On March 4, 5 years ago, Huawei’s consumer business CEO Yu Chengdong said at the 2015 Mobile World Congress that the smartphone industry will be reshuffled. Only three major mobile phone manufacturers will remain in the next three to five years. . So far, the five-year limit has arrived, and discussions about whether Yu Chengdong’s predictions have come true have become hot spots in the industry. So the question is coming, has Yu Chengdong’s prediction been realized? How can we correctly and rationally understand the true value behind his predictions?
In fact, according to Yu Chengdong’s predictions, the industry will eventually draw different conclusions due to different standards. However, in our view, using real market data, the five-year resumption of Chinese mobile phone manufacturers’ changes in technology and market strategies at different stages in China and the global smartphone industry is more valuable to the future of China’s smartphone industry.
2014-2015
The glory of independence, the Chinese market is closer to Xiaomi, and the global market is the third best for Lenovo.
Here we may first look at the background of China and the global smartphone market when Yu Chengdong published this forecast. It should be noted that since Yu Chengdong’s forecast is in March 2015, Huawei’s performance and position in China and the global smartphone market in 2014 should be an important basis for his release of this forecast.
According to statistics from IDC, in China’s smartphone market in 2014, Huawei’s market share was only 9.8%, ranking fourth, and Xiaomi (12.5%) in front of it, respectively; Samsung (12.1%) And Lenovo (11.2%).
From the perspective of the global market, the same is IDC’s statistics. Huawei ranks fourth with 5.7%, and Samsung is the first (24.5%), Apple (14.8%), and third. M & A by Motorola Mobile.
When we look at Huawei ’s current situation in China and the global market in 2014, we can see that when Yu Chengdong predicted that time, Huawei ’s situation was not optimistic. Among them, the Chinese market only ranks fourth, and the Xiaomi model, which ranks first in the Chinese market, is gaining momentum.
Looking at the global market again, Huawei, which was supposed to be in the third place. As early as 2014, Lenovo acquired Motorola Mobile. By the end of 2014, its third position was replaced by Lenovo (Lenovo + Motorola), and there was A gap of 22.9 million units.
From this point of view, Yu Chengdong made such a prediction early in the following year and indeed took great risks. So where is Yu Chengdong’s confidence?
It was this year that, in response to the popularity of the Xiaomi model in the Chinese mobile phone market, the Honor brand officially operated independently from Huawei, while using Huawei’s technology (it is said that only in 2014, the Huawei consumer BG R & D investment of the Honor brand belongs to) It reached 1.2 billion US dollars, with 16 R & D centers around the world, and through the R & D centers, the United States, Europe, and Japan’s mid-range technological advantages and innovative resources were organically combined to build global innovation capabilities. Approach, focusing on cost-effectiveness, and more prominently building brand tonality, that is, a technology-oriented Internet brand for young people, which also lays the initial foundation for Honor to always change when the market is facing changes. .
In the next year, Huawei ’s share in China ’s smartphone market rose sharply to 14.5%, which was only 0.5 percentage points behind the first-ranked Xiaomi, but the year-on-year growth rate was 2.3 times that of Xiaomi. Among these, independent operations Honor has played a vital role. At the same time, due to the decline of the Xiaomi model in 2015 and the rise of traditional offline channels, OPPO and vivo ’s long-established traditional channels have shown a growth advantage. Under the combined effect of this subjective and objective factors The growth rate of Xiaomi’s Chinese market in 2015 fell sharply, which indicates that in the coming 2016, Huawei will complete the overtake of Xiaomi, which was once the number one in the Chinese market, but encounters a new rival OV.
As for the global market, thanks to the blessing of the Honor brand, Huawei has been able to further segment its overseas markets. The European market, which has a foundation in telecommunications operations, has continued to make inroads, while Lenovo, which had previously led Huawei in the global market, has — The traditional operator subsidy channel in the Chinese market gradually began to give way, but it did not have the corresponding Internet mobile phone brands and traditional channels like OV. Its rapid decline in the Chinese market in 2015, while falling out of the top 5, caused its The global market fell sharply by 21.1% year-on-year.
It is precisely because of the superposition of Huawei’s own positive and Lenovo negative factors that it has maintained the third-ranked Lenovo in the world for only one year. It was surpassed by Huawei in 2015, lost its third position, and was led by nearly 30 million units. Shipment volume, which is by far the only Chinese company with the best opportunity to surpass Huawei to become the top three global manufacturers, can not help but sigh.
What’s more deadly is that with the fall of the Chinese market, marked by the departure of Lenovo’s president of China, Liu Jun, Lenovo’s mobile phone business has begun to enter a period of strategic turbulence and wobble, and has since recovered.
2016—2017
Super Xiaomi welcomes OV, the Chinese market has reached the top, and it is strategically swayed.
In 2016, the Chinese mobile phone market ushered in the second-best year since 2014, and the only year that has since grown to 2019.
Under the situation that the broader market is getting better, Chinese mobile phone manufacturers have been able to cross the sea in this year, each showing their magical powers. Among them, OPPO and vivo took advantage of the opportunity of the Chinese mobile phone market to transfer offline channels from some offline to the maximum of the channel dividends previously accumulated. In addition, they invested heavily in entertainment marketing, and achieved fairly rapid growth. The growth rate is as high as 122.2%, and vivo is 96.9%. With such a rapid growth, the biggest injury is naturally Xiaomi, which almost depends on online sales, which has dropped by 36% year-on-year. About 40%.
As a result, although Huawei unexpectedly surpassed Xiaomi, it was suppressed by OPPP and ranked second in the Chinese market. However, the gap between the two sides’ annual shipments was only less than 2 million.
It is precisely due to the rapid growth of nearly three-digits in the Chinese market. In the global market in 2016, OPPO and vivo also achieved three-digit year-on-year growth and entered the top 5 for the first time. It was replaced by 2015. Lenovo and Xiaomi, which are still among the top 5 in the world in the year.
Compared with Huawei, however, because OPPO and vivo are still dominated by the Chinese market, although the global three-digit year-on-year growth rate is much higher than Huawei’s 30.2%, it still fails to surpass Huawei. With its stable growth in overseas markets, Huawei , Not only maintained the third position in the world, but also the gap with the OPPO shipments behind it rose to 62.79 million units. Note that this gap is twice as much as Huawei’s surpassing Lenovo to become the world’s third-leading 30 million units in 2015.
In fact, domestic mobile phone manufacturers should be aware that it is by no means normal to surpass Huawei globally. But unfortunately, later OPPO, vivo and Xiaomi all imitated to varying degrees, and even made Huawei, but the results were more than worth the money.
It should be noted that although OPPO and vivo ’s offline channels and entertainment marketing have achieved great results, Huawei and Xiaomi are not waiting. Huawei Experience Store, Qianxian Project and Xiaomi Home have also started and rapidly developed this year. , And even appeared “grabbing people”, “grabbing stores”, and even “smashing stores” war. As for entertainment marketing, Huawei and Xiaomi also followed up in a timely manner. And this emulation effect quickly diluted the existing advantages of OPPO and vivo, and was fully reflected in the Chinese market the following year.
At that time, in 2017, due to the emulation and catch-up of Huawei and Xiaomi in marketing and channels, the growth rate of OPPO and vivo in the Chinese market fell sharply this year. Among them, OPPO’s year-on-year growth rate was 2.7%, which was only 2.2% last year’s year-on-year growth rate of 122.2%, while vivo even experienced a negative year-on-year growth of 0.8%.
In contrast, Huawei’s year-on-year growth rate is 18.6%, and Xiaomi’s is 32.6%. Among them, Huawei pulled Xiaomi in 2015, approached OPPO in 2016, and finally surpassed OPPO in 2017 to win the Chinese market.
Here we don’t know how the industry understands the value and significance of Huawei’s first question on the Chinese market?
What we see is that Huawei’s surpassing Xiaomi and OPPO is not just a digital surpass, because Xiaomi and OPPO represent the mainstream business models (Internet, traditional channels) at different stages of development in the Chinese market. There is no advantage in these two completely different business models, but every time Huawei learns the essence in the shortest time, especially when the two models are alternated and mixed, ordinary manufacturers will appear during this period. Big ups and downs (like Xiaomi, OPPO and vivo), but Huawei basically maintains stable growth. What is the reason? It is worth studying.
The performance of the Chinese market is undoubtedly reflected in the global market. Due to the decline in the growth rate of the Chinese market, vivo withdrew from the top 5 in the world, and the year-on-year growth of OPPO also dropped sharply from 132.9% last year to 12%. Only ranked 4th.
Here, the industry may find a strange phenomenon. In the past, Huawei, which had double-digit growth in the global market, only increased 9.9% year-on-year. On the contrary, Xiaomi was squeezed out of the top 5 global markets in 2016. It returned to the top 5 in the world with a year-on-year growth rate of 74.5%.
Xiaomi, who had been changed to “Others” by Lei Jun in 2016, actually died. What happened?
In the industry, Yu Chengdong clearly stated in his 2017 New Year congratulations that 2017 will be a year of transformation for Huawei’s refined operations. Everything must be centered on profits, and models must be reduced to make quality products. Combined with the chairman of Huawei ’s Ren Zhengfei ’s Huawei Consumer BG Annual Conference, “beyond Apple in terms of profit and service level, not the number of units sold, so the company ’s EMT meeting set a small target for your terminal. Within three years, the service level has caught up with Apple “The profit margin has caught up with OPPO / vivo, so we are very satisfied.” We know that the core of Huawei’s 2017 consumer BG strategy is profit first.
But in October, Ren Zhengfei was in an internal speech at Huawei, Expressing the importance of low-end product lines, saying “90% of the world is poor, and there are poor people in low-end mobile phones. Do n’t look down on them. Huawei also wants to make low-end phones, our old products. Settle down and you can be a low-end machine. “
Then, Ren Zhengfei personally issued the “Honor Brand Mobile Single-Unit Concession Bonus Plan”. It is worth noting that in this plan, Honor-brand mobile phones are commissioned according to the number of units sold, and mobile phones of different gears and models The commission is the same. The calculation method is the Honor brand mobile phone bonus value = single unit commission * number of units sold * acceleration incentive coefficient * contribution rate completion rate. The first-line organizations receive bonuses directly based on the number of sales units, and the platform organizations receive bonuses based on their contributions to the first-line service and support, and they have been implemented since October of that year to avoid delays.
From the beginning of the year to the end of the year, it can be said that Huawei ’s strategic understanding and positioning of the consumer BG business has undergone fundamental changes. Why?
From our observations, it is precisely based on the strategy of Huawei Consumer BG’s top-down profit first. Huawei ’s mobile phone shipments in overseas markets at that time had almost no increase compared to 2016. Obviously, Huawei has compressed or slowed the entry or development of overseas low-value markets, especially India and Southeast Asia, which have been controversial within Huawei before. These are definitely low-value markets, but Xiaomi relies on the accumulation and development of the Indian market. Power, resurrected from the second quarter of 2017.
It is also because of the rise and fall of Xiaomi that Xiaomi’s IPO and IoT have developed strongly in the following year. This manufacturer that was once overtaken by Huawei and was “eliminated” just one step away is exactly what Huawei believes The low-value market not only “resurrected” the mobile phone business, but also became Huawei ’s biggest rival to the smart strategy in all scenarios.
We ca n’t comment on the success of Huawei ’s strategic choice at that time, but judging from the final results of “putting the rice back to the mountain” and Huawei ’s changes before the end of the year, this strategic choice is indeed questionable.
2018-2019
Repel OV innovation challenges, Huawei Super Apple consolidates the top three in the world.
Maybe it is the strategic swing of 2017 that is undoubtedly a crucial year for Huawei in 2018.
From the beginning of 2018, Ren Zhengfei spoke at Huawei’s Consumer Business Report and Backbone Symposium. The speech was signed on January 2, 2018, and it is also the first document in the email of the President of Huawei in 2018. ). In the document, Ren Zhengfei affirmed the development of Huawei’s terminals in recent years, but also stressed the need to gradually strengthen the strategic depth of construction, face the gap with Apple and Samsung, and reminded once again that the importance of low-end mobile phones cannot be ignored.
In this year, OPPO (including closely followed vivo), which was surpassed by Huawei in the Chinese market, changed its previous channel and entertainment marketing practices, directly pointing to Huawei ’s core advantage-innovation, and its separately launched Find X and vivo NEX have indeed excited the industry. At the same time, Xiaomi, which was resurrected in 2017, even announced in early 2018 that it would return to the top of the Chinese mobile phone market in the next 10 quarters, which has also attracted high attention from the industry. It is conceivable that Huawei’s pressure is naturally dare not neglect.
I implicitly said that although the design of friends and merchants looks amazing, they are not very practical. All innovations should serve users, and can not be flashy. In 2018, Huawei became the most innovative mobile phone application technology. One year, the “very scary technology” from Yu Chengdong was selected by some media as one of the top ten hot words of 2018, and 2018 was also regarded as Huawei’s “very scary technology” year.
Whether it is the world ’s first 7nm 980 chip, or GPU Turbo, which has been imitated by various follow-ups, not only has occupied the first place in the minds of consumers, but also has proven to be fromYears of accumulated innovation DNA can easily be shaken and surpassed.
Facing Huawei’s “very scary technology”, from the final market results, the “innovation” cards of OPPO, vivo and Xiaomi are not playing well. As of 2018, OPPO’s China market shipments fell 2.0% year-on-year; Xiaomi’s 5.6% year-on-year. However, vivo increased by 10.8% year-on-year. However, the growth of vivo mainly comes from its main online cost-effective models, such as the vivo Z series. Instead, Huawei suffered from “innovation”, and shipments increased by 15.5% year-on-year, not only maintaining last year. The first position, and gradually began to distance from the opponent.
From the perspective of the global market, while maintaining the world’s third, the year-on-year growth rate is 3.39 times the year-on-year growth rate of the previous year. Zida has grown to 83.4 million units. In particular, the gap with the second-ranked Apple in the world is only 0.2 percentage points.
In comparison, Xiaomi, which returned to the top 5 in the world the previous year, suddenly fell from 74.5% to 32.2% year-on-year (the main driver of growth still comes from the Indian market). OPPO increased slightly by 1.3% year-on-year. Importantly, while challenging Huawei, OPPO turned out to be overtaken by Xiaomi in the global market, and it is this result that directly affects the next year, OPPO(Including vivo) strategies and markets.
In 2019, with the main “Innovation Brand” with little effect, OPPO, vivo and Xiaomi have respectively split their brands or established new sub-brands. Among them, Xiaomi splits Xiaomi and Redmi; OPPO releases the sub-brand Reno; vivo releases the sub-brand iQOO.
There has been controversy in the industry over the adjustment of the above brand strategy. But for manufacturers, the core purpose is to achieve a superimposed effect and promote sales growth, at least not to decline. However, it turns out that the adjustments of OPPO, vivo and Xiaomi on the brand in 2019 are counterproductive. In the Chinese market, not only has not achieved sales growth, but a sharp double-digit decline. Among them, the decline of Xiaomi and OPPO exceeded 20%.
Compared with the double-digit year-on-year decline of OPPO, vivo, and Xiaomi, Huawei has achieved double-digit growth. .
Although OPPO, vivo, and Xiaomi have achieved growth in overseas markets, especially in India and Southeast Asia, they have not stopped their decline in the global market due to the excessive decline in the Chinese market. Among them, Xiaomi has only increased by 5.5% year-on-year, which is 17% year-on-year growth rate of the global market in 2018, and OPPO has only slightly increased by 0.9%, which is less than the year-on-year growth rate of 1.2%. As for vivo, like last year, it still fails to enter the top 5 in the world. However, Huawei has benefited from the rapid growth in the Chinese market, making up for the impact of its nearly stagnant overseas market growth caused by non-market factors. Under the premise of base number, its shipments are already close to twice that of Xiaomi.
In fact, here we have seen that, in addition to Huawei, Lenovo, Xiaomi, OPPO, viivo, etc. have had such an instant distance from Yu Chengdong’s three major mobile phone manufacturers in the world in just 5 years Far away; once had its own so-called unique advantage, but in the end it was just a flash in the sky for a year.
Which of technology, product, market and marketing is the core competitiveness and stable and long-term development of China’s smart phone industry? I believe that in the past five years, the strategic choices, changes and results of mainstream mobile phone manufacturers in China should find their own answers.