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Text | Yang Xiaohe
Source: Tech Planet (ID: tech618)
The smartphone industry may be experiencing a very lively appearance, but it is actually the coldest cycle.
According to statistics, just after half a year of this year, major manufacturers have launched 7 folding screens, which generally exceed 10,000 yuan a year ago. The price has been swooping all the way, but the price of each high-end machine has been rising. The price of Xiaomi 12U has reached 6,999 yuan. It is reported that Huawei’s upcoming Mate 50 will be priced at 8,999 yuan.
In the cheers of “fighting against Apple, high-end has become” on the Internet, what is the real market situation of each mobile phone, what is the shipment volume of each brand store, and what is the mainstream consumer price range, it seems that everyone does not know. willing to face the problem.
During Tech Planet’s visits to various smartphone brand stores, the store owner did not shy away from saying that the market sales of Honor Magic4, OPPO Find X5, vivo X80, and Xiaomi Mi 12 are not so ideal, “No high-end phones can sell 10 units a month. , we don’t dare to take the goods.” An OPPO store owner told Tech Planet that except for Huawei, this wave of high-end machines has not really stood up, and the price of everyone’s main shipments is more than 2,000 yuan.
Even from the perspective of the industry, the Glory brand, which has risen from fifth in sales to the first in the domestic market, is more of a channel expansion, and the performance of retail terminals is not so good. A glory retail store owner told Tech Planet that he lost 20,000 yuan a month.
The data is also verifying that the poor sales of various brand stores are not an isolated phenomenon. According to data recently released by the China Academy of Information and Communications Technology, China’s smartphone shipments in the first half of this year decreased by 21.7% year-on-year to 134 million units. Consultancy firm Conast said in a report that it expects shipments for the whole of this year to be significantly below 300 million units, the worst performance since 2012. This means that China’s mobile phone shipments may fall to the lowest level in 10 years.
Xiaomi’s financial report released on August 20 also confirmed this trend. In the second quarter, Xiaomi’s smartphone shipments decreased by 26.2% year-on-year to 39.1 million units, and smartphone revenue decreased by 28.5% year-on-year to 42.3 billion yuan. Although OPPO, vivo and Honor are not listed, and the financial report data has not been released, the cold winter of the smartphone industry should be felt by everyone.
Why can’t young people buy mobile phones?
In a fifth-tier city in the north, Li Ming’s Honor mobile phone store is located at the end of a commercial street. From earning 400,000 yuan in 2020 to losing 20,000 yuan per month this year, Li Ming felt the market change.
In 2020, he and a few friends opened a Huawei store. Although Huawei was already affected by US sanctions at that time, this year was the most profitable time for Li Ming, because everyone thought that Huawei Mate 40 may be the “last generation machine king”, so They are all rushing to buy, which also causes the phenomenon that one machine is hard to find.
“My brother asked me to buy a Mate 40, and I sold it to him at the original price. In fact, I sold it to others at a price increase of more than 1,000.” Li Ming told Tech Planet that at that time he did not want acquaintances to buy from him, so that he would make less money. a lot of money.
In the past two years, none of them has released any classic models, and the high-end models have not reached the reputation of Huawei Mate 40. And from 2021, Huawei’s mobile phones are all 4G, and the price is quite expensive, and it is already uncompetitive. Honor took many technologies from Huawei and could use the latest 5G chips, which also gave Li Ming the idea of transferring to the Honor camp.
“To be honest, we don’t have as much information as the first-tier cities. In this respect, everyone still thinks that Honor and Huawei are one family, and we will not take the initiative to explain.” There are some factors, such as the Honor 70 and other mid-range products sell well. The mobile phone Li Ming can earn 14 points and is the main model of his own revenue.
In fact, the price of 2000-3000 yuan where the Honor 70 is located is also the core area of domestic mobile phone competition. OPPO’s Reno series, vivo’s S series, and Xiaomi’s Redmi series are basically in this area. There is not much difference in the configuration of smartphones at this price, but it is the place with the most routines.
Zhang Qiang, an OPPO dealer in Guilin, Guangxi, told Tech Planet that OPPO has released a lot of models this year, but many of them are nesting dolls. The nesting doll machine is the core configuration of different models is similar, change the shape, set a new model, and then introduce the model to the market.
The reason why it is not iteration, but nesting dolls, the direct reason should be that companies want to destock. Once a mobile phone manufacturer has too many spare parts and the mobile phone cannot be sold, it will usually launch a new model in a “doll”.
The K10 Pro launched by OPPO this year is suspected of being a nesting doll realme GT2, and the realme gt neo3 is suspected of being a nesting doll OnePlus Ace. After all, OPPO, OnePlus, and Realme all belong to the Oga Group. Distributor Zhang Qiang told Tech Planet that consumers are not stupid now, and gradually they know about the nesting doll machine. It is a mobile phone that comes and goes, and it is common sense that it cannot be sold.
Of course, the complexity of mobile phone models is also beneficial. After the frequent introduction of new phones, many offline consumers will not go to the Internet to compare prices, which also allows everyone to sell at high prices. An OPPO mobile phone product quotation table obtained by Tech Planet shows that the gross profit margin of OPPO’s folding screen Find N is 500 yuan, while the gross profit of the mid-end product Reno can reach 500 yuan.
This has also led to the price of many mid-range models going straight to 3,000 yuan, making many consumers feel that it is better to add some money to buy the iPhone 12. As for why he didn’t add some money to buy a domestic high-end phone, Li Ming told Tech Planet that the sales of Honor magic 4 in Inner Mongolia, where he is located, are about 3,000 units a month. These sales are evenly distributed to each store, which is actually a difficult product to sell.
Compared with several high-end phones from OV and Xiaomi, the vivo X80 is a model with a slightly better market acceptance. Li Ming believes that the good point is also the difference between the inside and the outside of the wall. The vivo X80 has a self-developed image chip, but it cannot bring Apple’s A-series chips have such obvious advantages. However, it did not bring a fundamental impact, but it gave him confidence in the price. The high-end version has reached a high of 6699 yuan.
These factors are the reasons for the slump in the sales of the entire mobile phone industry. Young people do not see the factor of impulse buying, but are discouraged by high prices and routines. Anyway, the performance of smart phones is already excessive, and there are more “waiting parties”.
Distributor’s internal friction
Young people do not buy mobile phones, which is one of the reasons why retailers do not make money. Another reason is internal friction in the system, which is also increasing and diluting the profits of each brand store.
At the beginning of this year, in the small town where Li Ming is located, Huawei forced retail stores to stand in line, and many Huawei Honor stores were asked to make choices. This not only lost Huawei’s influence, but also made Honor’s management more strict.
In the Glory system, Li Ming’s store is of a small size, and has no advantage in supply. “Big experience stores and retailers make money, and we can only lose money.” Now Li Ming can only hold on, hoping that the situation will improve tomorrow.
Although OV’s dealer system is relatively mature, there is no similar entanglement between Huawei and Honor, but the situation of OV channels is too complicated, and it is becoming more and more unsuitable for the development trend of the smartphone industry. OV is also aware of this, so the distribution channels are also making deep changes. Learning from the direct sales system of Huawei and Honor Guodai and Provincial Generation, OV is also cancelling the “second generation” (secondary agency).
Multi-level agents are helpful for pushing goods, one-level pressing, and inventory is not in the hands of manufacturers. The disadvantage is that they lack control over prices. Therefore, in the process of gradually canceling the “second generation” of OV, the key thing is the retail price.
A vivo dealer hit the gun and sold a vivo mobile phone at a low price, but was fined 15,000 yuan by vivo. This made him very angry. Many vivo stores often sold mobile phones at a premium. vivo turned a blind eye and was fined for selling it at a low price.
As far as he knows, Xiaomi is focusing on both premium and low prices, and only at Xiaomi Home and authorized stores, which is relatively reasonable. The fact that other companies focus on low-price sales is actually to maintain the profits of channel dealers. “The three major factories of blue-green chrysanthemum are based on channel interests, supplemented by consumer interests.”
This is also the status quo of the entire domestic market. The distribution channels are more complicated, and it is difficult to learn the essence of Apple stores. Although Xiaomi is trying hard to learn from Apple and open Xiaomi’s home stores in every town, the profit point of its smartphones is too low, and the asset-heavy model will definitely be a burden in the short term.
Zhang Qiang, a dealer in Guilin, is also paying attention to these channel changes. OPPO has been the No. 1 brand in the local market for the past two years, and this position is no longer guaranteed. Both Honor and Xiaomi’s directly-operated stores are rapidly entering. After there is no “second generation”, whether OPPO’s distribution system is stronger or weaker is unknown.
The drastic changes at both ends of consumers and channels have made the living environment of these stores generally poor, and even “ten stores and nine losses”. Zhang Qiang told Tech Planet that the owner of a vivo store next to him quit this year. According to Zhang Qiang’s analysis of the reason for the store closure, it may be that OV used to play the game in the sea of machines and smashed advertising fees. In 2021, vivo will greatly simplify the product line and reposition the X series, S series and Y series from high to bottom.
The increasingly clear positioning has also made the stores that used to rely on premium sales to have less oil and water than before. In addition, this year is not good, and they will definitely be closed if they do not make money.
Find a breakthrough in business
For the mobile phone stores of various brands, the first half of the year was not good, and the second half may be even more cruel.
Because Apple is about to release the iPhone 14 in September, the domestic high-end machines currently have no advantage over the iPhone 13. In the face of the upcoming 13 and the newly released 14, the trend of consumer choice may be more obvious.
Of course, manufacturers and brand shop owners can’t sit still and are looking for a breakthrough in their business.
For example, Xiaomi takes a differentiated competition route in its products. The Xiaomi 12S Ultra, which was just released a month ago, has a protruding camera module, which makes its camera capabilities very prominent, and some camera scenes are better than Apple and Samsung flagships.
This mobile phone is not the main offline sales force, but a Xiaomi clerk told Tech Planet, “Although consumers may not buy this mobile phone, it can enhance the brand image and make everyone have a high-end perception of the Xiaomi brand.” In the past, Xiaomi has always been Trapped in the cost-effective label, this phone is directly priced at 5,999 yuan. Whether it can help Xiaomi’s sales in the second half of the year is worthy of attention.
Of course, there are also some self-rescue methods, which are to sell smartphones to the secondary market. There are companies that specialize in receiving Huawei Honor, and after receiving the goods from the dealers, they distribute them to the e-commerce platform. A sales chain with reverse circulation, although not directly flowing to consumers, has delayed the anxiety of many bosses.
Tech Planet has obtained a Huawei Honor receipt price list. The receipt price of Huawei Mate40 is 6,650 yuan, which is much lower than the market retail price. However, it is also profitable to buy a lot of units at a time.
On the other hand, store owners of various brands are increasing the sales of IoT products. According to the product quotations obtained by Tech Planet, the gross profit of OPPO store owners selling a smart TV is about 1,000 yuan, and the gross profit of each Pad is three. Four hundred yuan, the gross profit of the smart hand is also about three or four hundred yuan.
The gross profit of these products is not lower than that of mobile phones, and the version with more memory makes more money. The importance of IoT can also be seen from Xiaomi’s financial report. Although Xiaomi’s smartphone shipments fell by 26%, in the second quarter, Xiaomi’s revenue from IoT and consumer products was 19.8 billion yuan, an increase of 1.7% from the previous quarter.
From this point of view, the owner of the vivo store will be a little sad, because the IoT device of vivo is the one with the worst layout among the top 5 smartphone manufacturers. OPPO is a basic IoT device category, and more in-depth players such as Xiaomi and Honor have already laid out daily necessities such as laptops and refrigerators.
In the current market, the frequency of changing mobile phones is decreasing, but the wave of changing smart home appliances is on the rise. Zhang Qiang plans to focus on the layout of peripheral products this year. Regarding the sales of OPPO’s mobile phones in the store in the second half of the year, he has already planned to lay flat.
Of course, the core of reversing the situation is that manufacturers hurry up to release mobile phones. Li Ming told Tech Planet that the Honor Magic 5 won’t be released until November, which is too slow for shopkeepers in the market. Zhang Qiang also mentioned that OPPO’s Find X3 and Find X5 are not successful, and there is no news about the next generation, which is also worrying.
Full screen, self-developed chips, and improved video capabilities are the main points for the next generation of domestic flagship functions to boost the market. If there is no subversive innovation, the later the flagship machine is released, the situation that each store owner will face will be: more and more lost young people, and losses that are about to be unbearable.
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