Mr. Shi Zhenrong, founder of Acer Group, proposed SmilingCurve, the famous SmilingCurve theory for 'remanufacturing Acer,' in 1992. The theory is that the most lucrative areas are concentrated at both ends of the value chain - technology, research and development And brand, market, assembly, manufacturing at the bottom of the curve position, that is, the level of profit minimum.
China has grown stronger than its rivals in manufacturing capacity. China produces 60% of the world's cement, 45% of steel, 50% of glass, 25% of cars, 40% of ships, 70% of smartphones and 90% Laptop, 80% air conditioner, 65% fridge ...
However, as revealed in the 'Smile Curve', assembly and manufacturing are only at the bottom of the value chain. Without the core technology and market brand capabilities, after consuming a large amount of manpower and material resources, manufacturing enterprises can only obtain profits from Weibo , Objectively, can only make wedding clothes for others.
Although China's color TV industry (complete machine enterprises) has achieved a significant technological and market breakthrough in the past 5 years, its profitability has been continuously declining despite the increasing scale and market coverage. It has not completely changed from the bottom of the 'smile curve' walk out.
Nail Technology noted that in 2012, the profit margins of the top six domestic color TV companies are still around 3%, but this data has been declining in the past five years and the profit margin in 2017 is only about 1%.
Orville cloud network data show that in 2017 China's TV market volume of 47.52 million units of retail sales, down 6.6%; the scale of retail sales of 163 billion yuan, an increase of 4.5%.
If the retail sales of 163 billion yuan, 1% profit margin, the overall profit of color TV 整机 industry only 1.63 billion yuan. To know that the current TV market competition in the brand (including Internet brand) total more than 20, on average Each profit less than 100000000 yuan.In fact, the industry profits can not be equally divided, the head brand will occupy most of the industry's share of profits, the vast majority of brands will be in the profit or loss state.
Color TV machine enterprises do not make money, so that many brands struggling, some Internet brands or even withdraw from the market directly.However, the tough machine machine, does not mean the overall industry chain dilemmas.In fact, in the upstream industry chain panel companies, 2017 Earn pours profusely.
According to nail science and technology, the LCD panel prices from March to April 2016 prices, lasted 14 months, some of the size of the peak month prices rose as high as 90%, the overall reached 40%.
Panel prices are also transmitted to the whole market.Nails technology noted that in 2017 LCD TV prices rose 12%, the average price from 3200 yuan at the beginning of the year rose to 3500 yuan.However, it is clear that the increase in color TV sets and No panel gains so much.
From the profit point of view, the panel business is very rich day .In the first three quarters of 2017, the world's top six LCD panel makers reached 11 billion US dollars profit, consultancy estimates that full-year 2017 profit will reach 14 billion -1.5 billion US dollars, Near 100 billion yuan!
TV whole machine industry profits less than 2 billion yuan, the total profit of six panel companies nearly 100 billion yuan, the panel business profits are 50 times the profit of the whole machine!
TV industry should be sustainable and healthy development, can not let the panel business unique, color TV 整机 enterprises must raise profits as soon as possible. Produced by observers, Ding Technology founder Mr. Ding believes that color TV enterprises to enhance profitability, the need to note the following five points :
First, rational competition. Under conditions of low profit margins, we resolutely put an end to the simple and brutal price war and do not take the old path of sacrificing profits for the market to avoid harms for others.
Second, focus on the high-end. Focus on the layout of 55-inch, 65-inch large-size high-end market, accelerate the upgrading of new display technology, speed up product mix adjustment and improve single product profit margins.
The third is the joint upstream panel is a heavy industry, complete machine enterprises in real time through self-construction, equity participation and other ways to strengthen the cooperation with the upstream and enhance industrial early warning and risk control capabilities.
Fourth, broaden the profit model.Based on the current status of the popularization of smart TVs, color TV 整机 enterprises from the simple hardware profit model for the development of hard and soft profit model, increase operating income OTT side.
Fifth, the expansion of overseas markets. The domestic market has been basically saturated, to develop an incremental market center of gravity can be inclined to overseas. It should be noted that the OEM is still the only way the scale of the lack of profits, should strengthen its own brand of global distribution, enhance brand premium Level.
'Smile curve' is very scary for the current color TV enterprises. However, as long as they stick to technological innovation and adhere to the development of their own brands while the industry forms a relatively consistent target of action, they will step out of the bottom of the 'smile curve' and occupy the bottom of the curve High value, not impossible.