Honor CEO Zhao Ming. Courtesy of the enterprise
"Huawei's nearly 100,000 R&D team has the ability to do all aspects, but the 4,000 or so R&D personnel from Glory have to rely on themselves to make up for everything." On January 11, Zhao Ming, CEO of Glory, said this in an interview with the Beijing News Shell Finance and other media.
A day earlier, Honor had just released the Magic V, a flagship folding screen phone with a starting price of 9999 yuan. Coupled with the Magic 3 series released in August last year, which was once only the glory of Huawei's Internet brand, in less than half a year, it has completed the layout of two flagship series. Its overseas market also restarted in October last year, and Zhao Ming said that Honor's goal is to surpass the Chinese market in overseas shipments in the next 3-5 years.
Honor released the Folding Screen Phone Magic V. Courtesy of the enterprise
In 2021, when the industry is suddenly changing, Glory has taken a rather thrilling road. In April, which Zhao Ming called the "darkest hour", Glory once faced the dilemma of "food shortage", and there was almost no inventory to sell. The supply chain team wants to grab the chips "one by one", and the R & D team can only use chips that are not optimistic about other manufacturers to develop new machines. However, when the new machine opened and the supply chain was straightened out, Honor's market share also quickly rose to near record highs. After getting rid of the original positioning shackles, he even began to shout out the goal of "benchmarking apples".
"Your nerves will be honed more and more coarsely, and the particles will get bigger and bigger." When talking about the changes between himself and the company in the past year, Zhao Ming admitted, "2021 is actually in an abnormal rhythm for Glory. Zhao Ming expects that in 2022, the problem of lack of core will be alleviated, but the mobile phone industry market may only remain stable or slightly declining, and Glory needs to be "stable".
In the face of the "inner volume" of the domestic mobile phone market, the manufacturer's sprint to the high-end lack of stamina, Zhao Ming pointed out bluntly: "In fact, what we do has not met the needs of consumers, and everyone is still repeating at a relatively low level." However, he also believes that "inner volume" also means that some breakthrough time may be coming.
"If you can roll down the apple, that's the skill."
There was almost no goods to sell during the toughest times, and employees asked if Glory was "finished"
Shell Finance: You later mentioned many times that Glory faced the "darkest hour" in April last year, when the main difficulty was it?
Zhao Ming: When it was particularly difficult, it was that there was no stock at that time, and there was not much "grain storage". At the lowest point of a month, we sent out hundreds of thousands of units, about three or five hundred thousand mobile phones. At that time, the goods had to be saved, because I had to think about how to hold out until the new chip supply arrived. At that time, every mobile phone was distributed at the headquarters in China, and in order to let our core stores survive, it was really a piece of land. At that time, our market share was only 3%, and the shipment volume in a month was not even as good as the volume of the mobile phone industry in a day.
Shell Finance: At that time, many people were not optimistic about glory, did these voices reach your ears?
Zhao Ming: I remember in April, we had an internal exchange, "CEO face to face", all the people in the company can ask questions online, and some of the more popular questions will also be toppled. At that time, many people asked, there are many people on the Internet who are not optimistic about us, thinking that our glory is not going to be "finished".
Shell Finance: In the face of so many internal and external doubts, will the pressure be great?
Zhao Ming: This is also what you should take on as a CEO, right? In the original Huawei system, there are bigger leaders to undertake, you are not worried about the state of resources to work. Now we glory is still a startup after all, the business to the end of the need to make a decision, are billions of investment, involving the judgment of the market, the judgment of the technological development route, the judgment of consumers, in fact, is relatively risky. Of course, this may also have the advantage that your nerves will be honed more and more coarsely, and the particles will become larger and larger.
Shell Finance: 3% of the market share of the "desperate situation", how did glory come out?
Zhao Ming: Our core team will be more active than me in many cases, such as Fang Fei, president of our products, and our professional marketing team. And our supply chain team, in the most difficult times, really snatched back the chips one by one every day. At that time, when our product team decided what to do, it was not to plan your product and then choose what chip, but to use the chip. The only chip we were not constrained to supply in large quantities was the Qualcomm Snapdragon 778G, because other companies were not very optimistic about this chip at that time. We got the chip 45 days later than the industry, but concentrated the strength of the whole company, and finally let the Honor 50 go public as scheduled. This "rush march" suddenly reversed the rhythm of our supply.
After independence, more than 4,000 new employees must rely on their own research and development to "make up for everything"
Shell Finance: How big is Honor's current employee size?
Zhao Ming: We came out of Huawei, there are nearly 8,000 people, and the development has now been 11,000 people. In addition to the departures, there are more than 4,000 new additions. This year, we will also carry out school recruitment and social recruitment, and the staff will be further expanded. At the same time, we will also pay attention to maintaining our cultural values, and our combat effectiveness will be further improved on the basis of the original. We regard simplicity and efficiency as one of the company's values, and we must always remind ourselves that after the organization is large, do not become bureaucratic and slow. We implement a two-tier review system internally, and do not "toss to death" the person who proposed the process because there are too many approval procedures. By the end of last year, our two-tier trial completion rate reached 85%, and some departments reached 90%.
Shell Finance: Before and after glory independence, were there any major changes in the management of the company?
Zhao Ming: In fact, for me, the impact is there, but it is not particularly large. Glory in the beginning was a relatively independent system, there was a higher management team on it, and now I still have a board of directors above me. But it is true that the breadth, breadth and depth of decision-making are now greater than before possible, and there is more decision-making power. This is also a matter of more and less, and I don't think there is any essential difference.
From the company's business level, it may be that resources can be more integrated. In the original system, we wanted to balance and coordinate on a larger platform, and now the whole balance and coordination is in our own place.
Shell Finance: Without Huawei's "bigger platform", is Honor's research and development also facing great pressure?
Zhao Ming: Huawei has a research and development team of nearly 100,000 people, with the ability of all aspects, but the 4,000 or so R&D personnel who came out of Glory have to rely on themselves to make up for everything. In 2021, in the case of extremely tight R&D resources throughout Glory, we still gathered a team and spent nearly a year polishing the Magic Live intelligent engine. Our company has a lot of such investments, so that we can take every step of the way to the future. It may be a little slower at first, but it will get better and better, so you have to calm down.
Manufacturers do not starve to death, only to die, do not be overly optimistic about the market
Shell Finance: Is Glory missing a core now? Is it expected that the lack of core in the mobile phone industry will be alleviated in 2022?
Zhao Ming: Now the chip is not particularly nervous, for us is not too nervous. From the perspective of the entire future development, chips are structural shortages for us, but there is a shortage of individual chips in individual markets overseas.
The problem of chips will certainly be alleviated in 2022 than last year, and the shortage is structural. Because there was a special reason last year, that is, Huawei and Honor suddenly left the market for a while, everyone came to grab this market, and everyone was overbooking. However, this could also lead to the overall supply of chips far exceeding market capacity. Few manufacturers are "starving to death", except in special cases, they are "dying". Glory itself actually needs to pay special attention, be particularly cautious, and not be overly optimistic about the market.
Shell Finance: What do you expect the trend of the mobile phone market this year?
Zhao Ming: I don't think this year's market growth is realistic, and I expect it will remain stable or slightly declining.
Shell Finance: After the market share returns, what will Glory do?
Zhao Ming: After the third quarter, from the perspective of our sales, we have entered a benign stage of development, and more importantly, at the consumer level, in the development route of flagship machines, how should the company build the ability to face long-term competition. If it is for the sake of sales, it is okay to do low prices and promotions, but glory is very restrained. In the future product planning, we basically do not have products under 1000 yuan.
Continue to sink channels, enter overseas markets, and glory will "adjust the rhythm" in 2022
Shell Finance: In 2022, what adjustments is Honor preparing to make?
Zhao Ming: In the general direction, I think it is still necessary to "stabilize". In terms of core innovation capabilities, end-to-end delivery capabilities, and efficient sales systems, there are also many lessons to be made up. Another key word is "tuning structure". 2021 for glory, in fact, is in an abnormal rhythm, the first half of the year is not sold, after the glory 50 in the second half of the year issued honor 60. But we have to deliver them quickly before we can settle down to think and plan, and the rhythm is adjusted in this way. We certainly don't have that many products this year, and if the first half of 2022 maintains the same product release density as in the second half of last year, then our team will be "crazy" and the market will be "crazy".
Shell Finance: In the construction of offline channels, how will Glory further layout?
Zhao Ming: There are many product series and the people we serve are very extensive, so the sinking of channels will definitely be done this year, in fact, so far, most of our counties in China have the layout of channels and retail systems, and they have been laid out for a long time, and some towns have no problem. The coverage in 2022 will definitely be better than last year, and Honor's connection and contact with dealers will be better.
I know that there is actually a lot of pressure on offline channels. Because of the impact of the epidemic and the impact of residents' willingness to consume, the pressure on offline physical stores is quite large. We're also thinking about how we can really help and empower them in 2022. One is to continue to launch products like Magic V to attract consumers to actively experience in-store. In addition, we need to help dealers improve efficiency, such as helping them drain traffic from online, promoting the digital transformation of channel operations, and so on.
Shell Finance: Glory's overseas market also restarted in October last year, what are your expectations or plans for overseas markets?
Zhao Ming: Glory will definitely have a high-speed development in the overseas market in 2022. In terms of total volume, our goal is that overseas markets can surpass the Chinese market within three to five years. Because the Chinese market is also getting bigger, the growth rate overseas will only be faster.
In the European market, we will focus on expanding through high-end flagship mobile phones in the future to build high-end brands and high-end markets. This is also true of some countries in the Middle East and the Asia-Pacific region. In Latin America and Africa, more will be based on the sales of low-end models. The Russian market is relatively balanced.
Consumers are always right, and domestic mobile phones are still lacking in product power to impact high-end
Shell Finance: The high-end card of domestic mobile phones cannot be broken through at a price of about 4500-5000 yuan, and the competition is becoming more and more "inner volume", how do you think about this situation?
Zhao Ming: I think in fact, what we do is not meeting the needs of consumers, and everyone is still repeating at a relatively low level. After Glory came out independently, it also learned to have a clear understanding of itself, not to complain about others, not to say how the market and consumers are, consumers are always right, (or) have you made products that really amaze consumers.
Objectively speaking, none of the flagship products in 2021 actually make me feel recognized. What do you want consumers to recognize you for? Is it the flagship chip? He didn't buy chips, right, he bought experiences. So don't talk about these prices all day long, we should consider the use value and experience value brought to consumers. Price is determined by value, right? In fact, it is more appropriate for us to ask ourselves the other way around.
Shell Finance: What restricts domestic mobile phones is that there are more factors in product strength, or more factors in brand power?
Zhao Ming: I think the core is still the product.
Shell Finance: Now the main domestic mobile phone manufacturers to do folding screens, push self-developed chips have become "standard", glory has a plan to do self-developed chips?
Zhao Ming: I can say that the chip itself is not particularly difficult for us, because the real difficulty is to make SoC chips. In the short term, we have no plans to do baseband chips or SoC chips. If you want to do SoC chips, it is definitely a particularly big decision, but to say "make chips" this thing, do or not do is not a particularly difficult decision, because it completely depends on your needs. You can do a power management chip, or a Bluetooth, Wi-Fi chip, as long as it is based on your business needs.
Shell Finance: Can the situation of "inner volume" of domestic mobile phone manufacturers be broken?
Zhao Ming: In the new competitive environment, we have to look at who can live better, can succeed and survive for a long time, and can survive and develop with quality, which is the best state of an enterprise. Now look, the competition is also to a new state, we may feel that the mobile phone industry is rolled up, in fact, the inner volume means that some changes, some breakthrough opportunities may come, otherwise this has been going on, the value of this industry will be discounted.
I am still very optimistic about this matter, because after all, the value of Apple is still reflected there. If you can roll down the apple, that is the skill.
The bottom line of Apple is smart service, and intelligence will be the core investment direction of Glory
Shell Finance: Now Glory shouted out the slogan of "benchmarking Apple", before leaving Huawei, did Honor ever think about benchmarking Apple?
Zhao Ming: I didn't think about it at the time. According to the company's positioning of "dual brands" at that time, Honor was mainly positioned as a brand for young people, so our main thinking in the whole design was how to do some cooler technology and more dazzling design. But personally, I have always been particularly optimistic about the personalized direction of operating system and software experience, which is what I firmly believed in at the time.
Shell Finance: Where is the strength of Glory to benchmark Apples?
Ming Zhao: Frankly speaking, Apple today is doing a better job than we are in terms of system design and consumer experience. But it also has its shortcomings. Honor's goal is to take the lead in surpassing Apple's experience in China's service ecosystem, such as the various Internet services supported by the Magic Live intelligent engine. What Magic Live has to do is to create a humanized and personalized operating system, and make the operating system "a thousand faces" according to the different scenarios of users. The same system, any two people to use is not the same. The next step we consider is that Apple is an A-series chip + iOS, we are a combination of Magic Live-blessed operating system and MTK, Qualcomm chips, how do we do the best, so that the comprehensive experience can go up.
Shell Finance: There are many mobile phones with built-in various intelligent capabilities, but the experience is still uneven. What is the most difficult place to do smart?
Zhao Ming: The first is the low power consumption of the entire smart service and the real-time response ability. There is also really to recommend according to the needs of users, if it is advertised, consumers will definitely not accept it. In a way, this is also a question of company values. We want to combine the needs of consumers with the demands of back-end services and Internet platforms. For example, at lunchtime, the system will recommend Meituan or Hungry's takeaway service to you, which is only a suggestion at first, but when the system is familiar with your habits, we will only recommend one of them instead of the other.
Shell Finance: These services put forward high requirements for AI capabilities, will intelligence be the focus of the company's next research and development?
Zhao Ming: Yes, our Magic Live has been released in the front, and we will firmly invest in intelligence in the future, which will be a core investment direction.
Beijing News shell financial reporter promised to edit Xu Chao proofread Guo Li