Text/Yang Jianyong
Just recently, at the Xiaomi new product conference, Lei Jun claimed to invest more than 100 billion yuan in research and development in the next five years, die hardcore technology, and officially benchmark Apple, learn from Apple, and achieve the world's first mobile phone sales in three years. The underpinning behind this is that it has a wide range of users around the world. Xiaomi's MIUI has more than 500 million active users worldwide, and it has increased investment in research and development, seeking breakthroughs from technological innovation and bringing users an excellent user experience, thus entering the high-end mobile phone market, which is the courage and confidence of apple.
Prior to this, the global mobile phone market, in the past few years, Huawei is Apple's most powerful competitor, once achieved a surpass in the global market, and directly chased Samsung. Benefiting from the success of the mobile phone market, Huawei's revenue scale is growing day by day, and it has maintained a steady growth trend after its revenue exceeded the 100 billion US dollar mark in 2017. Revenue will grow to $136.7 billion by 2020. Unfortunately, due to the impact of chip restrictions in 2021, mobile phone sales have shrunk sharply, which has also dragged down the overall revenue. For the full year of 2021, Huawei expects revenue to be RMB634 billion, down RMB257.4 billion from RMB891.4 billion in 2020, down 28.88% year-on-year.
Without Huawei, a strong competitor, the iPhone showed rapid growth in the domestic market. In the third quarter of 2021 (natural quarter), Apple's domestic shipments increased by 49.7% year-on-year. Among them, the iPhone 13 series is the biggest driver of Apple's rapid growth. Revenue from iPhones increased 47 percent year-over-year to $38.87 billion (more than 240 billion yuan) in the quarter. At the same time, with the iPhone 13 in high demand, In the third quarter of 2021, Apple regained its second place in the world.
According to Data from Canalys Research, in the third quarter of 2021, iPhone shipments were 49.2 million units, and Apple's share returned to second place. Xiaomi ranked third, down 6% year-on-year, shipping 44 million units. As far as high-end mobile phones are concerned, Apple lacks heavyweight competitors. As the world's best-selling high-end smartphone, the iPhone has made Apple a lot of money. With a profit of US$57.4 billion in 2020, it topped the 2021 Fortune Global 500 list, making it the world's most profitable publicly traded company.
But in terms of shipments, Xiaomi and Apple are not separated, in the second quarter of 2021, Xiaomi's global mobile phone market share surpassed Apple, catching up with Samsung. In response to this achievement, Lei Jun pointed out in the previous letter that Xiaomi became the second in the world for the first time, saying that this is a fantastic achievement and a major milestone in the history of Xiaomi's development. Overall, Xiaomi and Apple have shown a pattern of catching up with each other on shipments, showing strong competitiveness.
Of course, as the leading brand in the global high-end mobile phone market, Apple has long occupied the global high-end mobile phone market and earned the largest profit in the industry, while Apple is expected to become the first listed company in history with a market value of more than $3 trillion. As of December 31, 2020, Apple's market capitalization reached $2.91 trillion, with a cumulative increase of 35% for the whole year. In contrast, Xiaomi's cumulative decline in the capital market for the whole year reached 43%, with a market value of 472.3 billion Hong Kong dollars (about 60.5 billion US dollars), a difference of 48 times between the market value of the two.
In terms of business capabilities, the gap between the two is also very large. In terms of revenue, as of the fourth quarter of fiscal 2021 on September 25, 2021, Apple's total revenue reached $83.4 billion, an increase of 29% year-on-year; net profit was $20.55 billion, up 62% from the same period last year. Xiaomi's revenue for the third quarter of 2021 was RMB78.1 billion, an increase of 8.2% year-on-year; profit for the period was RMB789 million, down 83.8% year-on-year, and adjusted net profit was RMB5.176 billion, an increase of 25.4% year-on-year. Apple's net profit was 165 times larger than Xiaomi's profit during the period.
Perhaps mobile phone shipments can surpass Apple, but the ability to make money is separated. You know, in the past decade or so of the booming mobile Internet, Apple is the core promoter, its core to bring the world iPhone, and then reshape the global mobile phone landscape. At the same time, in the past decade or so, Apple has been leading the development of global smartphones, as well as consumer technology products such as wearable devices, which is undoubtedly a vane in the global consumer technology market. Of course, behind this lies Apple's investment in technological innovation, in the past year, Apple's R & D investment exceeded 15 billion euros, according to the current exchange rate conversion, the annual R & D investment of more than 100 billion yuan.
Apple's R& D investment scale ranks fifth in the world, ranking in front of Google, Huawei, Microsoft, and Samsung. It should also be pointed out that Huawei has not been pursuing high profit margins for a long time, but has focused on technological innovation, making it a global voice in technologies such as 5G, Internet of Things, cloud computing and artificial intelligence. In the past decade, the cumulative R&D investment has exceeded 720 billion yuan, and despite the difficult environment in 2021, it has maintained a high-intensity R&D investment of more than 120 billion yuan.
Finally, the competition between global mobile phone manufacturers is becoming increasingly stable. Mainly Samsung, Apple, Xiaomi, Vivo and OPPO five major mobile phone manufacturers, they occupy 70% of the global mobile phone market share. However, global mobile phone shipments fell year-on-year. According to IDC data, global smartphone shipments in the third quarter of 2021 fell 6.7% year-on-year to 330 million units. During the quarter, Xiaomi shipments fell 4.6 percent. Smart phones as the basic disk of Millet, the third quarter of 2021 mobile phone plate revenue of 47.8 billion yuan, a slight increase of 0.4%, facing many adverse effects such as declining market share and weak performance growth, whether it can surpass Apple in mobile phone shipments, it remains to be tested by time.
Yang Jianyong, a contributor to Forbes China and winner of the NetEase 2020 Most Influential Award, is committed to in-depth interpretation of cutting-edge technologies such as the Internet of Things, cloud services and artificial intelligence, and his views and research strategies have been cited by many authoritative media and well-known enterprises.