Text/Han Ying
Editor/Letter Lee
When "small and beautiful" meets "big and complete", what kind of spark will be wiped out?
Meizu, which once occupied a place in the smartphone market, has gained market attention this time because of a rumor of being acquired.
Recently, according to 36Kr, Geely Group's mobile phone company is in contact with the mobile phone manufacturer "Meizu" to negotiate the acquisition. "The deal is still ongoing and DD (due diligence) is being done." Multiple people close to the deal told 36Kr.
In fact, the news of the acquisition came out as no surprise. Last year, Geely announced its entry into the mobile phone market and invested 10 billion yuan. On the one hand, Geely's eagerness to open up the mobile phone market, on the other hand, Meizu wants to find opportunities for self-help.
In response to this news, 36Kr asked Geely's Xingji Times Company and Meizu for verification, as of press time, Xingji Times has not yet replied; Meizu official reply to 36Kr said: "Thank you for your concern for Meizu."
Looking back at Meizu's growth experience in the past 18 years, Meizu mobile phones have undergone several twists and turns. Not only have they harvested highlight moments in the competition of the mobile phone blue ocean market, but also fall behind when the competition has entered the white-hot stage. The problem facing Meizu is that Meizu's voice in the mobile phone market is getting smaller and smaller, and letting the company survive is the first consideration.
On the other hand, Geely, when a number of mobile phone manufacturers turned to make cars, the "big brother" of the automobile circle was also the only way to go against the trend. When new energy vehicles and intelligent driving gradually become the keywords of the automotive circle, Geely also needs a complete smart phone team to accelerate the pace of intelligence and achieve curve overtaking.
No conclusion has been reached on the acquisition. But what is certain is that Meizu, who fell from the altar, is gradually marginalized in the ever-changing mobile phone market, and looking for a backer is a choice that Meizu has to make. So, is Jili a good destination for Meizu?
1. The "small and beautiful" Meizu dilemma
As the earliest brand in China to lay out smart phones, Meizu is an unavoidable topic in the domestic mobile phone market.
But an indisputable fact is that as the domestic mobile phone market has entered a white-hot stage, Meizu has long been reduced to the "Others" in the mobile phone market.
According to the global smartphone shipment report released by market research agency Canallys in the fourth quarter of 2021, in the fourth quarter of 2021, the world's top five mobile phone manufacturers together won 71% of the market share, while Meizu and other "Others" manufacturers can share only 29% of the market share.
Meizu mobile phone, the source of Meizu technology official Weibo
Meizu official data said that the sales of Meizu mobile phones were 22 million in 2016 and 20 million in 2017. In 2018, Meizu mobile phone sales fell off a cliff. According to the 2018 Mobile Phone Sales Ranking in the Chinese market released by Sainuo, Meizu's sales volume that year was 9.48 million units, down 46% year-on-year. By 2020, according to the domestic mobile phone sales monitoring data released by CINNO Research, Meizu's sales in a single quarter have dropped to between 200,000 and 400,000 units.
The decline in mobile phone sales year after year has left Meizu's share of mobile phones. According to Sainuo data, Meizu's market share in 2020 was only 0.5%, and even fell to 0.3% in the third quarter. By the end of 2020, according to the data released by BCI, from December 28, 2020 to January 31, 2021, Meizu's market share was only 0.1%.
A number of data are proving that Meizu has fallen behind in the mobile phone market in recent years, and the problems it faces should not be underestimated.
At the end of last year, the official Meizu community announced that Flyme's mobile phone cloud backup was about to be suspended. You know, the Flyme system was once the symbol of Meizu's "small and beautiful", especially the Flyme system also attracted a lot of "kerosene" (Meizu mobile phone fans nickname). At that time, Luo Yonghao made a hammer mobile phone and took Meizu's Flyme system as an opponent, which shows the high degree of brand recognition of Meizu.
But now, compared with other mainstream mobile phone brands in the same period, Meizu has obviously declined.
Flyme9 system, picture source Meizu technology WeChat public account
2017-2019, is regarded by the industry as The three years lost by Meizu, the three years of mobile phone market into the Red Sea competition, Meizu has gone through a lot of detours, whether it is the supply chain or capital, Meizu's right to speak is getting smaller and smaller.
From the supply chain point of view, chips are the core competitiveness of smart phones, but Meizu has been subject to the dilemma of chips. First, Meizu and Qualcomm had a patent dispute, and then Samsung's "Orion" chip did not support the whole netcom, and Meizu had to choose MediaTek as the chip supplier. However, in that year, MediaTek processors were known as "one core has difficulties, nine cores are watching", and both performance and power consumption performance are not satisfactory.
It is also because of the passivity on the chip that it has led to the confusion of Meizu's product line and the "crotch" of product configuration. The most typical is the "tragedy" of Meizu 7Pro. At that time, a series of quality control problems such as Meizu 7pro screen flashing, fever, caton, and poor battery life occurred one after another, which also became a major landmark event for Meizu to fall behind.
The ensuing chain reaction made Meizu one wrong step at a time and one step at a time. Word-of-mouth is no longer the same as before, the performance of products is not good, and the strategy is wavering, which makes Meizu gradually "fall out of favor" in the capital market. From the sky eye view, Meizu's last round of financing is still stuck in 2019, and it is clear that Meizu has lost the favor of capital.
Meizu financing situation, the source of the sky eye check
However, it should be understood that although Meizu is marginalized, there is still a professional mobile phone team behind it, and it has the gene of making high-end mobile phones.
Xiaomi founder Lei Jun was once a fan of Meizu. At that time, Lei Jun took out a Meizu M8 from his pocket at multiple dinner occasions to explain the benefits of this smartphone to others. At that time, meizu was also the most high-profile era. Meizu founder Huang Zhangmei even boldly said: "Don't be China's apple, do the world's Meizu." ”
Falling from the altar to the current 0.1% market share, some people attribute it to the expansion of Meizu's fame, and some people think that this is Meizu's strategic mistake. But no matter what kind of argument, Meizu's living space is getting smaller and smaller.
At present, Meizu's current living space is seriously squeezed by the head brand, the supply chain and funds have no right to speak, it is difficult to return to the original market position with its own strength, and it is a correct choice to seek a well-funded and strong supply chain.
2. Can the "big and complete" auspicious help Meizu geometry?
When Meizu is gradually marginalized, Geely, the new star in the mobile phone industry, is eager to try.
Many mobile phone circle players enter the car circle, and Geely, a "veteran" who has been in the car circle for decades, has entered the mobile phone circle against the trend.
In September last year, Geely Group established Hubei Xingji Times Technology Co., Ltd. and signed a strategic cooperation agreement with wuhan economic and technological development zone, officially announcing its entry into the field of mobile phones. The project is headquartered in Wuhan Economic and Technological Development Zone, positioning the high-end smartphone market and facing the global mobile phone market.
At that time, Geely announced an investment of 10 billion yuan to enter the mobile phone market. Many people do not understand what Geely intends to break into this Red Sea market, but in fact, if combined with the concept of "Internet of Everything" in the technology circle, it is not difficult to understand Geely's cross-border mobile phones.
Image source Geely Holding Group official Weibo
"In the future, cross-border to build a user ecological chain, according to the law to build a corporate moat has become a major trend, mobile phones can link the Internet of Vehicles, satellite Internet, to create a rich consumption scenario, strengthen the ecosystem, to provide users with a more convenient, more intelligent, Internet of Everything multi-screen interactive life experience." Geely founder Li Shufu said when talking about the reasons for making mobile phones.
When the future of intelligent terminals is no longer an island, it is the consensus of mobile phone manufacturers and automobile manufacturers to take all the ecology of smart terminals into their own hands and form a closed loop of intelligent ecology. Because of this, Xiaomi and Huawei have entered the game to build cars; Geely cross-border mobile phones. The mobile phone is precisely the key to the interconnection of the car and everything.
Looking at the entire mobile phone market, there is no shortage of precedents for cross-border mobile phones. LeTV Jia Yueting and Gree Dong Mingzhu have all tried high-profile. Earlier, 360 founder Zhou Hongyi also began to enter the field of mobile phones, which has reached cooperation with Huawei and Haier and invested in Coolpad, and launched a variety of mobile phone products.
But the final result is that it is difficult to see these mobile phones in the market, and the mobile phone market share is still firmly grasped by professional mobile phone manufacturers.
So in the field of oligarchic and fiercely competitive mobile phones, how will Geely start and how much can it help Meizu?
One thing that mobile phones and cars have in common is that they are "thirsty for talents" for chips. In 2016, Li Shufu founded Yijiatong Technology. Specifically, Yijiatong Technology is an automotive intelligent technology company with a research and development team of more than 1,000 people. In September last year, Geely Automobile announced that it had formally signed a strategic investment agreement with Egatong Technology and injected US$50 million into it, equivalent to 1.51% of the total shares of Egatong Technology.
It is worth mentioning that Shen Ziyu, CEO of Yijiatong Technology, is the legal representative of the Xingji era, and Li Shufu is the majority shareholder.
From this point of view, Geely has been laying out chips for many years. Although car chips are different from mobile phone chips, the experience of designing and developing automotive chips and the accumulation of patents will help Geely's future entry into the field of mobile phones.
More critically, supply chain and funding are top priorities in industries involving thousands of parts. Like automobile manufacturing, mobile phone manufacturers have high requirements for capital and supply chain. Fortunately, compared with the automobile, the mobile phone design and processing industry are very mature, coupled with the overlap of contacts in the automotive electronics and mobile phone industries, Li Shufu, who has decades of experience in the automotive industry, has a certain advantage in entering the bureau.
As mentioned above, chips, supply chains, funds and other situations are precisely the "hard wounds" that Meizu has been, and they are also the lifeblood of mobile phone manufacturers. If this "hand in hand" is successful, Geely's advantages in these areas may bring a glimmer of life to Meizu.
At the same time, in terms of the introduction of mobile phone talents, Geely's actions have also been continuous. Among them, Wang Yong, CEO of Star Era, was the vice president of ZTE, while Zhang Yadong, supervisor of Star Era, served as the general manager of ZTE's PHS mobile phone product line and vice president of mobile phone research and development. Xiaomi's former chief MIUI architect Wang Wenjun also joined Geely at the same time that Geely announced the creation of mobile phones.
But it has to be admitted that with the support of chips, resources and talents, Geely's cross-border mobile phone manufacturing is not a smooth road.
Nowadays, the "lack of core tide" that has swept the global technology industry has not receded, and only giant manufacturers can get a stable chip supply, and small factories have almost no right to speak. Whether it is the demand for chips in cars and mobile phones is very large, how to ensure a sustained and stable supply of chips is what Geely needs to consider. In addition, seeking the supply of parts for mobile phones is also a problem that needs to be considered for Geely, who has just entered the game.
More importantly, from the perspective of the overall mobile phone market environment, the mobile phone industry has reached the stock period after experiencing a pioneering period and a growth period. Counterpoint data shows that in the second quarter of 2021, China's smartphone sales fell by 13% month-on-month and 6% year-on-year to 75 million units. This also means that the competition pattern has stabilized after the industry has entered a mature period, and the competition only belongs to the head players, and most of the players are in a marginal position.
Unlike cars, mobile phones are fast moving consumer goods. In other words, mobile phones are updated quickly. Geely, which has been deeply cultivating automobiles for a long time, how to change its identity and adapt to the playing style and survival rules of the mobile phone market will also take a while.
It also needs to be understood that geely's high-end mobile phone market is also regarded as the "Everest" of the mobile phone industry, even if Xiaomi, OV and other professional mobile phone manufacturers impact the high-end market can not be successful, not to mention Geely, the "primary school student" of the mobile phone industry.
At present, in the mobile phone market where the brand effect occupies the vast majority of the right to speak, there is not much space left for new players such as Geely, and the hope that Geely can bring to Meizu is relatively limited.
3. Jili and Meizu hold hands, intending to hug the group for warmth?
The news of this acquisition is not surprising.
On the one hand, Meizu, which has almost no sound in the mobile phone market, is the auspicious side that has entered the mobile phone market with a high stake. These two companies, which seemed to have no intersection before, this time because of mobile phones stand together.
Although the two sides have not yet made an official response to the matter, the outside world is more concerned about whether if Geely successfully acquires Meizu, the two will become complementary objects. After all, in the business battlefield, both sides take what they need, mutual benefit and win-win situation, is the main purpose.
For Meizu, after trying a variety of paths to save itself, there is no improvement. Although Ali had injected capital into Meizu, the cooperation also broke up in 2017. Ali proposed to divest at Meizu's board of directors, and Meizu's system replaced YunOS with Android in one upgrade. Since then, Meizu has not found a suitable "backing", which also makes Meizu lose the advantage of resources and funds.
Nowadays, meizu after the turning of the world has chosen to rely on the big tree of Geely and introduce Geely's resources and funds, which is a wise move. After all, if you want to flip against the wind, resources and funds are what mobile phone manufacturers need.
In addition, the management team determines the direction of a business development. Previously, Meizu experienced management problems such as executive departures, layoffs, and infighting, which also made Meizu have no time to take care of the development of products. And letting Geely, who has decades of operating experience, take over may help solve Meizu's internal management problems.
At present, Meizu is walking at the crossroads of "selling or not selling", and Geely is also walking on the fork in the road of "how to do".
Mobile phone manufacturers such as Xiaomi and Huawei are not small in making cars, and Geely cross-border mobile phones are also facing the same difficulties as novices.
Needless to say, as a cross-border mobile phone player, what Geely lacks most is the experience of making mobile phones. Generally speaking, analogy cross-border car manufacturing, products want to come out, there are generally two ways to go. One is to find ODM (original design manufacturer) OEM, and the other is to directly buy the original team and brand in the industry.
In contrast, the two models have their own advantages. The former is the most labor-saving and most cost-saving way, only need Geely to output the design concept to ODM manufacturers; the latter acquisition method is more direct, the core technology in their own hands, is conducive to the long-term development of Geely mobile phones.
What is in front of Geely's eyes is that Geely chooses the high-end mobile phone market, which has high requirements for the quality, performance and team of the product itself, so spending money to buy time and occupy a place in the mobile phone market as soon as possible is Geely's first goal. From this logical point of view, Geely's choice to acquire Meizu is a more appropriate option.
On the other hand, Meizu, even if it has fallen behind in the mobile phone market, as the forerunner of domestic mobile phone manufacturers, it still has a lot of value, especially for new players such as Geely.
Not to mention that Meizu also has a batch of "kerosene", the brand power still has "residual temperature", and the design gene of Meizu Flyme system is more important to mobile phone players. According to a financial weekly report, a person close to Geely's mobile phone said: "Geely's favorite Meizu is the Flyme OS design and development team and some intellectual property related to human-computer interactive communication. ”
Obviously, after the acquisition of Meizu, Geely has an absolute right to speak. Not only can it advance the timeline of making mobile phones, but it can also feed back into its own automobile business. According to the needs of the automotive business, we will lay out an intelligent ecosystem and accelerate the pace of Geely's new energy transformation.
Overall, Meizu, who has been left behind for a long time, and the fledgling Jili, the cooperation between the two sides may be able to make up for their respective deficiencies. The answer to the final direction of this deal has not yet been revealed. But for now, this seems to be the optimal solution for both Jili and Meizu.
(The header image of this article comes from Meizu Technology's official Weibo.) ）