Image source @ Visual China
Text | Financial Stories, author | Wen Yue, Editing | Tiannan
China's smartphone shipments in 2021 will increase by 13.9% year-on-year, which seems to be just a return to the light.
On March 21, 2022, Tianfeng International analyst Guo Mingji said in a social media post that China's major Android mobile phone manufacturers have cut orders by about 170 million units this year, accounting for 20% of the original 2022 shipment plan.
Regarding the downward pressure on China's smartphone industry in 2022, it can be seen from the sales volume in February. According to data disclosed by market research agency CINNOResearch, in February 2022, the total sales volume of China's smartphone industry was about 23.48 million units, down 20.5% year-on-year and 24.0% month-on-month.
Considering that most smartphone brands have launched their annual flagship products before the end of 2021, and February 2022 coincides with the Spring Festival promotional season, sales in China's smartphone industry are still plummeting, which is evident in the chill.
The user does not change the machine, the chip does not give force
First of all, it is undeniable that as the downstream of the industrial chain, the smartphone market will inevitably be affected by the oligopoly of the upstream supply chain to some extent.
Taking chips as an example, in December 2021, Qualcomm released the annual flagship processor Snapdragon 8Gen 1 chip. Considering the poor performance of the Snapdragon 888, many mobile phone manufacturers have great expectations for this processor.
But in early 2022, South Korean media TheElec quoted supply chain insiders as saying that due to the immature process of Samsung's 4nm process, its FOUNDRyo 8Gen1 yield rate was only 35%. This may in turn affect the shipments of downstream smartphone manufacturers.
For example, on December 15 and 17, 2021, the Motorola Edge X30 went on sale separately, but it was sold out of stock in an instant.
In this regard, on December 17, 2021, Weibo certified as the general manager of Lenovo's mobile phone business department in China," "Magical Brother", said: "Edge x30 is quickly sold out again, today's goods are indeed not as much as when they were sold the day before yesterday, forgive me for not being able to chase so fast."
Limited production capacity has made smart phone manufacturers extremely worried, and the Snapdragon 8Gen 1 has a "pendulum" problem.
On December 12, 2021, Bilibili UP master "Geekerwan" evaluated its "power consumption explosion and weak performance" after testing the Qualcomm Snapdragon 8 Gen1, but there was a big improvement in power consumption and GPU, and it was difficult to achieve both heat dissipation and performance.
This also makes many mobile phone manufacturers helpless, because the volume and surface area of the mobile phone are fixed, it is difficult to solve the heat dissipation problem through a large area of heat dissipation board, and can only take the initiative to "lock the core" operation on the Snapdragon 8 Gen1. This also means that processors that could have had 100% performance may end up with only 80 or 90% performance.
In this regard, on February 16, 2022, Lu Weibing, a partner of Xiaomi Group and general manager of the Redmi brand, spat bitterly at the Snapdragon 8 Gen1 when he released the Redmi K50 e-sports version of the mobile phone: "I also know that everyone may not be so satisfied with this broken chip, right, but it is still the most powerful processor we can choose today, so Qualcomm should refuel." ”
In response to the performance of Snapdragon 8 Gen1, some users told the "Financial Story Club", "Since the manufacturer will lock the core to reduce performance, then why should I spend money to buy the latest mobile phone?" Wouldn't it be better to use the old model directly? ”
In fact, the energy consumption ratio performance of the Snapdragon 8 Gen1 is easily reminiscent of the Snapdragon 820 released by Qualcomm in 2015, known as the "Fire Dragon".
Overall, since it has just been listed, the Snapdragon 8 Gen1 with a low yield may not be able to meet the spring listing boom of smart phone manufacturers, although this problem may be alleviated in Q2 2022 with the transfer of Snapdragon processors to TSMC production, but at the same time, the mobile phone equipped with Snapdragon 8Gen1 has appeared in performance "reversing" phenomenon, which further reduces the attractiveness of flagship mobile phones.
However, it is worth noting that after the Snapdragon 820, China's smartphone market did not shrink because of this. According to data released by Canalys, in 2016, China's smartphone market shipped 470 million units, an increase of 11% year-on-year.
From this point of view, although the fluctuations of the upstream industry chain will have a certain impact on the sales of smart phones, in the final analysis, consumer demand is the driving force behind the growth of shipments in the smart phone industry, if the demand for consumers to change machines has dropped sharply, then no matter how much smart phone manufacturers exert their strength, it may be difficult to recover the decline of the market.
Once upon a time, on the basis of hardware terminals, sensors, and network innovations, smartphones brought new application scenarios to the consumer market. For example, the taxi scene is based on special attributes such as smartphones being online at any time, portable, positioning, and navigation. Although the PC also has the characteristics of online, its inconvenient carrying and cannot be positioned also determines that in the era of desktop Internet, it is impossible to have an online taxi economy.
On the basis of this application scenario innovation, smart phones have gone through more than ten brilliant years, but unfortunately, with the high maturity of the smart phone supply chain, in recent years, we have not seen smart phones spawn enough mainstream new application scenarios and new mainstream functions, which also inhibits the enthusiasm of mobile phone users.
On the topic page of "Why young people are reluctant to change their mobile phones", Weibo user "Pie Big Shark" said: "Android is rotten without innovation, Apple is quite durable, naturally not changed"
According to the "2021 China Mobile Internet Annual Report" released by QuestMobile, in December 2021, the top three monthly active monthly activities in China's mobile Internet first-level industries were mobile social, mobile games and mobile shopping, which are basically the same as in the 4G era.
2016-2020 global average smartphone price image source: Counterpoint
At the same time, data released by Counterpoint shows that in 2021, the average global price of smartphones reached $322 (about 2,046 yuan), an increase of 4% year-on-year, a record high.
This is mainly because the market dividend continues to decline, and smartphone manufacturers are looking to impact the high-end market. Counterpoint data shows that in 2021, the proportion of global smartphone sales of more than $400 (about 2541 yuan) reached 27%, an increase of 4% year-on-year.
On the one hand, smart phones have not created new application scenarios; on the other hand, the more expensive related products are sold, the impact of this is naturally that consumers are becoming more rational.
On February 25, 2022, Ethan Qi, deputy director of research at Counterpoint Research, said in an interview with Phoenix Technology: "At present, the average replacement cycle of users has exceeded 31 months, and the mobile phone market as a whole is micro-innovation. "In contrast, at the beginning of 2019, the replacement cycle of Chinese mobile phone users was only 24.3 months.
The "sinking" apple has not been able to save its respect?
Regarding the sharp decline in consumer enthusiasm for smartphones, we can also see the distribution of the global smartphone best-seller list.
2021 Global TOP10 Best-Selling Mobile Phones TOP 10 Ranking Source: Counterpoint
In March 2022, Counterpoint released the TOP 10 of the 2021 global smartphone sales list. Except for a few high-end mobile phones such as the iPhone 13, most of the other products are old low-end products. For example, the second-generation iPhone SE was released on April 15, 2020, nearly two years ago.
However, Apple is pleased that 70% of the top 10 global smartphone sales in 2021 will be occupied by the iPhone. But as the second-generation iPhone SE hot sale revealed, it has continued to sell well in the past few years, mainly because Apple has repeatedly overdrafted the high-end vitality of the iPhone through the strategy of price reduction.
For example, in 2019, when Apple launched the iPhone 11 series, it directly set the starting price at 5499 yuan, which was 15.38% lower than the price of the previous generation of products of the same level.
From the market level, Apple's price reduction strategy has indeed played an immediate effect. IDC data shows that in the first half of 2019, iPhone shipments were 6.6 million units, accounting for 6.7%, down 6.2% year-on-year; in Q3 2019, iPhone shipments were 8.1 million units, accounting for 8.2%, up 5.9% year-on-year. In Q3 2019, only Apple and Huawei's shipments bottomed out.
However, with the market dividend peaking, the lack of innovation of the iPhone is also difficult to hide fatigue.
On March 28, 2022, Guo Mingxi posted a message on social media that because the demand for the third generation of the iPhone SE is much lower than expected, Apple expects to cut the orders of 2 million to 3 million units of the third generation of the iPhone SE in 2022, accounting for about 20%. At this time, it is only about 20 days before the third generation of iPhone SE came out.
In response to the lack of innovation of the iPhone, Weibo netizen "ALANONE_" said: "My 64g iPhone X has been used for more than four years, the face is broken and has not been changed, the battery has been replaced, the lens has fallen at night and it is not good to take pictures, and occasionally a little small card, the others are fine, and there is no problem in insisting on using it for another year or two." ”
In fact, as a recognized high-end brand in the smartphone industry, the iPhone is doomed, which also shows the dilemma of most smartphone brands.
Source: CINNOResearch
According to the data released by CINNOResearch, in February 2022, if the positive impact of the relatively low shipment base after honor independence is not taken into account, the "main theme" of China's top five smartphone manufacturers is the decline in shipments, whether it is year-on-year or month-on-month.
Taking Xiaomi as an example, its shipments in February 2022 decreased by 17.9% month-on-month and 20.1% year-on-year. This is also based on the fact that the starting price of its flagship product, the Xiaomi Mi 12 series, fell by 7.5% year-on-year.
Some Xiaomi users said: "Last year, I changed the Xiaomi 11U, and this year's 12 series feels that there is no bright spot, and it should not change the machine again in three years."
Mobile phone manufacturers each show their magic to break the "inner volume"
In the face of the continuous shrinking of the market, smartphone manufacturers will certainly not sit still, but combine their brand tone, new changes in the supply chain and potential new needs of consumers to try their best to break through the industry.
For example, on March 28, 2022, Vivo officially released news that its first folding screen flagship product, vivoX Fold, will be officially released on April 11.
In fact, vivo's choice is not an isolated case, according to the statistics of "Financial Story Club", as of April 2022, there are already seven smartphone manufacturers including Huawei, Xiaomi, OPPO entering the folding screen track.
On the one hand, of course, because the folding screen supply chain is gradually mature, it can support mature consumer electronic products, but more importantly, it must be because these smart phone manufacturers see the potential large-screen demand of consumers.
Before the birth of the iPhone, many people may think that the two- or three-inch straight-panel mobile phone screen is big enough, but with the advent of the iPhone, most people may be overwhelmed by the 3.5-inch screen. Nowadays, when you see 6 or 7-inch smartphones, many people may not feel strange.
The evolution direction of this product actually explains the potential demand of consumers for large screens. For example, in 2011, when the screen of a smartphone hovered around 3.5 inches, Samsung released the 5.3-inch Galaxy Note series, which sold 10 million units.
However, it cannot be ignored that the basic requirements of smartphone portability determine that the size of the screen cannot be expanded indefinitely.
From the perspective of the industry, since 2018, the screen of the smartphone industry reached 6 inches, and the mainstream screen size of the related market has not grown for many years.
However, the folding screen can have both a large screen and portable characteristics at the same time. For example, the OPPOFind N released in December 2021 has a 5.49-inch external screen and a 7.1-inch folding screen comparable to a tablet computer on the basis of only 132.6mm, 73mm and 15.9mm in three circumferences.
Of course, not all smartphone manufacturers are targeting the folding screen track. Redmi and Realme, for example, try to attract the market through "cost-effectiveness".
Redmi K50 image source: Xiaomi official website
On March 17, 2022, Redmi released the Redmi K50 series, which starts at $2,399. The flagship version of the series is equipped with a Tianji 9000 processor, 120Hz Samsung 2K flexible direct screen, 120W +5000mAh single cell battery combination.
Five days later, Realme also released the RealmeGT Neo3 series, which starts at $1,999. The flagship of the series is equipped with a Tianji 8100 processor, built-in Pixelworks unique display chip, and the first 150W fast charging technology.
The contribution of cost-effective mobile phones to brand shipments is obvious, when the Release of redmi K50 series, Xiaomi Group partner, president of China, international department, Redmi brand general manager Lu Weibing revealed that the cumulative sales of Redmi K40 series exceeded 10 million units, "worthy of the title of 'flagship welder' in 2021." ”
However, because the profit of cost-effective mobile phones is too thin, Apple does not seem to plan to reduce the price of mobile phones and compete with competitors, but hopes to exert the strength of "Apple Family Barrel" to attract consumers.
In March 2021, Bloomberg quoted insiders as saying that Apple was planning to launch a hardware subscription service that would allow consumers to rent iPhones in the form of "subscriptions." In this regard, Bloomberg said: "This will increase user stickiness and enable consumers who want to regularly upgrade their phones more firmly into Apple's ecosystem."
But some consumers said: "(Rent an iPhone) still depends on the price, if you want a few hundred dollars a month, then I may still choose to buy an iPhone." ”
Overall, looking back at the growth of smartphone shipments in 2021 from the time point in early 2022 seems to be just an accident. In the context of increasing uncertainty in the supply chain and reducing consumers' desire to change machines, the smartphone market may continue to shrink.
In this context, it can be found that most smart phone manufacturers are no longer blindly pursuing high-end products as in previous years, but hope to combine the needs of consumers and their own product advantages to create products.
For example, the popularity of the folding screen market is because the smart phone sees that the consumer market still has a strong demand for large screens. According to the survey data of Omdia, a market research agency, in 2021, the shipment volume of folding screen smartphones will be 9 million units, an increase of 309% year-on-year. Compared with the conventional folding screen market, the growth rate is obvious.
In addition, there are also smart phone manufacturers who see the popularity of the IoT market and try to leverage the diversified ecology with smart phones as the core. Taking Xiaomi as an example, the financial report shows that in 2021, its annual revenue was 328.3 billion yuan, an increase of 33.5% year-on-year. The IoT and consumer products business continued to grow, with revenue of 85 billion yuan, accounting for 25.9% of total revenue, an increase of 26.1% year-on-year.
At the glory new product launch on April 7, an electric scooter priced at 2299 yuan became one of the protagonists.
However, considering that the smartphone industry has been running wild for more than a decade, whether the practices of these smart phone manufacturers have really brought a second spring to the smart phone industry, we still leave the answer to time.