OPPO gets in the car, not the protagonist

Original link: https://www.latepost.com/news/dj_detail?id=1293

Compared to the boom in smart electric vehicles, the smartphone market lacks new stories.

In 2021, 1.35 billion mobile phones will still be sold globally, but that has long since ceased to grow. Data from research firm CINNO shows that in the second quarter of this year, China’s smartphone market hit its worst performance since 2015, with shipments falling by about 15% overall.

Among various self-rescue actions, switching to smart electric vehicles is the common choice of several mobile phone companies. Apple has been developing cars for many years, Xiaomi officially announced last year that it will invest 10 billion US dollars to build cars, and Huawei is deeply involved in car brands such as Celis and Avita as a “Super Tier 1 (first-tier supplier)”.

OPPO, which is also under the downward pressure of the mobile phone market, has been rumored to build cars many times in the past two years, but it chose another way of “getting on the car”.

At the OPPO Developers Conference held on August 30, OPPO released the Pantanal Smart Cross-Terminal System, which is a middleware between the operating system and the software layer, which is equivalent to different devices and operating systems. Building a bridge between them can help developers adapt applications on different terminals such as mobile phones, cars, and tablets, and provide cross-device service experience.

The car is the key scene of the Pantanal. Last week, OPPO announced the establishment of an “Ecological Domain Joint Laboratory” with SAIC and SAIC’s software system subsidiary SAIC Zero Bundle. This year and next year, the OPPO Carlink solution, the core application of Pantanal in the field of automobiles, will be gradually implemented on SAIC Viva R7 and other models.

This action is similar to Apple’s launch of CarPlay, but with a lower stance: Pantanal, as a middleware, will not bypass car companies, and key operating instructions and data are still in the hands of car companies.

The Pantanal is the world’s largest wetland in South America and the most dense ecosystem of flora and fauna in the world. OPPO Vice President Wu Henggang told LatePost that OPPO chose this name in the hope that this software ecosystem would be inclusive and diverse enough to attract more partners. OPPO does not seek to be the protagonist in this ecosystem.

the third way

An OPPO source told LatePost that OPPO founder and CEO Chen Mingyong visited some car companies with a group of executives in the first half of last year. Chen Mingyong wants to know what is going on in the hot smart electric vehicle market and whether there is a chance for OPPO.

After a visit, Chen Mingyong made an internal statement at the end of last year: he will not build cars for the time being. He said that OPPO will build a car only when the existing players can’t build a car in the next ten years. He has not yet seen the advantages of OPPO’s car-making.

The above-mentioned OPPO person explained that OPPO hopes to find a “long slope and thick snow” when choosing a track – a long slope means that the industry cycle must be long enough, and thick snow means there must be enough profit space. The auto industry is a “long slope”, but OPPO believes that with its current capabilities, it is still unable to earn “thick snow” by building cars.

However, OPPO has not given up on entering the car scene. It chose to rely on the main business of mobile phones to cooperate with car companies, and released the car-machine interconnection solution as part of Pantanal last week.

In the function demonstration shown by OPPO, when the mobile phone and the car device are connected through OPPO CarLink, the mobile app will directly enter the car device menu. When receiving a video call, the user swipes up on the phone to answer the interface, and the call will automatically stream to the co-pilot’s large screen to continue playing. When a user receives an address through a text message, such as an appointment confirmation message from a restaurant, just long-press the text on the phone, and the address information will automatically enter the car-navigation system. According to “LatePost”, OPPO is also adapting this function with WeChat.


Figure: Swipe up on the screen, users can transfer the video call from the mobile phone to the car screen for playback, and the rear passengers can also join the call through the in-car camera.

This interconnection solution can also mobilize other in-vehicle hardware other than the car machine. For example, by clicking the “Nap for a while” button on the mobile phone, the mobile phone will set the alarm clock and do not disturb mode, and the car will adjust the audio, ambient lights, seats, etc. Wait.

Before the Pantanal, there were two main ways of interconnecting mobile phones and cars. One is to synchronize the apps and services on the mobile phone to the car device through screen projection, such as Apple CarPlay. Through Baidu CarLife, OPPO, Xiaomi, vivo and other Android phones have been able to achieve similar functions before. The other is Huawei Hongmeng, which provides a complete operating system directly to car companies.

Car companies have concerns about these two solutions. If CarPlay is used, the car device is equivalent to an extended screen of a mobile phone, and Apple can bypass the car company and directly grasp user information. In Hongmeng’s existing cooperation cases, BAIC’s Polar Fox Alpha S HI version, Wenjie M5, M7 and other Hongmeng models also use Huawei’s in-vehicle computing platform. Huawei has both software and hardware dominance, and even participated in the preliminary design. This is not a form of cooperation that strong car companies are willing to accept. Chen Hong, chairman of SAIC Motor, said at the shareholders’ meeting last year that if the entire solution provided by Huawei is adopted, the car company will be equivalent to a body without a soul.

Pantanal’s Carlink is the third way other than CarPlay and Hongmeng. It is implemented through middleware, which connects the mobile operating system and vehicle system downward, and supports services such as App applications upward. The car system and the mobile phone system open interfaces to each other, which can open up data and even share computing power; at the same time, the car and the mobile phone also open some hardware interfaces to each other, which allows users to control the mobile phone and the car device synchronously, such as operating on the mobile phone. Adjust the audio, seats, etc. in the car. After connecting to Carlink, car companies will not be bypassed and can still control the car machine by themselves.

In the Carlink solution, other smart devices such as mobile phones and tablets connected to the car may not necessarily be OPPO’s own products in the future. Hong Hansheng, director of OPPO software technology planning and architecture design, told LatePost that Pantanal will be open to the entire industry, and will definitely open source when it reaches a more mature stage.

In October last year, OPPO has teamed up with mobile phone manufacturers such as vivo and Xiaomi, as well as automobile manufacturers such as SAIC, Geely, and Changan to set up the Smart Car Alliance Open Alliance (ICCOA). OPPO plans to promote Pantanal’s technical system and open concept to members of the alliance.

Do not seek dominance

OPPO not only hopes to achieve a more open ecology in the interconnection of vehicles and machines, but also does not pursue dominance in the entire Pantanal plan.

The Pantanal started in 2019. At the OPPO Future Technology Conference at the end of this year, Chen Mingyong officially proposed that OPPO should devote itself to the integration of all things, and then OPPO launched smart devices such as TVs and watches.

At this time, Xiaomi Mijia has become the largest ecological platform in the field of Internet of Things. According to the financial report, Xiaomi’s AIoT business revenue in 2019 reached 62.1 billion yuan, accounting for 30% of the total revenue; in the same year, Huawei’s Hongmeng system debuted, and proposed a 1+8+N strategy, 1 represents the core device of the mobile phone, 8 stands for PC, tablet, earphone and other peripheral devices of mobile phones, and N stands for various peripheral smart devices. Since 2015, Huawei has successively launched products such as watches, headphones, and tablet computers.

Both Xiaomi and Huawei want others to follow their own connectivity protocols and standards. Through investment and operation, Xiaomi has established a smart home ecological chain to achieve relative unification of standards and solutions; Huawei intends to recreate an Android and reinvent the interconnected experience of multiple devices. Its strength is a large number of its own brand devices. They are all pursuing a closed loop, and Xiaomi and Huawei are the central players in the closed loop.

OPPO has changed its way of thinking. It neither builds its own operating system nor seeks to let others follow its own connection standards or protocols, but tries to find an interconnection method that is more attractive to partners, that is, the current cross-system middleware “Pantanar”.

The idea took shape around 2020. Hong Hansheng, who was previously responsible for the research and development of the mobile operating system Flyme in Meizu, joined OPPO at the end of 2019. His first task was to discuss with the team how OPPO would use to build the IoT ecosystem.

Compared with Xiaomi and Huawei, the sales of OPPO IoT devices are not bright. At the beginning of Hong Hansheng’s joining, the initial vision of OPPO management was to cooperate with ecological partners with the greatest openness and friendliness, instead of seeking to dominate and be the protagonist.

The common appeal of OPPO and its partners is to improve the user experience when using multiple devices. This will not only bring stronger brand stickiness, but may also bring more users and transactions to some partners who join the ecosystem.

A better experience comes from better connection quality, deeper device integration, and smarter functional design.

Hong Hansheng told LatePost that what OPPO cares most about at this stage is not the number of connected devices, but the quality of the connection, that is, Pantanal should technically achieve stable connections, low latency, and fast speeds.

Deeper device integration is OPPO’s understanding of the future trend of the Internet of Things: the first stage of the Internet of Things is the interconnection between devices, and then “inter-integration”, that is, sharing data and even computing power among multiple devices, different devices. Supporting the same application or service together is like the same consciousness, in multiple bodies at the same time. This creates a new human-computer interaction experience.

Smarter functional design is based on the ability to fully understand the usage scenarios of services such as apps, predict user behavior and their usage logic for smart devices, and express usage logic into a simple and friendly interactive interface.

One of Pantanal’s current main interaction methods is to use cards on the home screen of mobile phones, watches and other devices to tell the user what he is most likely to do or use next. Taking a business trip as an example, when you buy a ticket through the ticketing app, the phone equipped with the Pantanal system will remind you that you can download the video in advance, so that you can watch it offline on the plane. After clicking confirm, the video app will automatically Enter the download process. After arriving at the airport, the system will automatically synchronize the boarding gate information; after passing the security check, the card on the main screen of the mobile phone will recommend nearby restaurants, such as suggesting you order a cup of coffee, which is a precise marketing. When you finally board the plane, the card on your phone’s home screen will turn into an electronic boarding pass again. If you are inconvenient to receive information through your mobile phone, you can also get notifications through other devices connected to Pantanal such as headphones, watches, etc. These devices are not necessarily OPPO’s own devices.


Figure: Pantanal can automatically push related services nearby when users line up for security check or need to buy food.

A person in the Internet of Things industry said that under the Pantanal plan, developers do not need to touch the bottom layer of the hardware, which saves a lot of trouble: “The industry is very happy to see this model, OPPO has done the dirty work, and it is not a problem. To steal the limelight of a partner.”

Relieving developers from worry also means that Pantanal has a certain cost of adaptation, which requires OPPO to customize development for different cooperative companies and scenarios.

In order to avoid falling into fragmented development, OPPO’s strategy is to give priority to cooperation with leading companies in high-frequency scenarios, such as cooperation with SAIC in vehicle scenarios, and cooperation with Hisense and Midea in the field of home appliances.

At present, the OPPO Pantanal team has exceeded a thousand people. The functions for C-end consumers will be launched next year with the ColorOS 13.1 version.

According to “LatePost”, Pantanal is not burdened with revenue targets for the time being. Its first priority is to enhance the user experience when using mobile phones and the Internet of Things. After there are enough devices connected to Pantanal in the future, OPPO plans to make money through mobile Internet services, such as paid sharing of apps and advertising.

From the perspective of the mobile phone market, the gross profit of Internet services is high and the volume is relatively small. Xiaomi’s mobile Internet service revenue last year reached 28.2 billion yuan, accounting for less than 10% of Xiaomi’s total revenue; but its gross profit margin was 74.1%, contributing more than 40% of Xiaomi’s 11.8 billion yuan gross profit.

have to change

Offline channels + marketing + design, this is a long-term experience accumulated by OPPO founder Chen Mingyong in the BBK system. With the above-mentioned capabilities, OPPO achieved the first place in the Chinese market and the fourth place in the global market in 2016.

2016 is also a turning point when the growth rate of the mobile phone market is about to peak: this year, the penetration rate of mobile phones in China reached 93.2%, and the wave of large-scale replacements has basically ended.

After that, the new growth lies in high-end and overseas, and only Huawei has really seized the opportunity. Since 2017, Huawei has replaced OPPO as the champion of the Chinese market, and its global share has also risen rapidly.

Huawei’s success proves that the key to competition in the high-end mobile phone market lies not only in marketing, channels, product positioning and design, but also in the better experience brought by technological advantages.

At the end of 2019, Chen Mingyong announced at the OPPO Future Technology Conference that in the next three years, OPPO’s total R&D investment will reach 50 billion yuan. In the second year, OPPO released the “3+N+X” technology transition strategy, where “3” refers to the basic technologies of hardware, software, cloud and big data. Prior to this, Chen Mingyong had not attended OPPO’s public events for six years.

At that time, the market was very bad about OPPO. In 2019, OPPO’s shipments dropped from second to third in China. At this low point, OPPO decided to increase investment in technology, instead of jumping into a new business, it chose to build new technological capabilities.

In the following three years, focusing on the three basic technology fields of hardware, software, cloud and big data, OPPO has established three major plans within Mariana, Pantanal and Andes, corresponding to chips, software engineering, and cloud services respectively. The naming reveals OPPO’s perception or expectations of these new plans, Mariana, Pantanal and Andes, the deepest trenches, the largest wetlands and the longest mountains in the world.

After the establishment of these three major plans, OPPO’s technical investment has increased significantly. OPPO CEO Chen Mingyong once revealed in an interview that OPPO’s R&D investment in 2019 reached 10 billion, compared with 4 billion the year before. An OPPO management told LatePost that since 2020, the actual total R&D expenditure of OPPO is more than the 50 billion promised by Chen Mingyong.

Hong Hansheng, director of OPPO software technology planning and architecture design, told LatePost that when the project was established in early 2020, Pantanal spent 20 million on research and development with universities every year, and now it has increased to 200 million.

OPPO has invested a lot in the core making of the three major R&D plans. In the second half of 2019, OPPO launched a core-making plan. In the following year or so, its team has rapidly expanded to more than 1,000 people, surpassing the chip design companies such as GigaDevice and Goodix Technology, which have been established for more than ten years.

At present, the price of chip talents is soaring, and the annual labor cost of a chip team with more than 1,000 people is not low. OPPO’s first self-developed chip product is the image-specific NPU-Mariana X released last year. The chip uses TSMC’s 6nm advanced process and costs tens of millions of dollars per tape. With the current scale of OPPO’s self-developed chip team, the market speculates that OPPO is also developing more and more difficult chips.

A series of technical investments are aimed at improving the mobile phone experience and brand, and continuing to develop high-end products. The impact of high-end is a must for all Chinese mobile phone manufacturers. According to Counterpoint’s data, last year, OPPO earned 1,587 yuan for each mobile phone sold, which was higher than Xiaomi’s 1,229 yuan and far lower than Apple’s 5,200 yuan.

It seems that OPPO is still repeating its previous successful path: imitating the correct experience of the industry pioneers, and there is no risk of deviating from the general direction. But this time, it’s hard to execute. Taking chipmaking as an example, there were many players in the global mobile phone market. Only Samsung, Apple and Huawei have successfully developed core chips for smartphones.

The large-scale investment in basic technologies such as chips and software has taken up a lot of resources. This may be another reason why Chen Mingyong has not made a decision to build a car after intensive visits to car companies in 2021. It is difficult for a company to engage in two Mariana-level challenges at the same time.

Entering the new car-making business with fierce competition and huge space, or learning a new ability from scratch, it is difficult to say which one is more risky and less likely to succeed.

OPPO was considered to be relatively cautious in the past. It is not the first and fastest to make smartphones and the Internet of Things. But now, it has to take the initiative to change and put more force into its chosen direction.

Those faster-effective methods, such as advertising, endorsements, and channels, are no longer as powerful as they used to be. The rest of the road is a deeper and longer alley, and you can only see the result if you go further forward.

This article is reprinted from: https://www.latepost.com/news/dj_detail?id=1293
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