Shenrancaijing (shenrancaijing) original author | Jin Yunyun editor | Wei Jia
It is difficult for us to experience such an extraordinary mobile phone market as in 2020 again, and the trend of ebb and flow is vividly reflected in one year. Under normal market factors, it is almost impossible for such a big change to occur even at the stage of re-drawing the market pattern from 4G to 5G.
Huawei's mobile phone shipments in the global and Chinese markets
Data source/Canalys
Cartography / Deep Burn
Qualitative changes occurred successively in the European market and the Chinese market in the second and third quarters.
According to data from research institute Canalys, in the second quarter of 2020, Huawei mobile phones won the championship in the global market for the first time, but in the European market, since Google cut off the supply of Huawei in markets outside China last year, Huawei was forced to lose without Google. Foreign users of Family Bucket. In the second and third quarters, Xiaomi’s shipments surged 65% and 91%, pushing Huawei out of the top three. OPPO also jumped into the top five with a year-on-year increase of close to 396% in the third quarter.
Changes in the European mobile phone market in Q2 and Q3 2020
Source/Canalys
Starting in the second quarter, Huawei had to shrink its mobile phone business back to China and become the dominant player in the Chinese market. However, in the third quarter, the supply of chips and panels for Huawei's mobile phones continued to be cut off, and it was unable to perform domestically.
The year-on-year growth rate of Huawei’s shipments in the first three quarters was 1%, 8%, and -18%, respectively. It was the first decline since 2014, and it was a sharp decline. In contrast, Xiaomi became the only domestic manufacturer with growth. , With an increase of 19%, narrowing the gap with the top three.
Source/Canalys
Of course, Samsung has benefited more than any other peers. In the third quarter, Huawei returned Samsung's position as the number one mobile phone in the world. Xiaomi took the third place in the world due to the rapid growth of the European market.
In the first three quarters of this year, Huawei’s overseas market contracted, and the domestic market expanded and then contracted. However, the supply of Android systems and the supply of components were cut off. Both factors may continue for a long time. More than one interviewee analyzed Shenzhen Burns that Huawei’s shipments will plummet in the next quarter, which can even be described as an "avalanche".
Huawei's defeat has allowed its opponents to resume their expectations for the growth of the Chinese market and even their determination to compete in the European market. They have found three common directions: offline, Europe, and impact on high-end chips. When Huawei is out of stock, the offline networks of all brands are becoming denser; when the Indian, Southeast Asian, and African markets become a red sea, they take advantage of the trend to move the midfield battle to the European market where Huawei has temporarily left; and the chip is stuck in the neck. On the other hand, Xiaomi OV is playing a double abacus, focusing on "holding the thigh", of course, it must rely on itself.
Canalys analyst Jia Mo said that Xiaomi has seized the market from Huawei through aggressive play, including investing a large number of professionals familiar with local market operations in various regions to win the trust of distributors and operators. There is also a certain symmetry in the third quarter shipments. Xiaomi's shipments increased by 14.5 million, while Huawei lost 15.1 million units. In Europe, the key battlefield for both parties, Huawei’s shipments fell by 25%, while Xiaomi’s shipments increased by 88%.
You can say that Chinese mobile phone manufacturers are conspiring to divide the battle together, but it is undeniable that this is also a division of powers, and everything is currently changing.
Offline channel warfare: Open a store, open a store, open a store
"Who can eat the market that Huawei has lost is the Chinese boss." Jia Mo said. Yes, a big drama was first staged in offline channels.
Every morning at 10:08, Huawei Mall starts to release the goods, but it will always be out of stock. The models that are in stock are old models or models that are not cost-effective.
At present, Huawei does not have models under 1,000 yuan in the market, and the price is basically concentrated in 1,000-2,500 yuan, but these models are also out of stock in most Huawei stores, and they are not available online; mid-range nova series, some of them Model is out of stock; Huawei’s main battlefield is the high-end series. At present, only the P40 series are available. This is also the only mobile phone that can be shipped among Huawei’s main models. The Mate 40 series is miserable. You can't get the goods.
The senior product manager judge revealed that the latest Mate 40 series, Huawei dealers are divided by unit, often a batch of goods arrives, only one for each store.
Out of stock is equivalent to "catch up" the dealers in disguise. Lin Zhi revealed that Huawei is also opening more non-mobile phones to channel vendors and maintaining cooperative relations with channel vendors.
A Huawei dealer in Zhanjiang, Guangdong, told Shenran that the sales situation in the last six months is very different from previous years. The demand for mobile phones is in short supply. Some people can only change their direction and move towards smart home products. But the mobile phone is an accessory to the smart home after all, and for dealers, expanding the variety means the risk of squeezing goods and occupying funds.
Another Huawei distributor in Shandong said that the era of mobile phone channel dealers relying on "hoarding and reselling" Huawei to make money has passed. The business is very poor. Huawei mobile phones basically cannot get goods from the platform, but from the wholesale market. The price catches up with the online retail price, and you may “run away” within half a year.
He heard from his peers that Xiaomi is the most aggressive offline company this year, but he did not consider relying on it. “Because Xiaomi’s low- and mid-range models have no profit margins, I am worried that Xiaomi will not generously share profits with channels. ".
However, from the perspective of Xiaomi's actions, it is through this year to realize the offline dream.
Xiaomi, which started as an Internet mobile phone, opened its first mall store in Beijing Contemporary Mall in 2015. Lei Jun stated that it will open 1,000 stores in three to four years. However, it was not until the end of 2019 that the number of Mi Homes opened nationwide to 630, and the number of offline stores was only 6,000.
Based on the latest news that the 1000th Mi Home opened in Chengdu on December 2, Xiaomi has added nearly 400 Mi Homes in one year.
One year this year, at least four years in the past. Lei Jun said that he held back things for five years, Lu Weibing came for a year, and a course of treatment was effective. Lu Weibing was named "the leader of the anti-triad team" by netizens. His former owner, Jinli, was once the "king of channels". By any year, the combat effectiveness of "Da Lu Zhihai" began to show up, and he madly opened Xiaomi homes and offline stores . His plan for next year is to open Xiaomi's home to all counties in China. There are more than 2,000 county-level administrative regions in China, and Xiaomi will have to spend 5 times faster to complete the KPI.
Wit Display chief analyst Lin Zhi mentioned that Huawei channel vendors are ready to move and many want to defect to OV, but the OV channel is relatively stable and not easy to enter. After the sale of Honor, some of Huawei's original channel vendors can then rely on Honor.
Because Honor's first priority after leaving Huawei is to seize offline sites and build its own offline retail network system. However, for Honor, there is no need to worry about channel relationships. Many shareholders are offline channel vendors.
OnePlus, which was taken back as a sub-brand by OPPO, used to focus on the online markets in Europe, America and India, but now also wants to break the circle in the Chinese market. For example, in the hottest way in China, find Luo Yonghao to bring the goods live.
A channel dealer in Shijiazhuang, Hebei Province also recently got in touch with people from OnePlus. He recalled that before the offline price of 3000-5000 yuan, many people named Huawei, and now they will also consider OnePlus. Senior mobile phone dealer Zhao Yang has also started to sell OnePlus mobile phones for wholesale. He used to be too small to sell, but recently found that the market has begun to accept it.
Nowadays, the mobile phone industry generally believes that product strength, channel ability and brand ability are the three major elements of the success of mobile phone companies. Wang Chao, the founder of Wenyuan Think Tank, believes that OnePlus’ past advantage is product strength. Now that it has increased its channel strength in China, it can use OPPO’s existing channels or its own channels. The only difference is brand strength.
OPPO and vivo are also increasing offline stores, maintaining the traditional style of play in the past few years, and regaining the offline market share seized by Huawei.
More than one mobile phone channel business revealed that in the past six months, the two companies have been accelerating the opening of stores, continuously subsidizing channels, sending personnel to support, and giving certain rent subsidies. "Whether it is a brand store or a mall counter, they are all opened next to each other. If there is OPPO, there will be vivo." Zhao Yang said.
OV's offline capabilities are obvious to all. It has an offline sales network that penetrates into the hinterland of China and has a capillary-like offline sales network. Even the remote sixth-tier villages and towns can see these two figures. Xiaomi’s store target is in thousands, and OPPO and vivo’s offline retail stores are calculated at 100,000.
Coupled with Huawei, which reached its peak in offline sales channels last year, these three are the top three offline mobile phones in China. However, since the second half of this year, the offline networks of all brands except Huawei have become denser.
Huawei dealers in Shandong told Shenran that he plans to stick to it until the first half of next year. This is a kind of venture capital. "Emotionally speaking, if you have earned money from Huawei, do you want to spend time with Huawei? If you run away and Huawei gets up in the future, you may not cooperate with you. But dealers also have to eat Yes, support for half a year and a year. If you can't make money continuously, do you still want to clenched your teeth." Wang Chao said.
Looking for the next granary for shipments
On the basis of consolidating more than 85% of the Chinese market, Chinese mobile phone manufacturers have begun to fight overseas, using more than ten years to successively carve up the Indian, Southeast Asian, and African markets. Two changes have taken place in overseas markets in 2020. One is that in markets outside of China, Huawei has suffered the double blow of Google’s ban and supply cuts, regardless of whether the supply is sufficient or not. The second is that the new midfield battle for Chinese mobile phone brands takes place. European market.
Xiaomi, which is considered a pioneer in overseas markets, entered the Indian market with OPPO, vivo, and OnePlus around 2014, which also ignited the war among Chinese mobile phone manufacturers on this land.
In the third quarter of 2020, according to Canalys statistics, Xiaomi is still the market leader, with an increase of 9%. Samsung regained the runner-up from vivo with an increase of 7%. Vivo and OPPO+Realme gained 16.0% and 27.6% of the market respectively.
Data source: Canalys (OPPO and Realme) graphics / Shenyang
Chinese mobile phone manufacturers have carved up most of the Indian market. From last year to this year, only Xiaomi, vivo, OPPO+Realme, the market share in the Indian mobile phone market has expanded from 60% to 75%, while the Indian giants Mircomax and Intex have long been reduced to others.
In fact, Southeast Asia is an underdeveloped market that Chinese mobile phone manufacturers found earlier. It is relatively fragmented, and it is relatively easy for a new brand to enter.
Xiaomi’s price/performance ratio, OPPO, vivo’s overwhelming advertising, and the mature play of subsidizing offline stores are equally effective in this fragmented market. The local brands are shrinking, especially in Thailand, Vietnam, the Philippines, Malaysia and Indonesia. In the country, the low-end mobile phones of OPPO, vivo, and Xiaomi are dominant, but Samsung is also the most difficult opponent of Chinese mobile phone manufacturers.
Q2 2020 Southeast Asia Smartphone Market Share Source/Canalys
Statistics in the second quarter of 2020 show that Chinese mobile phone manufacturers OPPO, vivo, Realme, and Xiaomi accounted for 61% of the shipments of the Southeast Asian smartphone market in the quarter.
If you look at the African market, you will find that there is another Chinese mobile phone manufacturer TRANSSION on the list of foreign wars.
IDC statistics show that in the smart phone market in the Middle East and Africa, 80% of the demand comes from models below US$200, but for Xiaomi, OPPO, and vivo, the gross profit margin of thousand-yuan mobile phones is low. As early as 2008, TRANSSION, which entered the African market, used four-card four-standby mobile phones, a dark-skinned beautifying license model, and wall-painting to occupy the rural market, and took away Samsung's share with low-end products.
Sources of Vendors in the African Mobile Phone Market / IDC
In 2016, TRANSSION accounted for 7% of the total African mobile phone market share and Samsung’s 31%. By the end of 2019, TRANSSION had a 52% market share in Africa, with Huawei, Xiaomi and OPPO respectively Ranked third to fifth. IDC's latest data shows that in the second and third quarters of 2020, China's four major mobile phone manufacturers have captured 64% of the market share in the African market.
When each blue ocean market becomes a red ocean, Chinese mobile phone manufacturers need to find the next granary for shipment.
Huawei chooses to go to the European market, which is lucrative and high-level of consumption, because it has a deep background in operators. The hometown of Cisco and Alstom for switching equipment is in Western Europe. Starting in 2014, the flagship models are often based on European time. Standard, starting in France, Germany, and Spain.
Xiaomi OV has long been buried in the European market. Xiaomi previously opened Xiaomi homes in Spain and Italy, while OV opened the way for sports marketing. Since its establishment, the OPPO sub-brand OnePlus has been living in overseas markets, mainly occupying Europe and North America. , India’s major markets.
As the senior product manager judge said, the European market as a whole is relatively mature, and the offline dealer network is relatively standardized. It belongs to the market where you can get as much return as you do, and the mobile phone market cannot explode in a short time like the Internet industry. The outbreak must have done a lot of work a few years ago.
But one of the most deadly variables has emerged. Since May 20, 2019, Google has suspended business cooperation with Huawei due to the US ban. Huawei, which cannot use Google GMS, has spit out a lot of market share. In the third quarter of 2020, Huawei’s market share in Europe was only 14%. The figure for the same period last year was 22.22%. A Huawei released 4.2 million units of space in the European mobile phone market. Xiaomi’s market share in this market increased from 6% last year. Increased to 19% in the third quarter of this year.
Jia Mo analyzed that there was a certain symmetry in shipments in the third quarter of this year. Xiaomi's shipments increased by 14.5 million, while Huawei lost 15.1 million units. In Europe, the key battlefield for both parties, Huawei’s shipments dropped by 25%, while Xiaomi’s shipments increased by 88%, making it into the top three in the region.
"The vacancies left by Huawei are the vacancies left by Huawei in the European market, not to seize the market of Apple or Samsung." Wang Chao also said that Huawei is difficult to recover in the European market for a while, so Xiaomis are safe for the time being. As it became denser, the goal became radical.
In May of this year, OPPO announced a partnership with Vodafone, Europe's largest mobile operator. A few days ago, Xiaomi CEO Lei Jun said, "The goal is to rank first in Europe in the next few years." Five days later, Vivo announced its further expansion in the European market, officially entering France, Germany, Italy, Poland, Spain and the United Kingdom, and cooperating with UEFA. Wu Qiang, Vice President and Global Sales Director of OPPO, stated that OPPO must master at least Europe by 2021. % Of the market share, while becoming the leader in the European market in the next 3 years.
A relevant person in charge of a mobile phone manufacturer stationed overseas said that especially since this year, the frequency of business trips to European countries has greatly increased. Xiaomi Overseas is divided into three regions, the first is the Southeast Asian market; the second is the five-year-old Indian market; the third is the official entry into the European region for more than a year.
But in general, many interviewees mentioned that Xiaomi still has to learn from Huawei when it comes to the European market, fight channels, work slowly, and pay more attention to this market.
Chips hold their thighs, but also on their own.
"Samsung has benefited more than any other industry from the continued Huawei ban," said Li Subin, an analyst at Daishin Securities. In the third quarter of this year, Samsung Mobile regained its leading position in global smartphones, and the market share gap with Huawei widened to about 8%. According to the provisional data released by Samsung Electronics for the third quarter of 2020, the sales of the mobile phone business accounted for about 30% of the total sales, and the operating profit was 4 trillion won (nearly 24 billion yuan), more than double the second quarter. Some analysts predict that this driving effect is likely to continue into next year. In this regard, Samsung is also expected to increase sales in the face of strict U.S. supervision by rival Huawei, and its smartphone shipments will increase to 300 million units in 2021. In 2018, Luo Yonghao once said: "Huawei's high-end phones are all Samsung users." And now, Samsung has the strength to carve up a part of the high-end flagship mobile phone market that Huawei was forced to leave. Huawei does not have the ability to manufacture chips other than high-end chip design. Previously, high-process chips were handed over to TSMC and some mid-range chips were produced by SMIC.
Samsung also has chip design, R&D and manufacturing capabilities. Although TSMC is more mature in chip technology and launched earlier, such as the 5nm process, TSMC achieved mass production in August this year, while Samsung was nearly three late. In December, brought the 5nm flagship chip Exynos 1080.
There are even voices that Samsung’s high-end mobile phones may take the opportunity to recover in the Chinese market. And local mobile phone manufacturers in China need to work harder. Judging from recent actions, Xiaomi OVs are playing double abacus, focusing on "holding the thigh", and of course they must rely on themselves.
Source / Unsplsah
On December 1, Qualcomm released the Snapdragon 888 processor. Many domestic mobile phone manufacturers announced for the first time that they will soon launch mobile phones equipped with this processor, but Xiaomi’s word is "first launch", and many other manufacturers The term is "the first batch." Lu Weibing, president of Xiaomi China, specially emphasized that there is a gap between the first batch and the first batch.
Vivo chose Samsung. The Samsung Exynos 1080 chip is jointly developed with Vivo, and the new Vivo machine will be the first to be released. Another media report said that next year Samsung plans to supply its Exynos chips to other Chinese mobile phone manufacturers such as Xiaomi and OPPO.
From the judge’s point of view, it is difficult to maintain price competitiveness and shipment stability only by squeezing profits. The true competitiveness needs the support of the supply chain, and the internalization of the mobile phone supply chain is the component. Self-study.
Among domestic mobile phone manufacturers, in addition to Huawei, Xiaomi and OPPO have also disclosed chip research and development projects. But so far, only Huawei has developed and successfully commercialized its own chips.
In 2017, Xiaomi released the first self-developed mobile phone chip Surging S1 and applied it to Xiaomi 5C phones. Since then, most of Xiaomi's models are still equipped with Qualcomm chips. Although Lei Jun said this year that he has not given up on his self-developed surging chip, and the project is still in progress, it has been more than three years since the first generation was released. During this period, the news about the surging S2 was tapeout, failure, and abandoning the cycle.
In this regard, the judge said that self-developed chips have been unable to be commercialized for six years. It is not so much a problem of technology and capital as a problem of courage and route.
Following Xiaomi, OPPO has also embarked on the road of self-developed chips. In 2019, it began to recruit engineers from Qualcomm, MediaTek, and Spreadtrum, and established a technical committee. In February this year, OPPO’s internal article published the self-developed chip plan "Mali "The Yana Plan", in December this year, OPPO founder and CEO Chen Mingyong announced that in the next three years, 50 billion yuan will be invested in technology research and development, part of which is aimed at 5G.
The self-developed chip project named after the world's deepest trench is hard to imagine. "The initial investment in self-developed chips is very large, it is like a bottomless pit, and the risks are extremely high." This analogy of the judge is equivalent to the courage of mobile phone manufacturers to use the market share of several generations of products to smash it (chips) for many years. Undertake various quality and delivery problems caused by immature products. Wang Chao also said, "Selling Qualcomm chips now is simple and can be blown out, everyone agrees. But mobile phone manufacturers with certain ambitions will definitely make self-developed chips." "In the final analysis, whose product can replace Huawei's Mate series and P series, then this market is yours. But now in the market, there is no substitute." Wang Chao predicted that each company will target Huawei for 6,000 yuan next year. In the above-mentioned vacant markets, higher-end mobile phones were launched to fight a "turn over" battle.
*The title picture comes from Unsplash.