Under the background of hardware convergence, consumers focus on hardware, configuration to brand, experience transfer, and manufacturers pay more and more attention to the value of consumers. High-quality services and content innovation become manufacturers' differentiating forces.
On April 21, the market research institute Sino announced the first quarter of 2018 China's smart phone market report.
According to the report, OPPO, Vivo, Apple, Huawei, Glory and Xiaomi are among the top six, with sales of 18.52 million, 17.34 million, 16.8 million, 14.42 million, 14 million, and 12.37 million, respectively. The sixth to tenth titles are Meizu and Jinli. , Samsung and small pepper, sales are in the million level, the highest Meizu is 39. .1 Million.
This is also in line with the increasingly solid market structure in the domestic market - Huawei (including glory), OPPO, Vivo, Apple, and Xiaomi hold the top 5 in the market, occupying more than 80% of the market share, and the survival space of other manufacturers is increasingly pressing.
In addition, Sino also pointed out that the offline status of Chinese mobile phones has been severely declining. The three-and-four-wire market once saw a 'shopping tide'. Under the deep-growing line, OPPO and vivo's offline sales volume in Q1 fell by 16.8% and 13.8% respectively. %.
GfK pointed out in the 2018 China Market Annual Report that the multi-round industry dividends that have continued to drive the growth of the Chinese mobile phone market in the past few years, such as smart machine replacement, communication standard upgrades, Internet outbursts, and consumer upgrades, have gradually faded out. The new strong driving bonuses have not In addition, under the conditions of saturation of stocks, falling subsidies, rising costs, slowing innovation, and continued decline in consumer enthusiasm for replacement, before the 5G commercialization in 2020, the Chinese mobile phone market began to enter the vacuum period.
Growth freeze period
As the home base of global mobile phone brands in China, the domestic mobile phone market is experiencing a cold winter. The “China Mobile Phone Market Operational Analysis Report for March 2018” conducted by the China Institute of Information and Communications shows that from January to March this year, domestic smart phone shipments This was 81.87 million units, down 27% year-on-year. The industry called it 'the coming of winter'.
Wu Qiang, vice president of OPPO, previously stated that the main reason for the slowdown was the lack of exciting products or innovations on the market and the lack of incentives for active user replacement; the quality of mobile phones has been greatly improved, and consumers have been passively replaced. The number is also falling.
In addition, from the second half of 2016, the TOP5 brand has already begun to solidify. The top brand relies on the advantage of scale of resources and expands across the board, greatly squeezing the living space of 6-10 ranked brands. The brand pattern evolved from an inverted triangle to a T-shaped pattern. It can also be seen from the data of Sinon that the share of the head manufacturers in the 'T' market is further concentrated.
In an interview with a reporter from the 21st Century Business Herald on April 24th, Cellular China’s General Secretary Geng Lao said that, as in the PC industry, the frequency of replacements continues to decline after the market matures. This is the law of industry development. As far as the current mobile phone market is concerned, In relatively mature markets such as China, the United States, and Europe, there is a lack of driving force for consumers to change machines. Therefore, mobile phone manufacturers are making up for shortcomings in the domestic market to tap room for growth.
'This is also a shuffle period, the strong can get a better market share.' Huawei consumer business CEO Yu Chengdong told the 21st Century Business Herald reporter on April 12, after several years of technology accumulation, Huawei's terminal gradually entered the flashpoint. Gradually there will be a stronger competitive release.
In the giant competition stage, the first-line brands can take advantage of their resource advantages to withstand high cost expansion to discover and extract new increments. Small and medium-sized manufacturers are increasingly passive, second-tier brands are struggling in the aftermath of falling behind, and small brands are directly facing a crisis of survival.
Currently, Jin Li, a veteran mobile phone maker, has faced a crisis in the capital chain. Dafu Technology plans to acquire Bailifeng, Meizu executives will be compelled to conquer, 360 and hammer ruthlessly merge, but there is not much concern for them. Letv, Cool, disappeared from the domestic market. The difficult situation of small and medium-sized manufacturers is self-evident.
Due to the highly concentrated resources of mobile phone brand resources, from upstream components and other industries to ODM, the market structure of the mobile phone supply chain is also evolving toward the T-shaped structure. Downstream channels are no exception, due to adjustments in manufacturers' channel policies, rising operating costs, etc. Affected, retail resources will gradually be concentrated at the top. Currently, Jinli’s offline channels for many years are gradually changing hands. It is reported that Hisense and Lenovo are all in contact with Jinli’s agency channels, and some of Jinli’s channels have also turned to sales of Huawei, Glory, etc. Meizu has also shrunk its offline channels and shut down some stores. Some mobile phone retailers recently reported to the 21st Century Business Herald reporter that the market is ruthless.
How to spend the winter
With the increase in the domestic market peaked, the first choice of the sea has become a common choice for manufacturers. At present, overseas markets have become the second battlefield for domestic mobile phone manufacturers. Xiaomi has made great strides in India. After the OPPO test in the Japanese market, this year will also be officially Enter the European market; Glory announced high-profile years ago to re-create a glory in overseas markets. Overseas and domestic sales accounted for half of the total in 2020.
In addition, in the context of hardware convergence, the focus of consumers is gradually shifting from hardware, configuration to branding, experience transfer, and manufacturers are paying more and more attention to the value of consumers. High-quality services and content innovation have become the points of differentiation for manufacturers.
Taking Apple as an example, software and services have already become an important source of income for Apple. Investment Bank predicts that the gross profit of Apple's software service business will be as high as 60%, which is almost twice that of its hardware business. Huawei is also emulating this idea in its layout, cloud services. It is becoming a new growth point for its consumer business. It is reported that the number of Huawei terminal cloud service users exceeds 340 million at present, and that partners share revenues of approximately 4.5 billion yuan in 2017. An OPPO employee also told 21st Century Business Herald reporter that the OPPO will be held this year. Increase investment in personnel and resources in software, and tap the benefits of software.
At the retail end, GfK believes that this year's competition points to new retail online. According to data from Sino, in the first quarter, both Huawei and Glory have shown growth momentum, and OV has experienced a decline in sales. At present, OV faces more Big pressure.
According to Zhu Ping, president of Huawei's consumer business in Greater China, Huawei’s channels are also undergoing quality upgrades in addition to volume growth. Huawei hopes to try the concept of “big service”, which includes channels, retail, after-sales, communications, and membership. Full Scene Experience Service. Starting this year, Huawei will also conduct new experience stores in the form of smart living museums. In the future, it will comprehensively promote the transformation and upgrading of stores.
In fact, the OV channel is also evolving. Take OPPO as an example. At the end of 2017, it opened the world’s first super flagship store in Shanghai. At that time, Wu Qiang introduced the 21st Century Business Herald reporter. From the perspective of distribution, OPPO The channels are already deeply rooted. Next, we will optimize the cooperation stores including specialty stores, reduce the number of stores that do not meet the requirements, and open some stores with better images. Of course, the process of updating the brand and upgrading the sales model is bound to The sales side brings some pressure.
Returning to the product itself, the era of full screen, the hardware itself can be fully converged, and the space for innovation is extremely limited. Currently, new technologies mainly include FaceID, wireless charging, waterproof, under-screen fingerprints, etc. In addition, Huawei, Samsung, and Apple are all exposed to foldable. Mobile phone R&D, grabs the initiative for innovation. A domestic display manufacturing company employee explained to the 21st Century Business Herald reporter that the flexible screen itself is ready for commercial use, and the company itself is also cooperating and testing with mobile phone manufacturers. The main problem is to wait. Flexible battery, circuit board, including the entire industry chain maturity.
Although the era of 5G that is expected to bring about replacement power is approaching, Huawei, OPPO, and Vivo are all deploying 5G terminals. However, it is still unknown whether 5G will bring much improvement to the market. On April 22, the Ministry of Industry and Information Technology said that the earliest The 5G terminal with demonstration application capability will be launched in the second half of 2019, but it needs to be tested by the operator's network before it is used by ordinary consumers. Currently, for the mobile phone manufacturers in the cold winter, the cruel elimination is not Will stop.