2021 is a year of counterattack for Apple.
In China, Huawei's share once laid down was eroded by Apple, and domestic mobile phone manufacturers such as Xiaomi, OPPO, and Vivo had empty slogans, but they all lost to the iPhone13. After 7 years, Apple has regained the throne of China's smartphone sales champion. And almost in the field of high-end smartphones, to achieve a monopoly.
According to the latest data from countpoint, in the fourth quarter of 2021, the domestic smart phone market share, Xiaomi, OPPO, vivo, etc. are "standing still". Huawei's market share fell off a cliff, from 23% in the fourth quarter of 2020 to 7% in 2021, while Apple rose from 16% to 23%, replacing the original Huawei first. And at this time, Apple also won a Rare Earth order from a Jiangsu company of 50 tons per month and 600 tons a year. Many netizens angrily rebuked: How long has it been since Huawei was suppressed!
As an electronics company, why did Apple buy rare earths, and why did a Chinese company sell a huge amount of Chinese strategic resources for an art company? This starts from the ultra-high profit margin of Apple's mobile phone.
First, in 2021, that Apple is back
In the domestic market before 2021, the market share of Xiaomi, OPPO, Vivo and Apple is between Bozhong, but in terms of profit margins, the two sides are far apart. According to Xiaomi's financial report for the first three quarters of 2021, the net profit of Xiaomi mobile phones is only 6.9%; oppo and vivo, although they do not disclose their financial positions, but according to IDC data estimates, the net profit is about 5%. According to the statistics of Apple's financial report in the first three quarters of 2021, Apple's cumulative revenue is 282.5 billion US dollars, net profit is 85.16 billion US dollars, and the net profit margin is as high as 26.23%. The higher the net profit, the stronger the profitability, so why is Apple's profitability 4 to 5 times that of its Chinese counterparts, which is also a world-renowned smartphone manufacturer?
Huawei President Ren Zhengfei once mentioned in Huawei's internal meeting that Huawei's logic of building an ecosystem, Huawei's development must ensure that upstream and downstream have food to eat, and do not be the "Western Chu Overlord". Apple, on the other hand, has its principles set out in jobs' time: everything must be under control.
All along, Apple all related to their own production system technology patents, key components of the design, rarely outsourced, even to "gentle and elegant" Jobs successor Tim Cook, also adhere to this principle, and even the vast majority of Apple mobile phone and computer chips, such as A series, M series, are independently developed and produced by Apple, the integration of the whole industry chain reduces the "middleman to earn the difference", saving the time wasted in the negotiation of each company, avoiding each other's information asymmetry, Thus helping Apple achieve ultra-high profit margins.
Of course, there are exceptions, such as the 5G baseband chip of the iPhone 12~14, and Apple uses qualcomm X series model products. With the first-mover advantage, Qualcomm baseband chips have long occupied nearly half of the market share of the smartphone market. Holding a large number of patents on the underlying architecture of traditional communications, Qualcomm has become the "behind-the-scenes boss" of major mobile phone manufacturers. Qualcomm is a big company in the field of baseband chips, so that Apple is always in the throat.
Therefore, some time ago, Apple bypassed the iPhone 14 and directly publicized the iPhone 15, especially focusing on Apple's self-developed baseband chip. So what is the relationship between chips and rare earths?
Second, what is the relationship between rare earths and chips?
Rare earth, is a series of rare metal elements collectively, divided into light rare earth, heavy rare earth two kinds of atomic weight. A certain proportion of rare earth components can greatly enhance the performance of iron, magnesium, aluminum and other metals, so in the traditional metallurgy, chemical, glass ceramics and other processes, rare earths have a broad application space.
With the rapid development of the era of electronic information technology, rare earths have become indispensable raw materials in the fields of optics, ceramic superconductivity, display panels, and chip manufacturing. Among them, lanthanum, cobalt, neodymium and other elements, due to their excellent photo-electromagnetic physical characteristics, are widely used in the manufacture of mobile phone parts, including qualcomm's baseband chips.
In order to improve its own layout in the field of baseband chips, some time ago Apple reached a cooperation with Xintai Company, a subsidiary of Jiangsu Huahong Technology, and agreed to provide Apple with 50 tons of rare earth products every month from 2022. Today, with the increasingly tight international supply of rare earths and soaring prices, Xintai's provision of huge rare earth products seems to have the meaning of helping Apple consolidate its market position. It is no wonder that many domestic netizens will question why businessmen are so forgetful, and how long has Huawei been going on.
At present, China's proven rare earth reserves account for 36.7% of the world's total, for a long time, China's rare earth industry has assumed the main responsibility for the world's rare earth supply, but it has not obtained matching economic benefits.
First, due to the lack of a regulatory system, the chaos of rare earth development is rampant, which not only reduces the bargaining initiative of Chinese rare earth enterprises, but also leads to serious environmental pollution.
Second, the core patents of high-end rare earth processed products are controlled by enterprises such as Europe, the United States and Japan, forming a situation in which China contributes to the work and foreign companies enjoy their success.
III. Conclusion
However, it is gratifying that at the end of 2021, the China Rare Earth Group, which is jointly funded by the "national character" mining giants such as Chinalco, Minmetals and China Iron and Steel Research Institute, marked a new stage of "national overall planning and consistency" in the development of rare earths in the mainland.
From now on, foreign companies will face a unified voice when they talk to Chinese companies in the field of rare earths. Acts that do not conform to the national strategy and help foreign companies seize the Chinese market and disrupt China's pricing power in the world rare earth industry will be curbed.