Xiaomi Apple made cars, Weilai Geely made mobile phones, and everyone began to not do business?

Text/Wise Finance Li Youwei

Editor/Nan Zhang

With the multi-dimensional complex environment of economic recovery and market demand in parallel, new energy vehicles have gradually become one of the most concerned tracks.

At the same time, a car-making frenzy is also spreading among mobile phone manufacturers, apple, Samsung, millet, Huawei, OPPO and Sony have announced that they have cut into the new energy vehicle track. But just when mobile phone manufacturers have crossed borders to build cars, auto manufacturers have also set their sights on the mobile phone industry.

According to people familiar with the matter, NIO has entered the mobile phone industry, and Yin Shuijun, former president of Meitu Mobile Phone, has joined and taken the lead in taking charge of NIO's mobile phone business. The source also revealed: "Weilai's mobile phone planning predates Xiaomi's announcement of car building, and the project has been established for a while." ”

Another insider said that basically the possibility of Weilai OEM doing mobile phones can be ruled out, and the high probability is that it will be a mobile phone under its own, and there will be a lot of functions that can interact with cars.

Prior to this, the rumors of Weilai making mobile phones had become very popular. A netizen named "Rogue Scout" broke the news on February 15: Weilai mobile phone department has recently made a lot of moves, funds are still continuing to increase investment, there are more than 100 new offers after the year, and more than 200 R& D jobs are expected to be added in Shenzhen in the near future.

In response to various rumors, Weilai did not admit or deny, but responded that there is no information to disclose at present, and further information will be communicated with everyone.

In fact, it is not a new thing for automakers to cross-border mobile phones. In September 2021, Hubei Xingji Times Technology Co., Ltd., which holds 55% of Geely's chairman Li Shufu, signed a strategic cooperation agreement with Wuhan Economic and Technological Development Zone to officially announce its entry into the mobile phone industry, and in January 2022, it was reported that Geely was acquiring mobile phone manufacturer Meizu.

With the continuous improvement of the level of automotive intelligence, the correlation between the two industries is gradually strengthening. Whether it is Xiaomi car manufacturing, or Huawei cooperating with car companies to build cars, its purpose is to achieve deeper interconnection between cars and mobile phones. But at this node to enter the mobile phone industry, is it really a good time for Weilai?

First, the main business is under pressure, and the growth rate of Nio's revenue is slowing down

Whether judging from the environment or the current situation, Weilai mobile phones do not seem to be a wise choice. One point that cannot be ignored is that Weilai's direct business is under tremendous pressure, and the competitive landscape of the new energy automobile industry seems to be facing a historic reshuffle.

According to the delivery volume of each company in 2021, Xiaopeng Automobile delivered 98,155 vehicles in 2021, leading Weilai to the top of the annual sales list of new car-making forces, while Weilai ranked second with the delivery of 91429 vehicles, it is worth noting that the delivery of ideal cars was 90491 vehicles, and the gap between Weilai and Weilai was less than 1,000.

The amount of delivery reflects the popularity of the three new forces of car manufacturing to a large extent, if the delivery volume is used as the criterion, the former "Wei Xiaoli" has become "Xiao Weili".

Among the three new forces that have made cars at the head, it is a fact that Weilai is gradually falling behind. According to the third quarter financial report, NIO's total revenue was 9.81 billion yuan, an increase of 116.6% year-on-year; The total revenue of Xiaopeng Automobile was 5.72 billion yuan, an increase of 187.4% year-on-year; and the total revenue of Ideal Automobile was 7.78 billion yuan, an increase of 209.7% year-on-year.

Only from the perspective of total revenue, WEILAI is still in a leading position, and all three have achieved double growth, but if the vertical comparison is viewed, Weilai's total revenue growth does not seem to be optimistic.

In the second quarter of 2021, the total revenue of WEILAI, Xiaopeng Automobile and Ideal Automobile was 8.4 billion yuan, 3.76 billion yuan and 5.04 billion yuan respectively, corresponding to a month-on-quarter growth rate of 16.8%, 55.9% and 54.4% respectively in the third quarter, which means that the total revenue growth rate of Weilai has tended to slow down, and Xiaopeng Automobile and Ideal Automobile are chasing after each other.

However, losses are still the main theme of the three new forces of head car manufacturing.

In the third quarter of 2021, WEILAI's net loss was 835 million yuan, narrowing by 20.2% year-on-year and 42.3% month-on-month, while Xiaopeng Automobile's net loss was 1.595 billion yuan, an increase of 38.38% year-on-year and 33.5% month-on-month, compared with the net loss of Ideal Automobile to a record 21.5 million yuan, narrowing by 79.9% year-on-year and narrowing by 90.9% month-on-month, or becoming the first new force to achieve quarterly profitability.

At the same time, Nezha and Zero Run, the second echelon of the new car-making forces, have successively spread rumors of going to Hong Kong for listing. It is reported that Nezha Automobile has completed the third round of financing of the D round of more than 2 billion yuan, and has now opened a Pre-IPO round of financing with a target valuation of about 45 billion yuan, and plans to start an IPO in Hong Kong within this year. Similarly, Zero Run also submitted listing materials to the International Department of the China Securities Regulatory Commission, and will sprint to the Hong Kong Stock Exchange in the near future.

Various phenomena show that Weilai is not only facing the dilemma of slowing down revenue growth, but also facing the situation that competitors are catching up. At this time, entering the mobile phone field with extremely serious internal volume may not be a good time for Weilai, and the diversified layout will affect Weilai's main business.

Second, most of the cross-border mobile phone makers fold their halberds, and it is difficult for Weilai to escape bad luck?

The purpose of WEILAI's entry into the mobile phone market is not complicated, and there is a view in the industry that WEIlai does not seem to make mobile phones to compete directly with mainstream mobile phone manufacturers, but to achieve synergy with its new energy vehicle business.

This coincides with the purpose of Xiaomi and Apple to build cars. The logic of mobile phone factories to build cars is very clear, that is, the mobile phone market has been overly internally rolled, mobile phone manufacturers are eager to find a new track, and new energy vehicles provide an unprecedented opportunity.

As early as 2014, Apple launched the "Titan Plan", officially announced the construction of cars, and also spent a lot of money to hire executives from Ford, Mercedes-Benz and other car companies as its car project leaders. The new energy vehicle business is regarded by Apple as the second growth curve, and analysts from the AMERICAN investment research company Baird pointed out in the research report that the automobile market is a multi-trillion dollar market with huge long-term growth opportunities, and Apple's entry into the automotive industry is likely to usher in about $40 billion in growth.

According to people familiar with the matter, Apple has completed most of the core work of the chip processor on the first generation of cars, and plans to release self-driving electric vehicles as soon as 2025.

Xiaomi is also entering the new energy vehicle track for similar purposes. In March 2021, Xiaomi announced its intention to establish a wholly-owned subsidiary of the company to be responsible for the smart electric vehicle business. The initial investment is 10 billion yuan, and it is expected to invest 10 billion US dollars in the next 10 years.

In November 2021, Xiaomi announced that Xiaomi Automobile's headquarters base, sales headquarters and R&D headquarters were officially settled in Beijing Economic Development Zone, and that it would build a vehicle plant with an annual output of 300,000 vehicles in two phases, of which the production capacity of the first and second phases was 150,000 units. In the first half of 2024, xiaomi's first model will roll off the production line and achieve mass production delivery.

However, Weilai's entry into the mobile phone track needs to deal with challenges from two aspects.

On the one hand, the fierce competition in today's mobile phone market can be called "purgatory", and the space left for Weilai has been very narrow. According to the mobile phone market tracking report released by IDC for the fourth quarter and full year of 2021, in the fourth quarter of 2021, China's smartphone shipments were about 83.4 million units, down 3.5% year-on-year. In the whole of 2021, China's smartphone shipments were about 329 million units, a slight increase of only 1.1% year-on-year.

Among them, Vivo became the champion in the Chinese smartphone market for the first time with a shipment of 71 million units, and occupied 21.5% of the market share, while OPPO, Xiaomi, Apple and Honor ranked second to fifth respectively, accounting for 20.4%, 15.5%, 15.3% and 11.7% of the market share, respectively. The top five together occupy 84.4% of the market share, which means that the Matthew effect in the mobile phone industry is becoming more and more obvious, leaving a narrower and narrower living space for latecomers.

On the other hand, capital investment is also a major challenge for NIO. According to Xiaomi's financial report data, from 2016 to 2020, Xiaomi's expenditure on research and development investment has accumulated 27.9 billion yuan. In 2020 alone, Huawei invested 131.7 billion yuan in research and development expenses, while Apple also reached 127.7 billion yuan. For Weilai, whose main business is under pressure and is mired in losses, the investment in the mobile phone business will be a big burden.

Not only that, the marketing system of mobile phones and cars is very different, Weilai seriously lacks experience in making mobile phones, and needs to build a mobile phone supply chain system and sales channels from scratch, and whether Weilai adapts to the environment and playing style of the mobile phone industry is still unknown.

Before Weilai, there were countless examples of cross-border mobile phone failures, such as Gree, 360, LeTV, Lenovo, etc. have had the experience of making mobile phones, but due to various reasons, they have not received much repercussions in the end.

Among them, the purpose of Gree mobile phone is most similar to Geely and Weilai, and Dong Mingzhu once wanted to use mobile phones to open up mobile scenes and home scenes. However, due to the lack of selling points, unprofessional marketing and unprofessional team, the sales of the first generation of Gree mobile phones were dismal. At that time, there were media reports that the shipment of gree's first generation of mobile phones was about 100,000 units. Later, Gree Group successively launched the second generation of Gree, Gree color industry, Gree third generation and Dasong G5, but the shipment volume was also dismal, and even many times sent out the news that internal employees were required to buy and digest as prizes.

Gree cross-border mobile phones have summed up a very valuable experience for latecomers, that is, it is difficult to go through the way of self-creation behind closed doors. At present, the contradiction between how to maintain the lack of hematopoietic ability and continuous investment is still a problem to be solved in front of Weilai, even if it is not bad money, but in the face of a number of strong competitors, Weilai may want to figure out what core advantages it has in making mobile phones.

Whether Weilai mobile phone will be folded like Gree mobile phone is still an uncertain thing, but it is certain that for Weilai, making mobile phones will be a very difficult hard bone.