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Text / Wu Xianzhi
Source/Photon Planet (ID: TMTweb)
“Whether the mobile phone will become the landline of the next era, we are also very confused now.”
A few days ago, a mobile phone parts supplier told Photon Planet that the situation this year is not very optimistic. On the one hand, the domestic mobile phone market is under pressure. On the other hand, in the past, whether it was seeking high-end breakthroughs or destocking overseas markets, now due to various unexpected factors, the situation has become more difficult.
Before the chill spreads to the supply chain, mobile phone manufacturers have long felt that the cold wind has arrived. Lei Jun, who was once high-spirited, now recalls bitter thoughts at the press conference. “If you carefully compare Lei Jun’s speeches from last year and this year, you can clearly feel anxiety.” An industry insider believes that it should be seen that Rongmi OV is facing a lot of pressure after its overseas market expansion has been blocked.
In the middle of last year, vivo launched a tablet at a strategic conference and announced that it would be a great company and a great product against Apple. At the annual meeting a few months later, Shen Wei’s speech only emphasized one sentence: survive.
Even the glory that has grown significantly in the past two years has felt the cold wind. According to data recently released by CINNO Research, Honor’s domestic mobile phone sales in September won the single-month champion, but it will also be affected by the market environment, and there has been a certain decline compared to the same period last year. Under this circumstance, most manufacturers have to take on the challenge, either tie the fence deep enough, or expand horizontally, or, like OPPO, end up building cores.
On the surface, whether it is the high-end vivo, OPPO, Xiaomi, or the glory that has just established a foothold, everyone is “horizontal” to varying degrees.
Forced to go “big and complete”
“The openness of Android’s underlying code means that everything is based on standardization. It is difficult for manufacturers to take the road of differentiation, and the chip further makes domestic mobile phone manufacturers fall into homogeneous competition from the hardware side.” A software engineer from vivo It is believed that the horizontal development of the Android camp is driven by helplessness.
In fact, the application development environments of the two camps of Apple and Android have gone to very different ends. For Apple, starting from the definition of the first-generation iPad and iPhone 4 based on the A4 chip, the chip design department led by Sloji will test the upstream and downstream industry circles to user groups in advance and polish the products. In addition, strict application audits force the downstream to pursue the ultimate.
The Android camp is to launch the operating system first, then make a virtual interface, and test it for the bottom layer. Different from Apple, the debugging among Google, chip manufacturers, and mobile phone manufacturers has made the entire application development environment diverse, which objectively leads to a mix of ecological fish.
An industry insider said, “WeChat may have to be optimized according to other people’s requirements in iOS development, but the Android camp can only let WeChat kill memory.”
In order to cope with the unfavorable factors, Rongmi OV mostly went to the road of horizontal expansion. For example, vivo moves from mobile phones to the core periphery, and its “horizontal growth” is currently mainly focused on “end-to-end”.
“Because the flagship X80 series is selling very well, the internal discussion is still on whether to add another flagship within this year. Boss Shen hopes to make persistent efforts, but many executives believe that the completion of the flagship product update within one year may lead to consumer dissatisfaction. “
According to people familiar with the matter, the NEX series has been temporarily hidden due to its lack of differentiated attributes. “However, I personally think that it should be restarted in the future, just like the China Cool Alliance, which will eventually be resurrected in the form of a sub-brand of iQOO.”
The glory that just walked the life and death line, from the core periphery to other smart devices, and then to the “full scene” ecology, is actually to solve the “hardware island” problem formed by the “horizontal growth” at the terminal level.
Photon Planet noticed that after Magic OS completes the collaboration between mobile phones and notebooks, there are indications that Honor also hopes to further expand to other categories, so as to break the hardware-scenario limitation and enable users to move freely between terminals.
OPPO’s horizontal growth is somewhat similar to Honor, trying to break the terminal boundary from the OS and even lower-level systems to more scenarios. At the 2022 OPPO Developer Conference, a new generation of Color OS, a car-machine integration system OPPO Carlink, and the self-developed cross-end system “Pantanar” were launched.
Unlike Honor, which focuses on user usage scenarios, Pantanal’s middleware attributes indicate that OPPO hopes to extend the ecology from the perspective of the versatility of multi-terminal OS. In addition, OPPO, from a certain point of view, also hopes to try to gain some voice in hardware in order to seek differentiation.
In fact, the earliest domestic mobile phone manufacturer to grow horizontally is Xiaomi. As of the first half of this year, Xiaomi’s IoT revenue reached 39.3 billion yuan, a slight increase of 1% year-on-year, and the Q2 gross profit margin also fell month-on-month. Therefore, we have seen that Xiaomi has neither clearly declared that it does not build cars like Rong OV, nor has it opened an “orphanage” like Huawei to attract second- and third-tier car companies to lead car manufacturing. Instead, it simply bought land, built a factory, and built it by itself. car.
In addition to changes in the market environment and the international environment, Xiaomi’s IoT and car building other than mobile phones are likely to come from “engineering” thinking. On the one hand, it is believed that the successful experience on the A device can be copied to the B device. On the other hand, most mobile phone manufacturers or many mobile phone parts suppliers have received inquiries from car companies.
A person in the mobile phone supply chain said, “Can you supply us? This is not too tempting for players who are still struggling in the mobile phone red sea.”
In terms of IoT, due to the “bamboo forest ecology” and the mobile phone × IoT strategy, Xiaomi “goes horizontally” through capital and channel sharing, and its form is closer to the self-operated e-commerce of OEM production and joint sales. This model is characterized by abundant SKUs and is prone to scale effects. The disadvantage is that the synergy between products is weak, and it is difficult to pull each other for a long time.
This point can be seen from the monthly activity of Xiao Ai and MIUI. Judging from the quarterly data in the past three years, mobile phones have not significantly driven the growth of smart speaker device users.
From the horizontal growth of Rongmi OV, we can clearly see two distinct paths. One is product expansion and capital incubation. The typical case is Xiaomi. The logic behind it is to acquire users through entry-level smart products, and then to market High-end and automobile expansion, and equity investment in entrepreneurial teams, providing brand and channel traction to obtain investment profits.
The other is Honor and OPPO, trying to build their own soft and hard ecology through cross-terminal systems. Although this method cannot completely solve the homogenization problem in the underlying logic of Android, it is a feasible path to provide different interactive experiences.
Narratives of the moment against anxiety
Behind the horizontal expansion of mobile phone manufacturers is the anxiety that cannot be concealed.
An industry insider believes that the two OVs have a more representative way of coping with anxiety. Vivo’s anxiety is relatively internalized, focusing on mobile phones and core categories, while OPPO expands new products, builds cores, and launches new car models, which is actually an “externalized” anxiety.
In fact, in the midst of anxiety, how to control the pace is obviously more worthy of attention. If it is said that in the incremental market during the popularization period of smart phones, mobile phone manufacturers can still rely on the wind to win by surprise, then in the stock market where performance is overflowing and differentiation is valued, it may be more important to keep the sunk cost than to be surprising.
For example, an Android manufacturer made a very cool animation effect this year in order to attract users, but it never wanted users to complain that the phone was hot. “Our boss was very dissatisfied with this OS version after hearing it.”
Not only is the rash design easy to overturn, but the rash supply chain strategy may also cause manufacturers to carry heavy inventory on their own backs.
At the beginning of last year, Huawei and Honor were in a crisis of supply cuts. A domestic mobile phone manufacturer chartered a plane to TSMC and grabbed hundreds of millions of chips. “Looking at the situation in overseas markets this year, it is conservatively estimated that the 100 million chips are still accumulating dust in the warehouse of this mobile phone manufacturer.”
An insider told Photon Planet that chip supply, the epidemic and the overseas situation are changing rapidly. Every manufacturer is trembling, and a wrong decision may lead to falling behind.
“If you have a sense of urgency, you will understand why OV says ‘dare to be the queen of the world’. It is also summed up because it rushed ahead and suffered losses.” A person from vivo mentioned that the two OVs once I have experienced the transition from feature phones to smart phones. At the beginning, I grabbed the raw materials and ended up rotten in my hands. I didn’t survive until I bet against the smart phone. The two experienced the pain of a major industry turnaround more than a decade ago.
One falls, the other is full. Glory quickly regained its combat effectiveness, partly due to the overturning of other manufacturers.
Since a mobile phone manufacturer grabbed too many chips in the first half of 2021 and encountered a decline in domestic sales, it was impossible to digest new chips in the short term. As a result, the Snapdragon 778G chip released on May 18 was cold. Under the superposition of two factors, Honor did not get the product until 45 days after the release of the 778G, and it was still able to turn around.
In addition, Honor pays more attention to chip tuning. “Snapdragon 8 and MTK (MediaTek), in the Android camp, Honor has better tuning.” This resonates with vivo to some extent. A person close to vivo told Photon Planet that Shen Wei’s idea is to focus and polish the product.
The above-mentioned person mentioned that the sales volume of vivo folding screen exceeded expectations this year, so it will strike while the iron is hot and release the new folding screen Fold X+ before the National Day.
South Asia and some underdeveloped regions seem to have low unit price per customer, but in fact, it is very important for mobile phone manufacturers, especially to destock and recover cash flow. However, this year, the major domestic mobile phone manufacturers suffered an “Indian robbery”, and the road to stockpiling and stopping losses was also blocked.
The current predicament of the mobile phone industry may not be as dead as some suppliers fear.
“Whether OPPO or vivo, the two bosses have expressed on different occasions that mobile phones are still a wide and full of ‘surprise’ track.” An industry insider said that one is that the increase in the folding screen market has an impact on the high-end brands of various brands. sizing pull.
Since neither OV is listed, its internal options are converted according to cash assets. It is understood that the current internal transaction price is still rising steadily. A number of OV employees said, “Just like living at home, (calling options is equivalent to) saving money. The more you save, the more shares you have, and the wealth will gradually accumulate.”
Xiaomi, on the other hand, not only needs to deal with the involution of the mobile phone industry, but also has to deal with the involution of the mobile phone industry, but also has to worry about the fluctuation of the secondary market. It is indeed a bigger challenge.
Compared with the pessimism of the supply chain, many people from the background of major mobile phone manufacturers are not so pessimistic. Most of them think that in the next ten years, it will be difficult to produce another product that can replace mobile phones. On the contrary, the imagination of mobile phones and other products can even make mobile phones more valuable. For example, the integration of car and mobile terminals may be accompanied by a new round of replacement. Tide; mobile phone + X is also easier to form multi-scene linkage.
“Suppliers feel that the mobile phone industry is not good. It may be with some kind of survivor bias. After all, the changes in the automotive industry in the past two years have been so great that they have overshadowed the scenery of mobile phones.”
Smartphones are not at the end of the game
In September, Apple released the new iPhone 14 series. After the digital series and Pro further subdivide the mid-range and high-end markets, the mediocre iPhone 14 may bring at least a whole year of differentiated development opportunities to Rongmi OV.
After all, the iPhone 14 Pro, which focuses on “optimization”, cannot unplug the “13 incense” users.
However, Apple sticks to Liu Haiping and intensifies the launch of the “Smart Island” design, which provides a revelation for Rongmi OV: in addition to pursuing hardware and appearance innovation, system optimization and adaptation should also be carried out around it. On the other hand, in the Android camp, various designs around the screen such as curved screen, full screen, water drop screen, and hole-digging screen, such as passing through the air, did not further settle into the system after the tuyere, and always stayed at the level of utensils.
From this perspective, before this year, the horizontal development of the Android camp actually encouraged Apple to “squeeze toothpaste”.
Right now, among Rongmi OVs, is Vivo hedgehog-style stable and conservative, able to cross the bulls and bears until spring; or OPPO and Honor, between hedgehogs and foxes, trying to correct the inherent “Android ecology” from the underlying logic. Homogenization” question; or, like millet, simply start anew, there is no conclusion yet.
What is clear is that smart phones still have huge opportunities in the multi-terminal era, and the tragedy of feature phones or landline phones may not be staged again, but there is a tendency to follow the footsteps of home computers – optimization is greater than innovation.
This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-10-08/doc-imqqsmrp1875473.shtml
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