Recently, Zhihu Big V Anhu Du Protector Shi released the retail position of the Chinese mobile phone market in September 2021, and the data showed that in the price segment of 4000-5000 yuan in the Chinese market, vivo ranked first with a market share of 24.1%, followed by Huawei, Apple and OPPO.
Vivo's ability to win the first place in the high-end market of immortal fighting is enough to prove that its brand influence is greatly improving. However, in the ultra-high-end mobile phone market of more than 6,000 yuan, domestic brands including vivo are basically marginalized, and Apple is still a monopoly.
Foreign giants create profits and domestic brands go by volume, which is a summary of the characteristics of the global mobile phone industry.
In terms of smartphone revenue and profits, Apple can be said to be unsurpassed. According to data released by CounterPoint, in the second quarter of 2021, the iPhone's share of the global smartphone market was 15%, but it won 75% of the profit of the global smartphone industry.
For domestic mobile phone manufacturers, how to break through this dilemma and accelerate penetration into the high-end/ ultra-high-end market is a big problem.
Supply and demand at both ends of the upgrade, high-end is the trend of the times
High-end has become one of the high-frequency keywords in the smartphone market in recent years. On the one hand, with the upgrading of China's consumption structure, the increase in per capita income, and the increasing demand for high-quality life by consumers, they have begun to pursue a more extreme machine experience outside the basic configuration; on the other hand, driven by the 5G wave, the price of mobile phone terminals has risen, and the high-end market scale of 5,000 yuan and above is constantly expanding.
In the process of gradually migrating to the high-end market by changing machines, domestic mobile phone manufacturers have also begun to march towards the high-end market. Of course, in addition to the structural upgrade of the consumer side and the supply side, manufacturers are fully impacting the high-end, and there are two factors that cannot be ignored:
First, after the brutal growth of the last golden decade, the global smartphone market has become saturated. In Q4 2017, the overall shipments of the smartphone market declined for the first time. Now in Q3 2021, the global mobile phone market is still in a downturn, with shipments down 6% year-on-year.
At the hardware level, it is difficult to see revolutionary innovative technologies for the new machines currently listed, and most of the so-called innovations are mostly strange and clever, and manufacturers want to break through the dilemma of insufficient innovation in the mobile phone industry, and they need more talents and capital investment.
In the face of the scissors difference formed between the decline in overall mobile phone shipments and the continuous increase in innovation costs in recent years, manufacturers urgently need to shift the competitive dimension upwards to increase sales and profit margins.
Secondly, in the white-hot stock market competition, manufacturers need to form a circuit of "penetration into the high-end market - enhance profitability - increase investment in research and development - enhance product innovation - enhance market competitiveness - take more revenue and profits - continue to increase investment in research and development", and use the flywheel effect to promote the healthy and long-term development of the brand.
In all industries, relatively reasonable profits can support continuous investment in technology research and development, and innovative technologies can bring huge returns. A realistic case is that in 2018, vivo was the first mass production screen fingerprint mobile phone X20Plus screen fingerprint version in the world, and completed the industry-leading six screen fingerprint technology iteration upgrades in about a year, and the screen fingerprint technology was the first to be adopted, so that vivo achieved sales growth in the cold winter of the smartphone market in 2018.
As a fingerprint chip supplier of vivo mobile phones, the application of screen fingerprints has also led to the outbreak of its performance. In the fourth quarter of 2018, Huiting Technology achieved revenue of 1.356 billion yuan, an increase of 64.19% year-on-year; deducted non-net profit of 404 million yuan, an increase of 235.16%; in addition, due to the accelerated popularity of screen fingerprints, Huiting Technology became the first Chinese local chip manufacturer with a market value of 100 billion yuan in A-shares.
In summary, whether from the perspective of users, industries or brands themselves, the high-end road must be taken.
International giants are entrenched, how does vivo stand firm in the high-end market?
The high-end market is difficult to climb, and the industry knows it. Not only do we need sufficient external opportunities, but we also need to have strong own strength.
Samsung can beat Nokia, won the title of the world's largest smartphone brand, thanks to the era of functional machines to smart phones, the former overlord Nokia lacked agile response to market changes, and eventually declined; Huawei can split the domestic high-end market in half with Apple, which stems from the continuous explosion of Samsung Note7 to reshape the industry pattern, and finally let Huawei successfully eat 80% of Samsung's domestic high-end users.
In the past two years, domestic mobile phone manufacturers have attacked the high-end market group, but also because a new window of opportunity is opening to them. First, under U.S. sanctions, Huawei suffered chip outages, and was forced to give up a large blank share in the high-end mobile phone market; second, the 5G era is advancing rapidly, and the mobile phone industry is in a large-scale 5G replacement cycle, and the report predicts that the sales of 5G mobile phones will reach 539 million units in 2021.
However, external opportunities alone are not enough, the key is to have the ability to compete with high-end players.
In the global high-end market, apple and Samsung have long been entrenched in the two giants, domestic manufacturers to attack this market upwards, it is inevitable to compete with the two directly, which requires domestic manufacturers must have more solid technical reserves and relatively long-term goals. It is worth mentioning that some forward-looking manufacturers have long been ready for combat, such as vivo.
At the first vivo innovation day in the past two years, Hu Baishan, executive vice president of vivo, clarified the strategic positioning of "vivo is a technology company driven by extreme products and with intelligent terminals and smart services as the core".
As a technology company, technological innovation is the driving force behind vivo's sustained and rapid development in the past decade, all the way to become China's largest and the world's top five smartphone brands. Without strong technical reserves and technological innovation, vivo has no foundation and ability to support product innovation, and thus cannot defeat many of the world's top enterprises.
As early as 2019, after gaining insight into the original needs of consumers, vivo clarified design, imaging, system and performance as the company's long-term cultivation of four long-term technical tracks, and relying on its intelligent R&D centers in 10 cities such as Shenzhen, Shanghai, Beijing, Hangzhou, Taipei, Tokyo, Japan and San Diego, as well as more than 10,000 global outstanding R&D personnel, to carry out continuous innovation.
Public information shows that in 2019 alone, Vivo invested more than 10 billion yuan in the field of scientific and technological research and development. Focusing on technology research and development, vivo has also landed many innovative achievements in leading industries.
In 2019, vivo became the first batch of manufacturers to release 5G mobile phones, promoting the popularization of 5G technology and the development of the industry;
In 2020, vivo pioneered micro-PTZ stabilization technology in the world, which has since opened the era of "stereoscopic image stabilization" of mobile phone images;
In 2021, Vivo independently developed the first professional imaging chip V1, realizing a professional and humanized mobile phone imaging experience.
With profound technological innovation in the fields of 5G communications, chips and imaging, vivo imaging flagshipSYSYSYS50 series, X60 series and X70 series have won the recognition and support of more and more high-end user groups. According to the data released by the governor of Anhu Prefecture, in September this year, Vivo soared by 217.5% year-on-year in the ultra-high-end market of the 5000-8000 yuan price range, and 82.4% year-on-year in the high-end market of the 4000-5000 yuan price range.
The rapid growth in the ultra-high-end market is gratifying, but vivo naturally values not the gains and losses of one city and one pool in the short term, but the future-oriented and long-term technology strategy roadmap.
For example, for 12-36 months of product planning and realization, vivo mainly through product planning - technical planning - technical pre-research of the "product triangle" form; for more than 36 months of technical planning, vivo set up the Central Research Institute, committed to new product form tracking research, domestic and foreign industry cutting-edge technology scanning, chip and other fields of technical layout.
In the context of "Made in China" towards "Made in China", for domestic mobile phone manufacturers such as Vivo, if they want to seize the most profitable high-end market and strive for breakthroughs in the field of technology, it will be the key to victory.