Text/Li Xiaoyang
Editor/Wang Yang
Duan Yongping, the "OV spiritual mentor" who has been away from the arena for a long time but has been active in the Xueqiu community, once reposted a questioning post from a netizen, saying, "My thoughts are the same as yours, and I don't quite understand why OPPO will produce a TV."
This kind of judgment seems to have laid the groundwork for OPPO's twists and turns in making TVs later.
A few days ago, some media revealed that OPPO has recently re-optimized and adjusted the personnel of the IoT business group, discounted the year-end bonus by 30%, and the TV business line of the smart display business unit will be abolished. In this regard, OPPO's response is: "The business is running normally, and the relevant rumors are not true."
Since entering the IoT field in 2019, OPPO's development in the IoT field has been full of twists and turns. Compared with its competitors, OPPO is a late start and slow pacer in this field. At that time, the market was already occupied by early entrants such as Huawei and Xiaomi. From the perspective of the outside world, OPPO is not so much taking the initiative to attack, it is better to say that it cannot do it.
OPPO's principle of "selling a single product well" in the field of smartphones seems to have failed in the field of IoT. This can be seen from the deployment of products in the IoT field: watches, bracelets, earphones, TVs, AR glasses and 5G CPE routers, etc. The so-called "ecological cover" is not required. And this is obviously contrary to the original intention of "Internet of Everything".
Especially in the field of smart TVs, OPPO encountered even greater resistance. Compared with small items such as watches and earphones, smart TVs have higher entry barriers and the need to involve upstream and downstream supply chains is more complicated. Compared with traditional TV companies and their opponents who have been in the market for six or seven years, OPPO is struggling. Coupled with changes in the external environment, the overall color TV market has entered a downward space, and this once promising category has not been able to develop.
There are only 2 smart TVs for sale in the OPPO mall, the source of the picture is the official website of OPPO
For four years, there have been constant rumors surrounding OPPO's IoT business. In 2021, many media reported that OPPO began laying off employees in July, involving IoT, soft industry, Internet business and other departments, with an average layoff ratio of 20%. And this time, it was reported by the media that the overall TV business of OPPO was abolished.
In this regard, the outside world has to question whether this is a necessary ordeal for growth, or is it a signal that they will be given up?
OPPO's IoT layout failed to break through
Looking at the background of the big market, the IoT industry has a bright future, but OPPO's IoT layout has been tepid.
IoT Analytics research data shows that in the past ten years, the number of global IoT connections has maintained a compound annual growth rate of 30.8%, far exceeding the compound annual growth rate of 9.4% for the total number of connections.
In China, around 2013, with the joining of giants such as Xiaomi and Huawei, this track became extremely hot. In the ensuing six years, the industry developed rapidly. According to data from the China Communications Industry Association, the scale of my country's Internet of Things industry has grown from 489.6 billion yuan in 2013 to 1.5 trillion yuan in 2019.
By 2020, there will be a new signal for the industry to really take off: the number of global IoT connections exceeds the number of non-IoT connections for the first time, reaching over 11.7 billion. The huge commercial value hidden in the Internet of Things has been truly revealed, and the IoT has also ushered in a stage of rapid development.
Mobile phone manufacturers and home appliance giants have always been the core strength of IoT. For them, IoT needs the "nerve center" of mobile phones on the one hand. On the other hand, IoT can connect all home appliances to form an ecology. Theoretically speaking, IoT, a promising market, is an important direction for any player to expand scenarios.
In fact, before OPPO announced its entry into the IoT in 2019, it had already held the ticket. After all, mobile phones have always been an excellent entrance to IoT.
IoT is an important part of the new generation of information technology. The core and foundation is the Internet, which is the extension and expansion of the Internet. On the other hand, the extension and expansion of the user end is between items. As the first stop of IoT landing, the smart home industry has become the first outlet. The "2018 China Smart Home Industry Research Report" released by iResearch predicted that the smart home market will maintain a compound annual growth rate of 21.4%.
Different from a single category in the smartphone market, there are many categories of smart home. Such as smart home appliances, home security, lighting, etc., with more than a dozen key products including smart TVs, smart air conditioners, smart refrigerators, sweeping robots, smart desk lamps, smart speakers, and smart cameras.
From the perspective of user experience, facing such scattered home products, it is natural to need an "entry" to control the whole family, and smartphones take on such a role.
The background and idea of OPPO cutting into the IoT, in fact, like other mobile phone manufacturers, hopes to grab a place in the era of the Internet of Everything.
However, the mobile phone market was not doing well at the time. In the Chinese market, the shipments of mobile phone terminal equipment have been in a downward range since the first decline in 2017, and the pressure on OPPO can be imagined. Therefore, entering the IoT has carried part of OPPO's growth expectations from the very beginning.
But unfortunately, IoT did not bring positive returns to OPPO. According to 36 Krypton's report in 2021, OPPO's IoT business sector has been in a state of loss, with an amount of hundreds of millions. At the same time, Xiaomi's IoT business has quarterly revenue of more than 20 billion yuan and annual gross profit of more than 10 billion yuan.
Soon, OPPO, aware of the crisis, reorganized the IoT business unit into the IoT business group in 2021, and established three business units: wearables (watches, bracelets), smart displays (TVs) and audio (headphones), which are responsible for their own profits and losses.
If watches, wristbands, and earphones are still considered daily "consumer goods" and it is easy to generate revenue, then the replacement cycle and decision-making chain for large appliances such as TVs are longer, and the market itself is more difficult to do.
How difficult is the market? An OPPO employee once told the media: "Our biggest customer is our company." According to the employee, OPPO TVs are used in the meeting rooms of the entire OPPO building. This can also understand the reason why OPPO's TV business has not caused too much splash in the industry.
The reason why it is difficult for OPPO to make a breakthrough in TV is that the right to speak in the game between upstream and downstream is too low. After joining the category of smart TV from OPPO, it is in a special cycle of shortage of upstream and downstream resources in the color TV industry, especially in the rising cost of LCD panel procurement and OEM "processing". Since it did not have its own R&D and production capabilities, and as a "newcomer" with no market size at that time, OPPO had almost no bargaining power in the market.
In order to break the situation, OPPO adopts a two-legged model in the self-developed TV model and the model of cooperation with third-party home appliance companies. This choice also makes its TV business path more and more blurred, and it is even considered a left-handed fight.
In addition, from the perspective of the external competitive environment, in addition to the smart hardware revenue of smart TVs, Xiaomi TV also has membership income, as well as the ecosystem effect brought about by Xiaomi’s ecological interconnection. Looking at OPPO TV from this point of view, its content ecology also shows a weak trend.
step by step, step by step
Within OPPO, "duty" is a very important corporate culture. What is "duty"? "Being user-centered, not being affected by external things, doing what you should do well, to the extreme, there will always be a place for you in the market." Previously, OPPO founder Chen Mingyong had repeatedly emphasized the importance of corporate culture. Importance, and personally gave the interpretation.
The implication is that OPPO has been going its own way. This kind of corporate culture has enabled OPPO to have a good effect in the breakthrough of single products, but it has not allowed OPPO to break through in the IoT field.
In the view of Wired Insight, it is not so much that OPPO’s strategic vision is inferior to that of its peers, but rather the hysteresis effect of “dare to be a queen” in its “duty” genes.
At the beginning of 2019, OPPO announced the establishment of the "Emerging Mobile Terminal Division", which is considered by the industry to be the beginning of its official development of IoT. But at that time, Xiaomi and Huawei had already become industry leaders with years of layout, and had completed the transition from laying out single products to proposing smart solutions for the whole house, entering the 2.0 era of IoT.
Let’s look at Xiaomi first. Under the diversified hardware layout, the IoT ecosystem has gradually taken shape. Since the end of 2013, after six or six years of deployment, Xiaomi has formed a business layout of mobile phones + TVs + smart speakers + routers and notebooks + ecological chain enterprises (sweeping robots, rice cookers, refrigerators, etc.). By 2020, Lei Jun, the founder, chairman and CEO of Xiaomi, has set "mobile phone × AIoT" as Xiaomi's core strategy for the next decade.
Let's look at Huawei again. With its years of accumulation in the communication field, Huawei has earlier and deeper deployment in IoT. In its whole-house smart solution released in 2020, it has long been proposed to control two networks (home Internet of Things, Internet) and N sets of systems (covering lighting systems, security systems, etc.) through a host (HarmonyOS central control system). ecology) to strengthen IoT integration solutions.
That is to say, OPPO chooses to enter the market slowly after the peers have lined up for several years and have been allocated the largest cake in the market. According to people close to OPPO, OPPO made great efforts when it entered the market at the beginning, and made great strides in building a team, even poaching people in the market with double salaries.
Even so, OPPO's performance is not impressive. According to the data of Zhongyikang Home Appliances, from January to March 2021, in terms of sales volume, the TV sales of Xiaomi and Honor were 1.1 million and 72,000 respectively, while the sales of OPPO TVs were less than 1,000.
At this time, OPPO seems to have finally realized that it must abandon its "duty" in the IoT business and instead pursue wolfishness. After OPPO made the IoT business unit independent, the comprehensive salary incentives began to be linked to business goals, so as to force the development of the IoT business.
But it was too late.
Even though OPPO launched the TV at an ultra-low price of 1,999 yuan in an attempt to grab the market with cost-effectiveness, the external environment has changed, and it is destined to have little effect. Since 2017, the color TV market has fallen in volume and value for three consecutive years, and the market has entered a new cycle of stock competition and a fixed pattern. OPPO, which has lost the opportunity and lacks technical background and ecology, has no chance of winning in the color TV market.
What lies in front of OPPO is that after entering the TV field for 3 years, the TV product line it has launched is relatively narrow and does not have too many bright spots. It is not really "upper" in the market, and has even reached the edge.
Being independent and responsible for its own profits and losses has also become the inevitable fate of the IoT business.
The road after independence is more difficult
OPPO denied the rumor of "abolishment". But what is certain is that whether it is OPPO or the independent IoT business, life is not easy.
At the beginning of the year, major institutions successively announced the data of mobile phone manufacturers in 2022. Most of the data point to the same result: in the past year, domestic smartphone sales have fallen sharply, and the biggest decline is OPPO.
According to IDC data, OPPO’s shipments in 2022 will drop by 28.2% year-on-year, the highest drop among the top five manufacturers; Counterpoint Research’s report also pointed out that in 2022, OPPO’s sales volume will drop by as much as 27% year-on-year; in addition, in the brand rating agency Chnbrand released According to the recommendation index of Chinese customers for various brands of mobile phones in 2023, OPPO ranks sixth, and ranks bottom among China's top mobile phone manufacturers.
IDC China Quarterly Mobile Phone Market Tracking Report, picture source IDC
For OPPO, the current focus is not IoT, but how to reverse the decline in the mobile terminal market.
At the end of last year, OPPO announced the implementation of a dual-brand strategy, the argument that "OPPO's online is OnePlus", and regardless of the cost, it will give OnePlus a "ten billion subsidy" of 10 billion in three years. In this way, OPPO Group has formed a new product matrix with OPPO focusing on high-end, OnePlus focusing on mid-end and realme focusing on low-end. With full firepower in the mobile terminal market, the emphasis on other businesses has naturally weakened.
The main business is sluggish, and the sideline business must prove its own value if it wants to survive. Therefore, the primary problem facing the IoT business group, especially the TV business, is to prove its value.
But how much is it worth? Market feedback is the best answer. The current market situation and the all-round crushing of friends and merchants have made him breathless. How to win this reversal battle?
The OPPO mobile phone brand has always focused on "products". In contrast, OPPO's layout in IoT has not seen any explosive products. Judging from the fierce competition in the TV field, we can know how difficult it is to break through.
The time goes back to August 2019, when Huawei launched the world's first Hongmeng system terminal "Honor Smart Screen", which successfully triggered a wave of cross-border TV manufacturing. Afterwards, Redmi, OnePlus, and Realme among mobile phone terminal manufacturers have successively joined the battle for smart TVs.
The entry of mobile phone manufacturers has not only brought fresh blood to smart TVs, but also successfully stirred up the entire market through technological innovation, and staged the famous scene of "fairy fighting".
Today, the battle for high-end smart TVs is not only a fierce battle between major brands, but also a dark battle for technology. In addition to the competition between the quantum dot and OLED camps headed by Samsung and LG, as the miniLED and QD-OLED display technologies mature, the technical competition for high-end TVs is also becoming more intense. In the melee of high-end smart TVs, only Huawei and Redmi participated in the mobile phone manufacturers.
The popularity of the 2022 World Cup in Qatar seems to make TV return to the family C position. The monitoring data of Aowei Cloud Network shows that in the 47th week of 2022 (November 14-20), the online market sales of color wires increased by 25.8% year-on-year, and the online market sales of large screens above 75 inches increased by 134.1% year-on-year.
But this does not change the fact that the TV industry as a whole is in the cold. Public data shows that the turn-on rate of TVs in Chinese households has dropped from 70% in 2016 to 30% today. In addition to fans returning to the big screen, more users watch through PCs, mobile phones and flat-screen TVs.
The chill on the sales side is even more pronounced. 2021 is an extremely difficult year for the Chinese TV industry. The retail sales volume of the market fell below the 40 million mark, and the sales volume was 38.35 million units, a year-on-year decrease of 13.85%.
Faced with consumers' restraint on smart TV consumption, manufacturers have no choice but to make a profit. For example, during the World Cup in Qatar, Hisense TV's marketing tactics that cost a lot of money attracted widespread attention. The controversial slogan of "China No. 1, World No. 2" all shows its ambition to be the overlord of high-end TV.
Home appliances need marketing, but also need continuous research and development to produce good products that better meet the needs of consumers. And no matter which side makes the effort, it needs to invest, and the amount will not be too small. From this perspective, the internal and external environment of OPPO's TV business can be said to be very harsh.
Therefore, how long can OPPO's TV business last? This may be a question that the OPPO group also wants to know the answer to.
Being independent and responsible for its own profits and losses, OPPO's original intention may be to stimulate the self-growth of the IoT business group. But on the other hand, it is bound to be difficult for a child who has not yet grown up to earn a living independently. Coupled with the fact that the opponent is extremely powerful, it is already difficult to survive, let alone create value?
But the business world itself is extremely cruel. If OPPO's IoT business cannot prove its value, its ultimate fate may be to become an abandoned child.
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