Rethinking the thousand yuan machine: the Internet mobile phone squeezes the bubble

A new round of crisis and reflection boom is spreading among mobile phone manufacturers. At the 360 ​​mobile phone conference on January 14, 360 Chairman Zhou Hongyi said in an exclusive interview with the media that the cost-effective play has been invalidated. "If you only do the price/performance ratio, the mobile phone will become lower and lower, and it will not keep up with the goal of consumption upgrade." He questioned whether the thousand yuan machine still has real meaning in the market of "powder turning black" due to the price difference of 100 yuan. Fans on.

More importantly, lack of competitiveness and fans will limit the premium space of mobile phone products, and it is difficult to support true innovation. From the perspective of industry rules, after the characterization of product homogenization is exposed, it is often vicious competition and death. This slowdown in growth is only a process of self-regulation in the industry based on supply and demand. But for companies in the ecology, this will be a cruel and bloody knockout.

Risk of price

Last year, when Zhou Hongyi entered the red sea near the saturated mobile phone, there was a view that the timing was too late, but now it seems that he may have escaped. Early arrivals in domestic mobile phones have kept up with the rising price/performance ratio five years ago. Product line positioning and marketing routines have solidified here, and inevitably fell into the quagmire of thousands of yuan.

The flagship version and the geek version of the Qiku series released this round, positioning the high-end market, the price is 2499 yuan and 2999 yuan. Zhou Hongyi's idea on the mobile phone is to upgrade the software hardware under certain cost and develop more common and detailed functions to bind users, such as fingerprint dial-out, call recording, super private space, etc. .

In public, 360 has so far avoided the overall sales of Qi Cool Mobile last year. According to Zhu Fanghao, president of 360 Mobile, Zhou Hongyi has changed the previous style since he started the mobile phone, and did not set a specific sales target for the team. However, 360 is not the only mobile phone manufacturer that is playing down sales. After the transcripts of the past year, this year, the price/performance ratio and sales volume have become the topic of collective reflection of mobile phone manufacturers.

At the annual meeting of Xiaomi Company in mid-January, Lei Jun mentioned that the sales of Xiaomi’s mobile phone 70 million were “not OK”. This year, about Xiaomi "no longer has a fever" "product rhythm is chaotic" "is a reeling machine" and so on. Lei Jun came to a conclusion: Xiaomi has a heart in his heart. He pointed out that under the pressure of 80 million sales forecast at the beginning of the year, Xiaomi's movements were distorted.

In 2015, after the sales of the thousand yuan brand charm blue will be 440 million to 20 million, Meizu founder Huang Zhang has not been stunned, Meizu's sales target in 2016 only increased by 5 million. In the media communication meeting, Li Nan, vice president of Meizu, even put forward a point of view: the price is dangerous.

"This is not a fear of sales, but a fear of against the market. In the market changes, they are a manifestation of risk control." Sun Qi, deputy general manager of Sino Research.

In the sense of crisis of mobile phone manufacturers, profit is a factor that cannot be ignored. The Qianyuan brand is dominated by Internet companies, and its early low-cost and high-configuration model often needs financing support. "After the Internet manufacturers came out, most of the thousand yuan machines were built around cost pricing, cost plus a little profit, and did not make money. I hope to increase the scale in the future." According to Sun Qi, the average gross profit of the thousand yuan machine manufacturers is lower than 10%.

In 2015, various manufacturers generally used the latest hardware, the highest configuration, and the most cost-effective marketing. When the hardware competition seems to be indistinguishable, the curved screen, metal body and narrowest frame on the appearance have become new competitive hotspots. Some manufacturers even had a new model in January, and they were pushed to the market after a slight change from the previous one. The hardware configuration and technology of the thousand yuan machine has little room for competition. In order to avoid homogenization, manufacturers are keen to spend research and development expenses in irrelevant places, but have little effect.

"Domestic mobile phones are still relatively rare in real product innovation. So it is easy for everyone to make up for innovation in products through innovation in marketing and business models," said Zhou Hongyi.

Long-distance running depends on capital support

"The problem now is not whether manufacturers can make high-profile products, but how to solve all kinds of small problems. These things are hard work." Telecom expert Xiang Ligang gave an example: Apple The effect of 8 million cameras can outperform other manufacturers' 13 million cameras, which is not a problem at the hardware configuration level. The small problems in the use of mobile phone products are endless, and the software can be continuously optimized on the hardware, and the software can be written into the hardware.

"Huawei has thousands of people doing research and development, and some 800 people do research and development. Even some ODM products have only 50 people doing research and development. The 50-person R&D team has no problem in making basic configuration, but it solves all the problems. It is impossible, and this is the basis of (competition of mobile phone quality)." Xiang Ligang said.

And if we analyze from the perspective of capital, the thousand yuan machine faces technical bottlenecks, and there are also reasons to follow. Further increase in research and development requires additional capital investment. In the cold winter of capital, the C and D rounds of financing are narrowing. The mobile phone industry is not only risky, but the level of financing demand is far greater than 10 million. Therefore, there are not many manufacturers who say that they must increase investment and make high-quality mobile phones. However, Luo Yonghao may only be the one who really wants to hit the south wall. To this end, he is often questioned by investors, in this age of super cost-effective concept, creating a boutique mobile phone is an untimely practice.

But in fact, in the eyes of many people, Luo Yonghao’s thinking is not wrong. "Lao Luo is right, it is too bad luck." Zhou Hongyi is evaluating. Sober is not only Lao Luo, such as Meizu, last year forced the pressure of shipments to be too small, with the introduction of thousands of yuan charm blue. After the sales volume hit 20 million, this year's plan is to return to the middle and high-end positioning.

"Xiaomi has already killed the cottage manufacturers, grabbed market share from them, this historical process has been completed, and the demand has been released, and the opportunities behind it are in the middle and high-end market." Xiang Ligang said.

But the road to high-end transformation is not good, let's see Huawei. In the industry's view, Huawei's Mate1, Mate2 market reaction is not obvious, until Mate 7 scored 7 million shipments, Huawei's high-end model brand is considered to be established. For this product, Huawei's initial estimated internal shipments were only 2 million. The sudden outbreak of sales can be said to be unexpected and reasonable.

The high-end transformation of the past five years has not been smooth for Huawei. In 2011, Huawei gradually separated from its dependence on operators, transformed into a consumer brand, and positioned itself in the mid-to-high-end boutique market. The "China Business News" reporter learned from the relevant person in charge of Huawei's consumer business that according to this strategy, Huawei's mobile phone models have been reduced from 75 to 20 in five years. "Innovation is a long-distance running. Huawei invests at least 10% of its sales revenue each year for research and development," said the source.

In two years, Huawei mobile phones have suffered huge profit margins. Yu Chengdong, head of Huawei's consumer business group, once said, "That two years are too bad. The profit margin of mobile phones is not as good as the bank loan interest rate. If you deposit the money in the bank, the interest will be higher than the profit of the mobile phone."

Huawei's mobile phone can survive the five-year transition period and cannot be separated from the financial and technical support of Huawei Group. However, for the thousands of machine manufacturers who are not hard enough to rely on the mountain, this transformational road is even more difficult.

Channel sinking resistance

Data shows that in 2015, Huawei's mobile phone shipments reached 108 million units, up 44% year-on-year; OPPO smartphone sales exceeded 45 million units, up more than 50% year-on-year; VIVO's vice president and CMO Feng Lei previously revealed that last year's shipments The quantity exceeds 40 million units. The above data has made Huawei, OPPO and VIVO, which are low-key styles, a new round of sought after objects.

"Mobile phone shipments declined for the first time in 2015, which is a negative growth compared to 2014. The domestic mobile phone market is becoming saturated, and the existing new points (innovation points) are not enough to bring strong intelligence to the thousand yuan. The need for change of the machine." CCID Consulting, senior analyst of CCID Consulting Internet Research Center, said in an interview with the "China Business News" reporter.

In addition to emulating the high-end transformation of Huawei, there is still a way out for the thousand yuan machine. There are still needs to be reclaimed in townships and towns such as the third to sixth lines, and there is room for expansion of the thousand yuan machine. Both VIVO and OPPO have tasted the sweetness in the sinking of the channel in 2015. Cool, Jinli, Huawei, and Xiaomi also began to work hard on channel layout.


However, this market also has potential rivals. When Chen Changhui investigated in the township area, he saw a phenomenon: a group of companies or channel operators who had previously thought that mobile phone manufacturers would make a living for themselves, now tend to switch to OEM phones. "For them, the profit is very high, the same 1,500 yuan price, the cost is only 700 ~ 800 yuan, the profit rate can reach 50%."

This is an industry phenomenon in the consumption upgrade. The strong bargaining power of the thousand yuan machine manufacturers squeezes the profits of the foundry factories. In Shenzhen, the average profit of the foundry factory is only 2% to 3%, and there are many people who pay for the order. At the same time, the rapid iterative upgrade of the mobile phone technology has led to the elimination of a large number of production lines and equipment because it is difficult to meet the needs of mobile phone manufacturers. Jumping out of OEM production is a living road in the short term.

Although the above-mentioned OEMs are like cottages in the past, there is almost no brand competitiveness in the first- and second-tier markets, but the mobile phone retail industry in townships and towns has its own rules: the advantage of these local snakes is that they have a closer relationship with local channels. It means more opportunities to enter the store and be sold to consumers.

Perhaps with the brand advantage and the trend of consumption upgrade, the thousand yuan machine will eventually win, reproduce the situation that China Cool League has killed the cottage. But this battle can still not be skipped. Because waiting for the e-commerce channel to sink, it will take time. The layout of the store by sinking channels means more manpower and rental costs.