Under the all-round layout of display technology, Internet, hard technology and innovative business, TCL Electronics has become one of the few industry leaders who have crossed the industry trough and ushered in the "intelligent" spring.
During this year's two sessions, Li Dongsheng, a deputy to the National People's Congress and founder of TCL, said: "China's high-tech manufacturing industry has the ability to challenge the international leader in many industrial technology fields, but there are still gaps in some important areas. We can only take the road of scientific and technological self-reliance and self-improvement, and we must break through the key core technologies of 'card neck', such as integrated circuits, precision materials, core devices, high-end equipment and other fields. ”
At the end of the last century, Li Dongsheng led TCL into the era of globalization. When TCL's acquisition of Thomson's color TV business was just completed, color TVs began to change generations, LCD flat-screen TVs rose from the ground, and TCL's globalization road fell into a passive situation.
Three years later, the eagle was reinvigorated and once again spread its wings, and the road to globalization allowed TCL to break through among a number of Chinese companies and lead the way.
In 2009, Li Dongsheng made a decision to affect China's consumer electronics industry: he planned to invest 24.5 billion yuan to build an 8.5-generation LCD panel production line. It was the hard years when China's electronics industry was "missing cores and few screens" and relying heavily on imports.
Due to the lack of independent technology, Japanese and Korean manufacturers such as Samsung, LG, and Sony often join forces to manipulate prices and supply, making LCD panels once account for 80% of the total cost of televisions. At that time, China imported 1.95 billion liquid crystal display panels at a price of $40.75 billion.
At a time when the industry is in turmoil, companies such as TCL have launched a decade-long technological catch-up. At the end of 2021, Caijing magazine selected China's top ten expansion industries, of which the display device industry ranked first.
It is the technical autonomy of the panel industry that has promoted the overall rise of China's consumer electronics industry today. The results proved that Li Dongsheng's precautions once again added an indispensable stroke to the TCL territory.
In 2021, the top fifteen brands in global TV sales account for 8 domestic products. Among them, the highest sales volume is TCL, ranking among the top three in the world, second only to Samsung and LG. The layout of TCL brand wisdom screen and then TCL panel has always been inseparable from Li Dongsheng's original intention: basing chinese brands on the world and challenging the future with Chinese technology.
In today's era of Internet of Things, artificial intelligence, and 5G, the answer and where is the future that leads TCL to continue to move forward?
TCL Electronics' Answer
Since 2020, the epidemic has enveloped the world, but it has been a windfall for the TV industry. According to Strategy Analytics, global smart TV sales in 2020 increased by 7.4% year-on-year.
But as the epidemic no longer heats up in the second half of 2021, the enthusiasm for TV sales is also decreasing. In 2021, global TV shipments were 214.5M (M= million units), the lowest point in the global market in the past six years, down 6.2% year-on-year; the shipping area was 148.6M㎡, down 0.7% year-on-year. The industry is in a trough, and where the future lies, someone needs to give an answer.
The answer given by TCL is that the technology upgrade: "Mini LED".
On March 9, TCL Electronics (01070.HK) released three new Mini LED high-end products: the flagship QD-Mini LED smart screen X11, the classic version of the QD-Mini LED smart screen C12E and the giant screen version of the QD-Mini LED smart screen 98X9C Pro.
These three new Mini LED smart screens all use the third generation of QD-Mini LED technology, combining the advantages of LCD and OLED display technology, upgrading the area light source to a pixel-level point-controlled light source, while following the world's leading QLED technology, while achieving ultra-high contrast, light control is more accurate, brighter, darkfield starry sky halo-
Among them, the fist product TCL Lingyao QD-Mini LED smart screen X11 has 2304 partition quantum dot light control and 2000nit peak brightness, 100 micron tiny Mini LED chip, equipped with DBR nano composite vapor film and optical image microlens, accurately realize pixel-level point light control, the display effect is better.
Thanks to the advance layout of Mini LED technology, in 2019, TCL Electronics became the first company to mass-produce Mini LED smart screens, focusing on large-size high-end products. Subsequently, Samsung, LG, Xiaomi, Huawei and other companies quickly followed up with Mini LED TV. In 2021, TCL Electronics' Mini LED smart screen sales ranked first in domestic omni-channel sales.
At present, Mini LED technology has been adopted by the majority of TV brands.
The Mini LED technology, led by TCL Electronics, has higher brightness, color gamut and clarity than olED bets on Korean manufacturers, while the large size cost is lower and the service life is longer. In addition to smart TVs, they are also used in other consumer electronics products such as automobiles, VR, and notebooks.
With the technological evolution of Mini LED to Micro LED, the future of TCL electronics with early card slots has a lot of imagination.
According to the financial report, in 2021, TCL electronics revenue was HK$74.85 billion, an increase of 46.9% year-on-year; gross profit reached HK$12.53 billion, an increase of 29.7% year-on-year.
Among them, TCL's global total revenue was HK$49.27 billion, an increase of 24.3% year-on-year. The color TV brand sold 23.58 million units, ranking third in the world, and the market share further increased by 0.8 percentage points to 11.5%.
This performance is better than the smart TV industry. According to Omdia statistics, global TV shipments in 2021 fell by 5.3% year-on-year, and sales increased by 14.8% year-on-year.
When analyzing the performance of the industry in 2021, we found three reasons for the industry's predicament in 2021.
The supply side is limited: THE TV panel has experienced a rare unilateral rise in 14 months, and the price of some main size panels has risen by more than 150%-200%, but the price of the whole terminal has only risen by 30%-50%; the demand side has fallen: the "home economy" of the epidemic has caused a significant increase in demand in 2020, and the easing of the epidemic has led to a decline in demand in 2021.
But with excellent globalization capabilities, TCL Electronics has crossed the industry cycle fluctuations. In 2021, TCL Electronics' overseas market sales increased by 7.6% year-on-year, achieving contrarian growth, the average price of high-end products increased by 25.1% year-on-year, and overseas market revenue reached 36.03 billion Hong Kong dollars, an increase of 34.7% year-on-year.
High-end, large size, this strategic idea reflects TCL Electronics' insight into the times.
According to the statistics of Aowei Cloud Network, the market share of 65+ products will reach 34.5% in 2021, an increase of 9.5 percentage points, a retail volume of 75+ inches increased by 69.7% year-on-year, the retail volume of 80+ inches increased by 114.8% year-on-year, and the retail volume of the high-end market of more than 8000 yuan increased by 41.3% year-on-year.
The trend of large-sized industry continues, and TCL smart screen will accelerate the penetration of super-sized smart screens in the future with the layout of TCL Huaxing in the production line of super-large panels, and further exert the advantages of industrial chain integration.
After the advent of the 5G era and the post-90s generation becoming the main consumer group, the long video industry led by Aiyouteng has opened a battle for content and technology upgrading.
Among them, 4K, 8K resolution, Dolby Vision's high color gamut, and high dynamic picture technology have become the mainstream. Under the ultra-clear film source, whether it is a TV or a mobile phone, consumers have more demand for ultra-high-quality screens.
In 2021, TCL Electronics' sales volume of high-end smart screens increased significantly, and the sales volume of quantum dot smart screens and Mini LED smart screens increased by 53.8% and 50.5% year-on-year, respectively. Although the market sales volume is lower in 2021, the market sales scale continues to expand.
According to NTCysd's calculations, the global home appliance market size in 2021 is about 1,351.9 billion yuan, and the agency expects that the global home appliance market size will reach 1,834 billion yuan in 2028, and the market size is still expanding.
Relying on the technological evolution of bets on Mini LED technology, and relying on the ability to lay out the world, the results achieved by TCL Electronics at the trough of the industry are worth thinking about in the industry.
Soft and hard integration
In this year's government work report, the focus is on green home appliances and smart home appliances, with home appliances going to the countryside and replacing old with new as the main means, with the goal of expanding domestic demand and promoting consumption.
In 2008, in response to the financial crisis, we proposed to stimulate domestic demand. It was also in that year that home appliances went to the countryside as one of the important means to stimulate domestic demand, and it was vigorously launched. In 2009, 34.5 million units of home appliances were sold to the countryside, with a sales amount of 64.7 billion yuan. For the pull of domestic demand, it is obvious.
For many families, the last round of home appliances to the countryside after 10 years, most of the home appliances service life has almost reached the upper limit. Home appliance replacement is imperative. This is largely the creation of a new piece of cake. However, it should be noted that the main force of this round of consumption is the middle-aged and young people after the 80s and 90s.
Enterprises should realize that the transformation of consumer groups often means that the logic of buying home appliances has also changed.
According to the report of the 36Kr Research Institute, compared with traditional consumers who pay attention to brand and price, they need to be more intelligent and "connected to other home appliances". This is the Internetized generation, and the products they need to be Internetized.
Thunderbird Technology, the domestic Internet business entity of TCL Electronics, hit this pain point. Thunderbird is primarily responsible for the OTT business, which is a content integration platform.
OTT refers to the TV through the open Internet to obtain various resources, the use of open Internet to transmit data, with the hardware for traffic monetization characteristics.
According to Aowei interactive entertainment data, the average daily active scale of OTT smart large screens in 2021 has reached 110 million units, an increase of 8% over last year, of which the average daily active scale of smart TVs is close to 100 million units, an increase of 10% over last year.
Based on the advantages of hardware, TCL Electronics' Internet business has enjoyed the dividends of the OTT industry.
In 2021, TCL Electronics' Internet business revenue in 2021 was HK$1.85 billion, a substantial increase of 49.9% year-on-year, of which the Revenue of the Chinese market was HK$1.49 billion, a substantial increase of 63.7% year-on-year.
Among them, Thunderbird Technology continued to innovate in content, with children's business revenue up 316.8% year-on-year, app store business up 38.2% year-on-year, China's monthly active users up 11% year-on-year to 19.88 million, ARPU up 43.4% year-on-year to 76.2 Hong Kong dollars. The increase in the revenue scale of Thunderbird Technology benefited from the increase in membership penetration rate and user payment rate.
In 2021, the proportion of Thunderbird Technology's membership business and vertical and innovative business has increased, which can be seen that in the future, the company will make efforts in the direction of increasing use scenarios and creating new business on the OTT platform.
In addition, Thunderbird Technology also said that in the future, it will increase investment in high-margin Internet business - children's business, focus on children's education content on the OTT platform, and create new growth points for domestic Internet business.
Today's use of smart screens has changed from watching TV to becoming a "dispatch center" for families and connecting more smart devices. Online fitness, online K-songs, online education, online games and other functions are what users need.
In other words, TCL Electronics' Zhiping + Thunderbird is the establishment of a family-centered Internet platform.
As for the global Internet business, in 2021, TCL Electronics' global Internet business revenue reached HK$360 million, an increase of 11.2% year-on-year.
Content aggregation application TCL Channel has completed the commercialization transformation, and has been launched in 58 countries such as North America, Europe, Weekly, and Asia-Pacific, an increase of 46 countries over 2020, and the cumulative number of users worldwide has reached 7.05 million.
TCL Electronics continues to deepen cooperation with overseas Internet giants such as Google, Netflix, roku, and more importantly, it has also added operating revenue from the Google platform in 2021.
The latest research report of CITIC Securities pointed out that the profitability of TCL's electronic Internet business is outstanding, and the upgrading of overseas cooperation is expected to drive the release of profits.
Future and innovation
What is the secret of TCL Electronics' success? The answer they give is very simple, it is the brand, the product, the innovation. The article sounds ordinary, but behind it is a guiding ideology that can see the future: adhere to "globalization, technology" and pursue the value of creating sustainable growth for consumers.
Today, many companies are saying that globalization is difficult, can not go out, the domestic market increment slows down, and the overseas market is vast. Such a dilemma is actually the lack of a guiding ideology to see the future. TCL has been internationalized since 1999, and the success we see today is actually 20 years of painstaking management.
Under the strategic vision of having a perspective on the future, how should TCL Electronics do science and technology?
High-end breakthroughs, accelerate the seizure of overseas markets, achieve advantages on new tracks, and then with standardization, scale, strategic cooperation, the whole chain to improve turnover efficiency and reduce production costs, to achieve high-quality growth, the establishment of high-end international brand image, to achieve brand premium and influence enhancement.
At the same time, we will maintain the vitality and ability of innovation, continue to lead the industry, enhance product competitiveness, and make higher product values and prices.
TCL Electronics actively promotes the development of science and technology in the industry, focusing on the technology innovation platforms such as picture quality, human-computer interaction, operating system, AR optical design, audio and video, 5G, and artificial intelligence, to create top core technology control points and create the ultimate experience and value for users.
At the same time, TCL Electronics has also continued to increase the construction of cloud technology and big data platform, improve the development efficiency of Internet applications, and support agile Internet business innovation. In 2021, the company's R&D expenses increased by 52.2% year-on-year to HK$2.48 billion, with a R&D expense ratio of 3.3%.
In addition, under the advantages of existing channels and brands, TCL Electronics combines the core technologies accumulated over the years to develop all categories of business, in order to create an "intelligent IoT ecosystem" for consumers.
In 2021, TCL Electronics launched a number of new categories such as educational tablets, AR/XR smart glasses, sweepers, air purifiers, etc., among which the sweeper Sweeva 6500 won the CES "2022 Innovation Award", and the air purifier Breeva A2 and A5 won the 2021 German "Red Dot Award".
In 2021, the total sales volume of TCL's electronic intelligent connection business was 5.25 million units, an increase of 33.5% year-on-year, of which router sales ranked first in Europe and third in the world, and operating income was HK$1.56 billion, an increase of 34.2% year-on-year. Revenue from the smart home business was HK$610 million, up 78.9% year-on-year.
The development of home appliances to intelligence is actually an inevitable trend. From the perspective of the United States, when the home appliance industry enters a mature period, products begin to develop intelligently.
According to the data, from 2016 to 2020, the scale of China's smart home market increased from 260.85 billion yuan to 514.47 billion yuan, with an average annual compound growth rate of 18.51%. The China Commercial Industry Research Institute predicts that the size of the mainland smart home market will reach 651.56 billion yuan in 2022.
After having the dual capabilities of science and technology and integration of soft and hard, TCL Electronics can accumulate in the field of smart homes.
And TCL Electronics also released the world's first biocular full-color Micro LED holographic optical waveguide smart glasses - Thunderbird Smart Glasses Pioneer Edition, and then at the CES exhibition at the beginning of this year, it launched the XR second-generation glasses TCL NXTWEAR AIR smart glasses, which can be seen that TCL Electronics has a very huge competitive advantage in XR technology.
TCL Electronics announced at the end of 2021 that it intends to establish a joint venture with TCL Industrial to enter the AR track. This time node into the AR field is obviously well thought out: the first AR hardware is the most important screen, which is the advantage of TCL Electronics.
Second, after a number of technology giants have laid out the meta-universe, the industry dividend period has arrived, and Guojin Securities is expected to usher in the explosive growth of the AR glasses consumer market in 2024-2025. IDC also predicts that AR devices will grow from 5 million in 2020 to 21 million in 2025.