or $1000? I think so. The reality is that if Huawei is driving the cost down of its phones, we are going to see that trend all over the industry.

That's cheap enough that many people -- not just the fanatics -- might just upgrade every year. That being said I think they shouldn't be considered landfill material after two years, either.

Is the smartphone industry headed towards a race to the bottom on device prices driven by massive Chinese companies that have vertical integration of their own supply chains? Talk Back and Let Me Know.