Xiaomi's "three-year contract": mobile phone topping and mass production of cars

Lei Jun, born in 1969, has passed the year of knowing his destiny this year. When many entrepreneurs of the same age began to retreat behind the scenes, Lei Jun was still happy to run on the front line.

In Lei Jun's bones, there was a love to toss. A few days ago, at the 10th anniversary dinner of Shunwei Capital, Lei Jun said, "My two years seem to have been consumed with the 'tenth anniversary', last year was the tenth anniversary of Xiaomi, not long ago I was the tenth anniversary of Jinshan chairman, and today is the tenth anniversary of Shunwei." ”

Multiple lives have shaped today's Lei Jun, and Jinshan, Shunwei and Xiaomi can just represent Lei Jun's three life experiences.

In The time in Kingsoft, Lei Jun became one of the earliest Internet practitioners in China, and also became a business manager; Shunwei, representing Lei Jun's identity as an investor, in 2007, the 37-year-old Lei Jun left Kingsoft and transformed into a full-time angel investor.

And millet is the keyword of Lei Jun in the past decade. It has witnessed how a layman started from scratch and in turn turned the entire Chinese smartphone market upside down.

In the past few years, "mobile phone × AIoT" is the core strategy of Xiaomi's development, and on the occasion of Xiaomi's tenth anniversary, Lei Jun said that "mobile phone × AIoT" will be the core strategy of Xiaomi in the next decade.

Just when the outside world thought that mobile phones and AIoT were footnotes to the boundaries of Xiaomi's business, "Xiaomi Car" came out of nowhere. Lei Jun said that Xiaomi Automobile will be the last major entrepreneurial project in his life, and he is willing to bet on the full reputation of his life and once again put on the battlefield to fight for Xiaomi Automobile.

The start of the automobile business has made Xiaomi's new decade destined to be extraordinary, and at the same time, it has also made Lei Jun's life answer sheet another fill-in-the-blank question.

Speed up the car

From the establishment of the project at the beginning of the year to the mass production in 2024, Lei Jun has set aside 3 years for himself. This time is enough, but also very stressful.

However, in October this year, Lei Jun revealed at the 2021 Xiaomi Investor Conference that "the progress of Xiaomi car manufacturing is faster than expected." Indeed, since the official announcement of the car on March 30, Xiaomi has made a series of moves in the automotive business.

On September 1, Xiaomi announced that Xiaomi Automobile has completed the industrial and commercial registration, the company is named "Xiaomi Automobile Co., Ltd.", the registered capital is 10 billion yuan, and Lei Jun is the legal representative. Subsequently, the registration place of Xiaomi automobiles concerned by the industry was also officially revealed, and the Beijing Economic and Technological Development Zone became the final winner. On November 27, Xiaomi and the Administrative Committee of Beijing Economic and Technological Development Zone officially signed the Cooperation Agreement.

It is reported that the Xiaomi Automobile Project will build the Xiaomi Automobile Headquarters Base and sales headquarters and research and development headquarters, and will build a vehicle factory with an annual output of 300,000 vehicles in two phases, of which the first and second phases of production capacity are 150,000 vehicles, and it is expected that the first car will roll off the production line and achieve mass production in 2024.

After settling down, the Xiaomi automobile project only needs to break ground. Before the completion of the factory construction, Xiaomi Automobile still has a lot of preparatory work to do.

It is understood that in the 5 months since Xiaomi announced the car to the official registration of the company, the Xiaomi auto team has conducted a large number of user surveys and industrial chain inspections, conducted more than 2,000 research interviews, visited and deeply communicated with more than a dozen industry peers and dozens of industrial partners.

At the same time, promoting the product definition and team building of the car is also the core work of Xiaomi Automobile. In July this year, Lei Jun distributed hero posts for Xiaomi Auto's autonomous driving department through Weibo; in August, Xiaomi President Wang Xiang revealed that since the start of car manufacturing, Xiaomi has received more than 20,000 resumes, and after careful selection, it currently forms a team of about 300 people.

In November, Xiaomi disclosed in its Q3 financial report that there were more than 500 members of Xiaomi's auto business team.

For any business, people are the key factors that determine its success or failure. In order to focus more on car building, Lei Jun is also tilting more energy to the automobile business.

Since October this year, Lei Jun has successively withdrawn from the management positions of a number of Xiaomi-affiliated companies. In this regard, Wang Hua, general manager of Xiaomi's public relations department, responded on Weibo on December 14 that this is a normal change. "Mr. Lei's energy this year is mainly focused on car-related matters, and executives can already share some of the relevant work and responsibilities. It's a gesture, but it's also an action. ”

In addition to Lei Jun, Li Xiaoshuang, general manager of the major appliances department of Xiaomi Group, has also been appointed as the vice president of Xiaomi Automobile, responsible for products, supply chain and market related work. In addition, the 21st Century Business Herald reporter learned from informed sources that in a personnel adjustment carried out in early December, Xiaomi announced that Ye Hangjun would no longer concurrently serve as the chairman of the group's technical committee and focus on the automobile business. And he is mainly responsible for xiaomi car self-driving team.

In terms of product definition of automobiles, Xiaomi Automobile, in addition to relying on its own team, is also accelerating the progress of technology research and development through investment and mergers and acquisitions. In August, Xiaomi announced that it had wholly acquired DEEPMOTION TECH, a self-driving technology company, for a total transaction of about $77.37 million.

According to the data, Shenzhen Motion Technology is an autonomous driving technology company, focusing on providing algorithms for the perception, positioning, planning and control of advanced driver assistance systems, as well as a full set of software solutions for autonomous driving applications.

For the acquisition, Wang Xiang told the 21st Century Business Herald that driverless technology is the most important core of smart electric vehicles, and Xiaomi is also determined to participate deeply. This acquisition of Deep Motion Technology is hoped to shorten the time for Xiaomi's self-driving cars to go public.

In addition, for the smart car industry chain, Xiaomi has also continuously shot and participated in a number of related companies.

In the sharing at the beginning of the year, Lei Jun admitted that he had hesitated before deciding to build a car, but after making a choice, he was indomitable. The investment plan of tens of billions of DOLLARs in the next 10 years and the decision to build a wholly-owned car are the confidence of Xiaomi's car manufacturing and the determination of Lei Jun.

In fact, for Xiaomi cars, the outside world is also full of expectations. An analyst at Ping An Securities believes that the first round of new car-making forces has started from electrification, and some companies have won in stages. The second round of new forces will take intelligence as the core and the barriers will be raised. Enterprises with hardware and software integration capabilities represented by Apple and Xiaomi will enter the automotive field and will open the second round of intelligent new forces.

Mobile phone business topped the top

Although the automobile business has opened the upper limit of Xiaomi's imagination, it is at least three years later, and for now, the mobile phone business is still Xiaomi's basic disk.

In August this year, Lei Jun put forward a goal in his annual speech, that is, in three years, Xiaomi mobile phone won the first place in the world.

This goal was mentioned by Lei Jun as early as 2014. At that time, Xiaomi had just made a mobile phone for three years, and it achieved the first place in China and the third place in the world. At the first World Internet Conference, when Lei Jun was asked what Xiaomi's long-term strategy was, he blurted out, "Xiaomi will become the world's first in 5-10 years."

At the time, Bruce Sevier, Apple's senior vice president sitting next to Lei Jun, then said, "It's easy to say, it's much more difficult to do." His words caused laughter at the scene, and the scene was very embarrassing.

Originally, if you follow Xiaomi's market share in 2014, it is not impossible to hit the world's first place in 5 years. But in 2016, because of supply chain problems, xiaomi mobile phone sales fell sharply.

This makes Xiaomi not only not move towards the world's first, but fall into a life-and-death situation. Later, Lei Jun personally took over the Xiaomi mobile phone department, successfully led Xiaomi out of the trough, and mobile phone sales also returned to the top three in the world.

In 2021, seven years have passed since Lei Jun proposed "5-10 years to become the world's first", if Lei Jun wants to achieve his original goal, the remaining time is exactly three years.

So can Lei Jun achieve this goal this time? At least this year, Xiaomi is showing its best in history and is only one step away from the world's first. According to Canalys, in the second quarter of this year, Xiaomi's global smartphone market share reached 17%, surpassing Apple to become the second in the world.

For the future growth space, Wang Xiang once told the 21st Century Business Herald reporter that the mobile phone market can still see a very large growth space, especially in some overseas markets, the growth opportunities are very large.

However, an industry insider said that Xiaomi wants to hit the world's first, it will not be so easy to achieve, Apple in the high-end market, Ov and Glory in the low-end market, are all strong competitors of Xiaomi.

According to Xiaomi's Q3 financial report this year, Xiaomi's smartphone shipments fell by 5.8% from 46.6 million units in the same period last year to 43.9 million units, and the global shipment ranking fell to third. In this regard, a Xiaomi person told the 21st Century Business Herald reporter that in the third quarter, because there was no big promotion and there were not too many new product releases, it was originally the off-season for the sales of Xiaomi mobile phones.

In fact, because of the problem of the new product release cycle, different manufacturers in the mobile phone industry do have different sales off-peak seasons, and for Xiaomi, Q1 and Q2 are often its peak sales seasons. Therefore, although sales declined in the third quarter, from the first three quarters, Xiaomi's global mobile phone shipments reached 146 million units, which is basically the same as the level of last year.

Therefore, whether the market share of Xiaomi mobile phones can be further improved can wait until the first quarter of next year to observe. But how to hit the world's first in the next millet mobile phone, this question will be more appropriately answered by Lu Weibing.

At present, Lu Weibing is a partner, senior vice president, president of China, president of the international department, and general manager of the Redmi brand of Xiaomi Group, and as Lei Jun turns more energy to the automotive business, Lu Weibing will also become the helmsman of the implementation of the road to the top of Xiaomi mobile phones.

In this year's sharing for investors, Lu Weibing proposed that China's smart phone market has entered the stage of stock competition, and Xiaomi mobile phones mainly face three tasks in the Chinese market: one is from a narrow crowd to a whole population, the other is to change from e-commerce to omni-channel operation, and the third is to achieve high-end branding.

Correspondingly, Xiaomi is covering more people by creating more new product series such as Civi and game series; through the exploration of new retail models, opening up more than 10,000 millet homes and exerting offline channels; and exploring the high-end market through stress testing of high-end products.

In the international market, whether it is the To B market or the To C market for overseas, Xiaomi mobile phones have developed different ways of playing and have achieved good results. According to the Q3 financial report, Xiaomi mobile phone has ranked first in the market share of 11 countries and regions in the world, and ranked in the top five in the market share of 59 countries and regions in the world.

In Lu Weibing's view, as long as Xiaomi is given some more time, Xiaomi can gain more market share in more overseas markets, including brand highlands such as the United Kingdom and Japan, as well as markets with a very low proportion of e-commerce in Southeast Asia, the Middle East, and Africa.

For Xiaomi, whether it is the mobile phone business or the automobile business, it has made a three-year contract. However, the road to the top of the mobile phone is obstructed and long, the road to mass production of automobiles is full of unknowns, whether Xiaomi can create new glory, Lei Jun is full of confidence, but the answer, to give time.