China’s mobile phone history: the best era is over – IT Home

Author｜Lu Yao

Editor｜Sang Mingqiang

After struggling for a long time, if we talk about the mobile phone industry in 2023, it seems that there will be nothing new.

In the past year, more than ten press conferences have been held in the industry. OPPO, Xiaomi, IQOO, and Huawei have successively launched mid-to-high-end new phones, such as OPPO’s folding screen Find N2, Xiaomi’s 13 series, and competition in the price range of 4000-5000 yuan. Especially intense. But in contrast to the fiery situation of new machines coming out one after another, few people seem to pay attention to these.

According to the latest data released by IDC, global smartphone shipments in Q4 2022 fell by 18.3% year-on-year, and annual shipments fell by 11%.In this regard, institutional analysts also bluntly said that the market performance in this quarter was the worst in ten years.

During the same period, according to Counterpoint Research’s survey, after the annual smartphone shipments once again experienced a double-digit decline, the downward trend of China’s smartphone shipments has spread for five years.

Specific to manufacturers, the top five manufacturers of Apple, Samsung, Xiaomi, OPPO, and vivo have collectively plummeted. Among them, Samsung and Apple fell by 4.1% and 4% respectively. As for domestic Xiaomi, OPPO and vivo, they also fell by 19.8%, 22.7% and 22.8% respectively.

If we look back at 2017 again, it was at the peak of domestic smartphone sales, but shipments also declined for the first time:491 million units, a year-on-year decrease of 12%.It is generally believed inside and outside the industry that after the ramp-up of production capacity and the multi-dimensional layout of online and offline, channel competition and marketing have no absolute effect. In addition, the large-scale expansion of the industrial chain during that period directly led to an oversupply. As the profitability of manufacturers declines, it also affects the production process.

But what is interesting is that the problems faced by mobile phone manufacturers 5 or 6 years ago are quite different from what they are now.

For example, Xiaomi was stuck in the supply chain at that time, Jia Yueting’s LeTV mobile phone encountered a financing crisis, Luo Yonghao hit a wall with a hammer to many suppliers, and frequent personnel changes became the dominant factor restricting the development of Meizu. After that, OPPO and vivo came from behind and broke the The marketing model of Internet thinking… During that time, manufacturers went hand in hand, but at least the market still retained expectations for new technology leaps.

According to a report released by the China Academy of Information and Communications Technology, in the first quarter of 2016, there were 274 smart phones on the market in China, with an average of 3 models released every day. This figure is second only to the peak in 2013, when 2,288 mobile phones were launched in one year. Let’s look at the past 2022. Xiaomi and vivo successively released the 12S Ultra with a one-inch outsole and the flagship X90 Pro, as well as Apple’s Smart Island animation.

From an industry perspective, the iphone After defining the appearance of the candy bar touch screen, the entire industry ushered in drastic reforms in terms of product form, interaction methods, and information acquisition efficiency. There are more and more players, cameras, color matching, screen design, and performance are constantly involving, stockpiling competition, price wars, and part of them are eliminated; when the replacement cycle exceeds 3 years, manufacturers have invested in supply chains, self-developed chips, and operating systems , intelligent interconnection and other fields.

However, these did not cause qualitative changes.Because it can’t stop the decline in the frequency of consumer demand, and even dilutes the brand characteristics, the ensuing is trapped in homogenization. Especially in the past two years, mobile phone tycoons have begun to realize that as the multiple of market capacity shrinks, the method that manufacturers used to engage in price wars and rely on incremental markets to make up for low profit margins is no longer feasible.

As a result, Huawei and Xiaomi launched new energy vehicles, Byte also stopped the mobile phone business long ago, and instead acquired pico to lay out VR. After Geely acquired Meizu, Luo Yonghao’s entrepreneurial story turned to AR, and the iPhone was also modified on the original basis. Make up.

For more than ten years, domestic brands such as Meizu, Xiaomi, Huawei, OV, Huang Zhang, Lei Jun, Shen Wei, these names have been involved in the torrent of history. The time is not long or short, but it is enough to witness an industry go through its history completely. rising period.

But if we change our thinking and return to the product itself, it is not a question of whether a certain technology has a bottleneck, but that the user’s imagination of mobile phones has almost reached the extreme, the memory is already high enough, the efficiency is running fast enough, and what is surging is only the wave of consumption. , Changes in product innovation dimensions. Perhaps new needs need to be met by products such as VR and AR, but that is for the future.

01.Internet Model and Machine Sea Tactics

At the beginning of this year, Shen Wei, the founder of vivo, still compared mobile phones to an industry with “long slopes and thick snow” in his New Year speech, and he was full of expectations to welcome the next decade of smartphones. I think the main reason behind it is,In 2022, vivo once again topped the domestic list with 18.6%, although the year-on-year growth rate fell by 25.1%.

Here I have to mention the data background. Four authoritative organizations, IDC, Counterpoint, CINNO Research, and Canalys, have concluded that the annual shipments of the domestic mobile phone market have fallen by nearly 20% year-on-year. Among them, among the top five on the list, OV and Xiaomi accounted for the majority, but both experienced a year-on-year decline of more than 20%; Honor is the only mobile phone manufacturer with year-on-year growth, Apple is relatively stable, and the share gap between Xiaomi and other manufacturers is gradually widening .

Shen Wei attributed the industry’s biggest challenge to the slowdown of technological innovation, and believed that“Try to avoid price wars. The improvement of innovation capabilities and operational efficiency is the top priority for increasing efficiency and reducing costs.”Even if the “cold winter” is avoided, the emphasis is still on reducing costs and increasing efficiency between the lines.

To some extent, vivo has the shadows of various players in the industry.

When it was first established in 2010, Shen Wei’s thinking on brand positioning continued Duan Yongping’s focus law:“In the subdivision of the industry, establish a relative competitive advantage, and eventually catch up”. In fact, vivo is not the brand with the highest exposure rate. It can be traced back to its founder. Although it was born under Duan Yongping’s family together with OPPO Chen Mingyong, the former feels square to the outside world, while the latter has a sharper personality.

Therefore, compared with the radical OPPO, vivo’s market strategy can be called conservative. For example, OPPO at the helm of Chen Mingyong has invested 50 billion yuan to build a R&D team of 2,000 people in order to build cores. In contrast to vivo, some media revealed that the entire chip team has only 200 people. Originally, vivo also planned to make high-profile chips, but it was concerned about changes in the external environment. After seeing Huawei being sanctioned by the United States, it still chose to tighten its tail.

After comparing the two products, we can even see that vivo is following OPPO’s footsteps. For example, after the latter launched the “ultra-thin” Finder in 2014, vivo also launched an ultra-thin model within a month. Afterwards, full screen, water drop screen, Bluetooth headset, smart watch to folding screen mobile phone, OPPO restarted the Find series that had been suspended for many years, intending to compete for the high-end market vacated by Huawei, and vivo’s products basically followed.

Lag and conservatism are not the characteristics that a brand with the largest market share should have. When looking back at the development of vivo, you will find that historical decisions, superimposed on the current market strategy, and pouring out vivo, which is leading in the domestic market, are also It magnifies the company’s future worries.

The reality is: In the market competition, vivo, the pinnacle of sales, is still adopting offline machine sea tactics as always.

In the “China Cool Union” ten years ago, manufacturers launched new phones within the price difference of 100 yuan through the arrangement and combination of different configurations and functions. Most of the products lacked new ideas. After the price war, the market cleared. No longer a big player in the mobile phone industry. “They are all desperately adding configurations and functions, as if whoever can launch the product the fastest wins,” Cao Jingsheng, vice president of Coolpad, recalled in an interview.

But this way of playing has been accidentally preserved, and continues to this day.

Due to the product layout, vivo does not adopt the strategy of “Internet marketing + extreme cost performance” like Xiaomi, and makes efforts in first- and second-tier cities. The former’s 21% market share is still dominated by mid-to-low-end models, according to media statistics. , In the past two years, vivo has released more than 40 models within a year, far exceeding other similar brands. What followed were doubts about “high price and low allocation” and problems in system adaptation.

As a result, according to industry observations:Vivo always needs to stock a lot of parts, but the effectiveness of the new machine is short, and it can’t be sold not long after it is released, and the parts that have been ordered cannot be returned, so it relies on the new model of nesting dolls to rush a wave of sales Go to parts inventory. For example, the vivo y35m and v2230a submitted by vivo to the Ministry of Industry and Information Technology have the same parameters except for the memory.

In addition to the “China Cool Union”, Meizu and Xiaomi have released a variety of products with a price difference of 100 yuan. After the first red rice was launched in 2013, 50 red rice models have been released within nine years. Mi mobile phones, 11 of which will be launched in 2020. Meizu, which only had 1-2 new models in the past year, also released 9 new models in 2016.

As early as 2014, when it became the number one smartphone shipment in China, the Xiaomi model has also reached the boundary.Even Lei Jun himself admitted that mobile phones are facing innovation bottlenecks. The innovations of domestic manufacturers are becoming more and more limited. Dual cameras, fingerprint recognition, super long standby time, etc. are repeatedly arranged and combined in terms of hardware configuration and functions, and Apple’s innovations are becoming less and less.

On the other hand, Luo Yonghao, who does not have the advantages of the upstream supply chain but has strict requirements on mobile phones, also chooses an OEM to produce. It is reported that, compared to the low sales volume of Smartisan, Foxconn is focusing on the production of Apple products. Unlike OnePlus, which has OPPO as a supply chain support, the yield rate of Smartisan T1 is not high.

Competition is high and profits are small. The Internet model represented by Xiaomi, which relies on online channels, relies on OEM stockpiling, and pursues high cost performance, is not feasible. The promotion methods of offline channels are more flexible, but the inventory problem is obvious.

Obviously, the rules of the game have long since changed.

02、High-end is doomed, the key is how to understand “high-end”

In 2015, the contemporary mall on Zhongguancun Street ushered in a new face: Mi Home.

Lei Jun later pointed out,“Xiaomi will shift the focus of its sales channels from online marketing to physical stores,”In the same year, a 100-person product appreciation meeting was held, and the first high-end model Xiaomi Note was released. During the whole appreciation process, Lei Jun mentioned the two key words “high cost of accessories and low yield rate” many times.

Judging from the data released by IDC at the time, smartphone shipments in the Chinese market fell by 4.3% year-on-year in the first quarter. It reveals a message that the market inventory has decreased, mainly due to the decrease in first-time purchasers.

However, the demand for mobile phone functions was far from saturated at that time. A survey shows that nearly 60% of mobile Internet users change their phones, exceeding the first-time purchases. In other words, low-end smart phones cannot meet the needs of most users, and consumers are still willing to upgrade their phones to get a better experience.

On the other hand, the decline in the shipment rate also made it difficult for Xiaomi, which was valued at 46 billion US dollars at the time, to justify itself. In Lei Jun’s view, the wave of replacements will be a bonus for his high-end layout.

“NOTE may not really make money.”Lei Jun said.

In addition to the Snapdragon 810 processor, Xiaomi Mi Note’s stockpile also has a 2K LCD screen, rear 13 million pixels + OIS optical image stabilization, 3D glass back cover, HIFI chip, etc. Later, he said“High-end should be called high-end because of product quality and high-end performance, not what is expensive is high-end”,It has become a golden sentence to impress users.

For Xiaomi, after the failure of Note 2 to hit high-end products, although the MIX series has ushered in the era of full-screen display, the lack of supply chain and technical maturity eventually made this generation of models fail. Xiaomi President Lin Bin once publicly stated that one of the reasons for the postponement of Xiaomi 5 was the chip. At that time, Xiaomi 5 had already decided to use the Snapdragon 820 chip. Qualcomm used to release chips at a relatively fixed time, but the Snapdragon 820 was not released on time. Millet 5 also had to be postponed.

Before 2018, the flagship machine was popular, zooming in and subdividing functions, shooting, music, games, processors, and the body was extremely thin or the battery was extremely large.In essence, it is still looking for differentiation in the process of stacking materials. On the basis of upstream components in the mobile phone industry, some research and development results are added, and “micro-innovation” has become the mainstream.

It was the 10th anniversary of OPPO at that time. Wu Qiang, the vice president, clarified the prospect of brand upgrading and declared that OPPO would set off a brand upgrading war. Naturally, vivo would not leave it too far. After all, mobile phones are a “seafood market”. It’s too important to say.

In terms of practice, taking vivo as an example, corresponding to the “subdivision” strategy mentioned above, the technology is not enough to design, so the vivo mobile phone focuses on audio-visual technology and aesthetic design, optimizes the portrait photography function, and creates the first double-sided soft light portrait. These have become their own brand labels. According to the official statement, this positioning is to meet the needs of users with “design-driven”, while avoiding the head-on confrontation with the main “cost-effective” and “high-performance” opponents.

After increasing sales, we will make up for shortcomings and enrich our background in 5G, design, AI and other technologies. To some extent, this strategy does work.

According to statistics from relevant agencies, in 2014, vivo was only a marginal brand in the Chinese smartphone market; in 2015, vivo’s sales exceeded 35 million units, ranking fourth in China; by 2021, vivo will win the domestic market for the first time with a sales volume of 21.6 million First, and continues to this day.

From the first-generation X1, which was priced at 2,498 yuan ten years ago, vivo hopes to launch dual flagships. X is the flagship with a small screen, and Xplay is the flagship with a large screen and performance. The starting price of the X90 series has reached 3,699 yuan. Another product line, the X Fold is focusing on the folding screen market.

At the end of last year, Hu Baishan, executive vice president of vivo, pointed out in an interview with the media:“Many times in the past, what I did was on a short track, and it was not long-term.”The share of mid-to-low-end phones continued to decline,androidThe price range below 3,000 yuan in the market has been greatly affected. He believes that the reason for the deficit between the low-end and high-end markets is user mentality. For most low-end users, the performance of mobile phones three years ago is also sufficient.

“As long as the equipment is usable, they will insist on using it; but high-end machine users are not price-sensitive, and the replacement frequency is the same as in the past.”

Shen Wei compared 2022 to vivo’s high-end breakthrough year. According to a set of data from Counterpoint, in the second quarter of 2022, in China’s high-end machine market above 3,500 yuan, vivo accounted for 13% of the share, ranking second only to Apple. In the range of US$600 to US$799, the share of vivo increased by 504% year-on-year, and the average selling price of high-end products reached a record high of 6170 yuan.

In Hu Baishan’s view, the gap between vivo and Apple’s products is getting smaller and smaller.“In fact, many of our things are one and a half to two generations ahead of Apple.”

But the problem is also obvious. Vivo’s past gameplay and high-end path are not completely suitable. The rollout of offline channels mainly relies on agents, and the actual profit point of high-end smartphones has become thinner. Agents will match profit-making models to make up for retail revenue. The official said that vivo terminals are more restrained, similar to the S series. A defensive strategy is adopted in terms of price, but the capabilities of high-end phones will be delegated to other models to improve user experience.

On the other hand, high-end is not only reflected in products, but also consumers’ requirements for service capabilities are also rising. Even if vivo reduces the number of first- and second-tier agents and cancels the second-generation dealer link, the front-end agent system remains the same. It is the core. The back-end service system built by vivo relying on distribution agents is also different from the directly-operated stores and flagship stores of Apple, Huawei, and Xiaomi.

In the past, through the machine sea strategy to win by volume, vivo can make up for the income of the lack of ecology, but in the process of high-end, the impact of the lack of ecology will also be magnified.

In addition, although vivo ranks first in the domestic market share, the total shipments in the global market during the same period did not rank high. According to the data of Strategy Analytics, last year’s Double Eleven, Apple won 68% of the revenue, 14 and 13 contributed the most. JD.com’s mobile phone products rank in the top ten on Double Eleven. There is no vivo, and there are no other Android flagship phones.

03、Why is the current mobile phone industry an innovation desert?

French sociologist Tarde pointed out in his “Law of Mimesis” thatIn the process of human transformation, new inventions rarely appear, but more transformations and imitations.When the imagination of a certain field is fully developed, even if every subdivision or technology is called gold, it is a desert of innovation. The mobile phone industry is a typical example.

From the birth of the first electronic tube computer in 1946 and the emergence of real consumer notebooks to the release of the first generation of smart phones by Jobs, it defined the third generation of personal PCs. The ultimate goal of changing the interaction method and machine form is to meet the needs of users on this basis.

The logic behind the plight of the smartphone industry is easy to understand:Sales are down, but it’s still a just-needed product. The usage scenarios are getting wider, but at the same time it’s becoming more blurred. Some mid-to-low-end products will be eliminated. As for the high-end trend that is being mentioned now, it will be decided jointly by manufacturers and users.

Throughout these years of fierce battles, after several rounds of reshuffle, there were hundreds of mobile phone manufacturers more than a decade ago, but now there are only a handful of capable players. In the past, manufacturers were stifled by cash flow and supply chain development, and were entangled in using the Internet model or machine sea tactics. For example, Hammer pledged equity, and Coolpad was sold to LeTV. When the Coke mobile phone business was terminated in 2016, founder Ding Xiuhong stated Said, “The reshuffle of the mobile phone industry is faster and more brutal than expected.”

When the production capacity and funding problems are solved, players are busy with stacking materials, hardware and software involution, but these are not as good as the saturation of user demand.

Almost all the general processors on the market can run the current popular mobile games; 5G usage is lower than expected, and there is a lack of new killer applications on the market; no matter how many cameras there are, most of the tasks are still to meet basic daily needs. The actual experience improvement brought about by changing mobile phones is getting less and less, and the driving force will naturally drop sharply.

For example, Xiaomi, the player who once led the Internet mobile phone and advocated “extreme” looked around, and Lei Jun put his last business in this life on making cars. In 2019, Huawei established the intelligent driving solution BU, entered the car manufacturing market, and became an incremental component supplier for intelligent networked vehicles. Under the trend of intelligent transformation of automobiles, Xu Zhijun, Huawei’s rotating director, said,Incremental parts will account for 70% of a car’s value.

Since 2021, in addition to research and development patents, Apple has communicated with multiple hardware manufacturers that the first car will be a fully self-driving car, and the car-making plan has moved from corporate services to personal consumption. OPPO has applied for many car manufacturing patents and intends to enter the car. Vivo has also released a new brand of Jovi InCar car networking products. The official said that it will join hands with car manufacturers, car networking service providers, and application developers to build a unified openness inside and outside the car. ecology.

In contrast, new energy car companies, Geely and Weilai have joined the mobile phone camp; Tesla founder Musk once posted a tweet to recruit mobile phone experts to work in his company.

Yu Lei, former vice president of Gionee, believes that smartphones and smart cars will become two important terminals and entrances of the ecology in the future. Huawei executive Wang Chenglu described smart cars as “mobile phones with four wheels.” this means,The mobile phone’s chip research and development capabilities, batteries and other related software and hardware technologies, and more importantly, the future trend of car-machine interconnection, have contributed to the migration of mobile phones to new energy vehicles at the level of the industrial chain.

The demand does not disappear, it just survives in another way.

Subconsciously, people regard mobile phones more as a hardware product that adapts to external needs, such as car-machine interconnection, smart home, etc., and only think about problems in a cuboid tool. The current bottleneck is already obvious enough. The historical trajectory has proved that in many cases, the final possibility of industrial evolution is to move towards integration. Instead of focusing on the mobile phone itself, the trend of “mobile phone +” may continue in the future.

This article comes from the WeChat public account:Xinmou (ID: xinmouls)Author: Lu Yao