Looking back at the mobile phone market in 2021, the characteristics of the "post-epidemic era" market are still obvious: the sluggish consumer demand, the turmoil of the whole industry chain caused by the epidemic, and the changes in the internal and external market environment. Let the mobile phone market throughout 2021 be full of challenges. The rapidly changing competitive landscape makes every player in this arena dare not take it lightly. Judging from market feedback, the ranking of the global mobile phone market share in almost every quarter last year is alternately changing, especially the Chinese mobile phone brand.
Along with competition and challenges comes opportunities. Also in 2021, each company has made adaptive adjustments at the market, brand and strategic levels under the new market pattern. Chinese mobile phone manufacturers who have accumulated innovative technologies for many years have also ushered in the full blossoming of technological exploration and innovation achievements in product form and functional experience. The full outbreak of the folding screen, the landing of the self-developed chip... These new highlights not only show the innovation and vitality of Chinese mobile phone brands, but also bring more freshness and vitality to the entire mobile phone market in 2021.
Under all kinds of new changes, the mobile phone market in 2022 is more worth looking forward to.
Demand is picking up, and uncertainties remain
The epidemic that lasted until the end of 2019 has continued to the impact on the mobile phone market. At that time, China had just officially started the pace of 5G commercialization. Not only mobile phone terminal manufacturers, but also the entire industry, including operators and application service providers, are gearing up to enter a new era with the shareholder wind of 5G full commercialization in 2020. For mobile phone manufacturers who are the first to touch 5G technology, the replacement of machines spawned by 5G commercialization will bring them greater opportunities and markets.
But with the arrival of the epidemic, everything has changed. The new crown has not only disrupted the original planned rhythm of 5G new product listings, but also disrupted the supply system of the entire upstream and downstream of mobile phones as the epidemic spreads around the world. The structural supply imbalance directly caused the entire industry to face the problem of insufficient supply of components from the fourth quarter of 2020 to the whole year of 2021. The lack of core is almost an eternal topic of discussion in the whole industry in 2021.
More critically, the negative impact of the epidemic on the global economy has also directly led to a sluggish consumer demand. In the face of the raging epidemic, consumers' original replacement needs have been greatly compressed. The epidemic has slowed down the deployment speed of 5G networks around the world, which has further dragged down the full popularization and rollout of 5G mobile terminals.
We predict that by 2022, the consumer demand in the mobile phone market is expected to pick up. This trend is actually already showing up in 2021. According to the market analysis agency DIGIMIES Research released the 2021 global smartphone shipment data report: global smartphone shipments in 2021 are about 1.32 billion units. Although it is still not as good as the global shipment data of 1.37 billion units in 2019 before the epidemic, compared with the shipments of 1.24 billion units in 2020, a year-on-year decline of 8.8%, the global mobile phone market has achieved a year-on-year growth of 6.1% year-on-year in 2021. At least from the perspective of the whole year, the demand of the entire market is indeed slowly picking up.
Source: DIGITIMES Research
From the perspective of supply and demand, as the market with the most concentrated distribution and the most perfect supply system in the global mobile phone industry, the strong epidemic prevention and control policy implemented by China has enabled the production and supply capacity of the entire mobile phone market to recover rapidly in a short period of time. After two years of anti-epidemic testing, the market and consumers have established certain psychological expectations for the impact and impact of the epidemic.
In addition, the good economic development momentum has further enhanced the confidence of China's mobile phone market and consumers. At present, in the current relatively optimistic and positive environment, some of the replacement demand that was previously suppressed by the epidemic is expected to be further released in 2022.
However, the epidemic is still the biggest uncertainty for the entire market in 2022. Although the current epidemic situation in China is generally stable, the world is undoubtedly facing a new round of epidemic prevention and control challenges. The new epidemic situation not only tests the protective capacity of the "Great Wall of Immunity" built by the previous vaccine, but also puts forward higher requirements for the national epidemic prevention and control policy and the comprehensive management of society. The complex and changeable epidemic situation is undoubtedly a severe test that cannot be escaped for the global mobile phone industry, which is highly dependent on upstream and downstream supply capabilities.
Continued lack of cores, the market pattern has undergone new changes
As mentioned earlier, the "big climate" of the epidemic has had a serious impact on the supply and demand structure of downstream industries in the mobile phone market in the past two years. And this imbalance and dislocation of supply and demand, the most direct response is the two words that have been repeatedly mentioned in the past one or two years: lack of core.
It should be understood that the shortage of chips in the whole industry does not refer to the mobile phone CPU and GPU chips that we are familiar with, but includes radio frequency, communication, simulation, and even power management, screen drivers and other chips. Chip shortages are not only bothering the mobile phone industry, the automotive industry is also facing the problem of insufficient chip supply in 2021. As a result, many car companies have significantly reduced production, and some popular models are also facing the problem of extended delivery time. The most typical example of the mobile phone market last year is that after the release of the iPhone13 Pro series, due to the shortage of components, the delivery time was greatly extended.
Unfortunately, this situation may not be fundamentally changed in 2022.
According to data from market research firm Susquehanna International Group, global chip lead times have continued to rise since the beginning of 2020, reaching 22.3 weeks in the latest. The industry generally estimates that the current chip shortage problem in the whole industry may continue until around 2023. This is because the expansion of production capacity in the chip industry often takes about 2-3 years. The current rise of 5G, ioT, and Internet of Things technologies, and the global expansion of the intelligent automotive industry, have directly led to the explosive growth of the demand for chips in the whole industry.
Source: Susquehanna International Group
Under the premise that there is no fundamental increase in production capacity and demand has increased significantly, the current "urgent need" of chips may be difficult to be fundamentally solved in a short period of time.
Looking at the field of mobile phone SoCs, the market competition pattern of mobile Phone SoCs in 2022 is expected to usher in some new changes.
As in previous years, in the flagship SoC field, Apple and Qualcomm continue to lead their respective camps. However, due to the dual impact of Qualcomm's Snapdragon 8 flagship platform by Samsung's 4nm process and market strategy, it is lower than market expectations in terms of overall performance and power consumption performance. At the same time, MTK's launch of the Tianji 9000 for the flagship market in 2022 is menacing, showing strong competitiveness in terms of overall performance and experience. This means that in the Android flagship market in 2022, Qualcomm's long-standing dominant position may be shaken.
In addition, Huawei's series of difficulties in the past two years affected by the ban have made the entire industry have a clearer understanding of the problem of chip autonomy. Solving the chip "card neck" problem has now risen to the height of national strategy. Some domestic upstream and downstream enterprises have also fully opened the chip industry investment and independent research and development strategy, especially in the domestic chip manufacturers such as Tsinghua Unigroup Zhanrui as the main representative, their flagship products for 2022 - Tanggula series 5G chips, will be deployed to China Telecom, ZTE, Hisense and other brands of mobile phone products this year.
Even international manufacturers such as Samsung are equipped with Chinese chips such as Tiger Ben 618 on this year's Samsung Galaxy Tab A8 and other products. This marks that the domestic general chip has gradually been recognized by international and domestic terminal manufacturers in terms of performance, experience and reliability. Although its main target is still the low-end market, it has made breakthrough progress compared with the past.
In addition to SoC, several mainstream mobile phone manufacturers, including Xiaomi, OPPO, and Vivo, have fully opened plans for self-developed chips. Unlike system-level chips such as SoCs, the above-mentioned mobile phone manufacturers are currently involved in functional chips such as ISPs, NPU, and power management. Mobile phone manufacturers do self-developed chips according to their own needs, in addition to improving the differentiated experience of products and enhancing the market competitiveness of products, it is also a reserve of technology and talents for the next step of independent design and manufacture of more complex SoC chips.
In 2022, we will be expected to see the "domestic core" enter the mass consumer market more.
Competition has intensified, and high-end is still the main theme of domestic brands
From the perspective of mobile phone manufacturers, there is also an inherent driving factor for self-developed chips: several major head brands have opened a comprehensive high-end strategy in recent years.
Self-developed chips can be seen as the only way for Chinese mobile phone brands to go to the high-end market. Its biggest advantage is that it can realize the integration of software and hardware, not only the hardware can be developed according to its own product requirements, but the corresponding software can also maximize the full performance and achieve the effect of 1+1>2. Take the self-developed image chips that are currently attached great importance to by all companies, and after equipped with a special self-developed ISP, the improvement of the imaging quality of these mobile phones is obvious.
In addition, self-developed chips also have advantages in hardware costs and supply risks. It can be seen that there are international giants such as Apple, Samsung, and Google abroad, and large manufacturers such as Huawei in China have previously launched their own self-developed chips. And with the help of the ability of self-developed chips, these big manufacturers have created products with enough differentiation to finally gain a foothold in the high-end market.
In other words, the battle for the high-end market is essentially a battle of technology and innovation. Only from the current investment of huge manpower and material resources to do self-developed chips is enough to see: high-end is still one of the main themes of domestic mobile phone brands in the future for a long time.
At present, due to the sanctions policy, Huawei is facing difficulties in the supply of core components such as chips. In a short period of time, there is still no solution. After Huawei's absence, most of its market vacancies in the high-end market were filled by Apple. This is also one of the reasons why Apple's performance has soared in the past fiscal year, and finally achieved a breakthrough of 3 trillion yuan in market value by virtue of its position as the world's second largest mobile phone manufacturer.
Since the end of last year, several mainstream mobile phone brands in China have successively released new products for the flagship market in the spring of 2022. These new products equipped with the Snapdragon 8 mobile platform have fully explored the price and have occupied the price range of 3500-6000 yuan of domestic flagship mobile phones. According to the forecast data released by GFK Sainuo, the average price of products in the domestic mobile phone market will reach 3255 yuan in 2022, hitting a record high.
However, it must be pointed out that although from the perspective of price range, domestic flagships have made breakthroughs in the high-end market. However, from the proportion of sales, the shipments of several mainstream domestic mobile phone brands are still concentrated in the low-end market. For domestic brands, high-end flagship products are only representative of their continuous deep exploration of the high-end market in a large sense, and also assume a part of the role of flagship experience and price anchoring, and the contribution to sales is actually not large at present.
Although the high-end strategy still has a long way to go, in 2022 we will see more efforts and breakthroughs by domestic mobile phone brands in this regard.
Full outbreak, folding screen market ushered in a blowout
The comprehensive high-end of the mobile phone brand has also brought an ancillary product - folding screen.
From the second half of 2021 to the present, the folding screen market has become lively. Previously, the players in the folding screen field were only giants such as Samsung and Huawei, or upstream flexible panel companies such as Royole. But after entering 2021, you will find that in addition to these brands, several mainstream brands, including Xiaomi, OPPO, and Honor, have completed the listing and deployment of folding screen products.
At the same time, brands including vivo, one plus, realme and other brands have also successively exposed the information of new folding screen products. Huawei expanded its folding screen product line at the end of last year and launched a vertical folding solution such as the P50 Pocket.
Domestic mobile phone brands have "run into the market", naturally there are internal reasons. Compared with ordinary flagship mobile phones, folding screens have higher requirements in terms of hardware costs, manufacturing processes, software and hardware technologies, etc. And as a "new species", the market and consumers have a certain degree of acceptance of their hardware costs, and the folding screen is naturally suitable for "impacting the high-end" in product form and functional positioning.
On the other hand, after years of continuous iteration and upgrading, the upstream and downstream industrial chain of the domestic folding screen has made breakthroughs in core technologies and solutions such as flexible screen panels, hinges, and screen outer materials. The pain point problems faced by folding screen products in the early stage such as obvious creases, abnormal display, and lack of scratch resistance and wear resistance have been gradually alleviated. And compared with the relatively conceptual product positioning of the early folding screen, the folding screen that gradually entered the mass market began to show the overall cost advantage brought about by large-scale production.
Folding screen, no longer so high on the top.
From the price point of view, the recently released OPPO Find N, Huawei P50 Pocket and Honor Magic V and other folding screen new products, its basic price is basically controlled within 10,000 yuan. From the level of brand publicity, brands have also begun to emphasize the ease of use and common use of folding screens. In addition to targeted optimization at the software and hardware level, solve some product diseases, and improve the experience of folding screens. Through the relatively low price, to reduce the user's cost of use, so that the folding screen "into the homes of ordinary people" has become the same choice of each family.
We expect that in 2022, folding screens will surely usher in an explosive growth.
According to a survey report from the panel supply chain research and research agency DSCC, in the third quarter of 2021, the shipment of folding screen mobile phones reached 2.6 million units, an increase of 215% month-on-month and an increase of 480% year-on-year. It is expected that by 2022, the shipment volume of the folding screen mobile phone market will reach 17.5 million units. In contrast, the folding screen market before 2021 will be much bleaker. The same survey report from DSCC shows that the shipment of folding screen mobile phones in 2019 is only more than 500,000 units, and the number in 2020 is only 3 million units.
Source: DSCC
In fact, it is not only domestic mobile phone brands that see the rapid growth market potential of folding screens. According to foreign media BusinessKorea's previous report, Samsung Display (Samsung Display) expects the future folding screen mobile phone market to break out, in order to cope with the growing demand for OLED panels, the company plans to increase the foldable OLED screen production target from 17 million pieces per year to 25 million pieces.
Domestic upstream screen panel companies, including BOE, Visionox, and Huaxing Optoelectronics, have a wide layout at the foldable flexible panel level. In particular, Huaxing Optoelectronics' t4 project in Wuhan is the first sixth-generation line in China to focus on flexible folding screens, with a total investment of 40.7 billion yuan, mainly producing small and medium-sized high-resolution flexible display modules, with a design monthly production capacity of 45,000 pieces, and the project will be completed by the end of 2022.
Mainstream brands and upstream enterprises collectively "bet" on the folding screen, which is bound to greatly promote the technological upgrading and iteration of the entire upstream and downstream industry chain of the folding screen. At the same time, the rapid increase in market share will also promote the gradual maturity of folding screen products in the fields of hardware supply, innovative interaction, and application ecology.
Previously, due to the low shipment of folding screen products, application developers did not have enough motivation to do software adaptation, and for a long time, folding screen manufacturers often needed to adapt and optimize applications themselves. This is not only inefficient and costly, but also difficult to form a large-scale application ecology, which is also the main reason for the poor adaptability of large-screen applications in folding screen products for a long time. After the overall volume of the folding screen rises, it will attract more developers to adapt and develop more applications suitable for large screens.
In this way, the application adaptation problem of folding screen products will be effectively alleviated, and the application experience of folding screen products will also be greatly improved. The solution of these problems will attract more consumers to choose the folding screen, and the market will therefore form a virtuous circle.
According to such market estimates, it is not too much to call 2022 the first year of folding screen products.
OEM survival, new and old faces have entered
Another change worth observing in the mobile phone market in 2021 is that there are some long-lost old faces, such as the familiar Coolpad, LeTV, Charm Blue, and Lenovo Lemeng have announced their return. In addition, some new brands that may be a little unfamiliar to us have been born, such as Dingqiao, Thunderbird, Youchangxiang, NZONE and so on.
The direct reason for the addition of these new and old faces is Huawei. After receiving the ban, Huawei's share of the mobile phone market has shrunk significantly. Due to the obstruction of the supply of a large number of core components, Huawei's entire range of mobile phone products is actually facing difficult supply pressure. Especially in the supply of 5G-related yuanware, Huawei currently has almost no other alternatives. So it can be seen that in 2021, Huawei's flagship products, including flagship products such as the P50 series, do not support 5G.
Under such a dilemma, Huawei has survived through third-party authorized production. Simply put, Huawei provides the software and hardware design of the mobile phone, which is produced by third-party brands that purchase components independently. These products with the third-party brand logo will be listed under the name "Huawei Smart Selection" in its own channels and in Huawei's sales channels. Dingqiao N8 Pro is the product of this cooperation model, this product is almost indistinguishable from Huawei's nova 8 Pro in appearance and configuration, but it is equipped with Huawei's Kirin 985 chip and supports 5G.
Similarly, Huawei, which has always had in-depth cooperation with domestic operators, has also carried out similar cooperation with the three major domestic operators. For example, NZONE, a sub-brand launched by China Mobile, Mai Mang of China Telecom, and Youchangxiang of China Unicom, a series of new machines launched by these brands last year can actually find the corresponding "prototypes" under Huawei's original product system.
Huawei's exit in the low-end market also provides new opportunities for old brands such as Coolpad, LeTV, and Charm Blue. It can be seen that after the announcement of the return, the above-mentioned several are launched with entry products of thousands of yuan or even hundreds of yuan. The purpose of this point in time is naturally self-evident. The products they launched can also largely fill some of the blank market after Huawei's vacancy.
In 2022, these old and new brands will be more active. In particular, these new brands that Huawei participates in cooperation will use the advantages of operators and Huawei's own channels to regain a part of the market share. Previously, Bloomberg even estimated that Huawei's mobile phone shipments through authorized cooperation in 2022 may reach 30 million units. Obviously, this is also a force that cannot be ignored in the mobile phone market this year.
Meta-universe + environmental protection, the new concept is expected to land
In addition to these new changes mentioned above, there are also some new concepts worth paying attention to in the mobile phone market in 2022.
Just a few days before the deadline, a big news broke out in the mobile phone circle: Tencent intends to acquire the game mobile phone company Black Shark Technology, which will be merged into the Tencent Group Platform and Content Business Group (PCG) led by Ren Yuxin. It is reported that after the merger into Tencent, Black Shark will focus its business on the meta-universe field to create a software and hardware entrance to the future meta-universe world.
Tencent's acquisition of Black Shark also attaches great importance to the advantages of Black Shark as a mobile phone brand in hardware research and development, supply management and sales channels, combined with Tencent's own integration capabilities in platform, content and ecology, the cooperation between the two at the software and hardware level may collide with new sparks.
How hot is the meta-universe concept in 2021, there is no need to bother with words. In the face of such a new concept that may change the connection method and interaction form of the future world, mobile phone manufacturers with a sensitive sense of smell should also pay attention to it early. In particular, these mainstream mobile phone manufacturers themselves have certain experience and technical accumulation in software and hardware development and ecological content creation. Although there is no specific information disclosure for the metaverse at present, it can be expected that the promotion of related projects and the pre-research of product technology should already be in progress.
In 2022, the mobile phone market may have some metaverse concepts introduced. It is not necessarily necessary to have the release of metaverse-related products, but we can expect that under the impetus of the meta-universe concept, some new technical solutions or interactive forms will be introduced into mobile phone products, and the addition of these new concepts can even change the hardware form of mobile phone products to a certain extent.
The second concept worth paying attention to is actually not unfamiliar to everyone: environmental protection.
All along, the "environmental benchmark" of the mobile phone industry is actually Apple. On the iPhone 12 series products, Apple announced that in order to reduce carbon emissions, it cancelled the power adapter in the original mobile phone packaging; and on the iPhone 13 series products, Apple once again announced the cancellation of the plastic film on the surface of the mobile phone packaging. Apple CEO Tim Cook previously said in an interview that the production of iPhones in the future will no longer consume the earth's resources and will rely entirely on renewable resources.
According to Apple's previously announced plan, by 2025, Apple will completely eliminate plastic in packaging and use 100% recycled or renewable materials in all products and packaging. By 2030, Apple will achieve "carbon neutrality" for the entire business, production supply chain, and product life cycle. This means that the manufacturing process of all Apple products in 2030 will not increase any carbon emissions that exacerbate climate change.
At the policy level, China clearly proposed the "double carbon" target in September 2020: China's carbon dioxide emissions strive to peak by 2030 and strive to achieve carbon neutrality by 2060. At present, relevant departments are intensively formulating and studying relevant industry standards, laws and regulations, and more policies related to "double carbon" are also being studied and deployed.
We predict that in 2022 we will see more actions in China's mobile phone industry in terms of energy conservation and emission reduction.
As the world's largest mobile phone market, China sold more than 300 million mobile phones last year. There are no small carbon emissions in the production, transportation, use, scrapping and other aspects of these mobile phones. Optimizing the carbon emissions of these links has far-reaching positive significance for promoting the realization of the "double reduction" goal for the whole society. At the same time, because mobile phones are a highly intensive industry, these moves will also drive upstream and downstream enterprises in the entire industrial chain to carry out low-carbon scientific and technological innovation.
In 2022, in addition to not sending charging heads and reducing plastic packaging, we should be able to see mobile phone manufacturers make more explorations and attempts on "environmental protection" issues.
Editor's Note:
Around the four aspects of market environment, brand strategy, product layout, and technical concept, we have sorted out and interpreted some trends that may occur in the mobile phone market in 2022. Overall, despite the challenges and uncertainties, we are still optimistic about the mobile phone market in 2022 and even in the future. Especially in the Chinese mobile phone market, we are full of confidence. This is not only because after more than a decade of development, Chinese mobile phone brands have made breakthroughs in technological innovation, industrial upgrading and other aspects. It is also because looking back at the development history of China's mobile phone market, China's mobile phone industry can always cope with various adversities and difficulties with a tenacious and enterprising mentality. This is actually the most important reason for the rapid development of China's mobile phone industry in the past few years and its global development.
It is also driven by such internal and external factors that the mobile phone market in 2022 is destined to be extraordinary and wonderful.