Huawei's press conference, lenovo is very anxious.
On April 20, 2022, Huawei held a new product launch conference for terminal commercial offices. Although the conference was short, it was no less significant than the launch of the first Honor mobile phone in 2011.
At this press conference, Yu Chengdong, managing director of Huawei and CEO of Terminal BG, announced that Huawei's "consumer business" will be renamed "terminal business" and officially enter the commercial market.
Intriguingly, on the same day that Huawei announced the transformation, Lenovo also held a ThinkFamily 2022 spring new product launch conference and launched three business flagship notebook products.
Considering that Lenovo has long focused on cultivating the commercial market, the press conference of the april 20 crash seems to have become a declaration of war between Huawei and Lenovo.
Huawei's consumer business continues to be under pressure
Although the transformation of Huawei is to some extent to meet the direction of the market and take the initiative to change, combined with financial data, Huawei actually has to change the pain.
Over the past decade, Huawei's financial data has climbed with the consumer business. Taking the 2019 financial report as an example, Huawei's revenue in that year was 858.8 billion yuan, an increase of 19.1% year-on-year. Among them, the revenue of consumer business was 467.3 billion yuan, an increase of 34% year-on-year, accounting for 54.41% of revenue.
This is mainly due to the large increase in shipments of Huawei mobile phones. According to data released by Canalys, in 2019, Huawei's mobile phone shipments were about 240 million units, an increase of 17% year-on-year, ranking second in the world.
If this trend is followed, Huawei's mobile phone shipments are likely to surpass Samsung and become the world's first. But in May 2019, due to geopolitical influences, the United States suddenly imposed sanctions on Huawei, resulting in Huawei no longer using the most advanced chips and network technology. Since then, Huawei's mobile phone has collapsed.
IDC data shows that since Q1 2021 fell out of the top five smartphone shipments list, Huawei mobile phones have been in line for "Others" and have not returned to the center of the smartphone industry. This also brings a severe test to Huawei's performance.
According to the financial report, in 2021, Huawei's revenue was 636.8 billion yuan, down 28.6% year-on-year. Among them, the revenue of consumer business was only 243.4 billion, down 49.6% year-on-year, accounting for only 38.2% of total revenue.
In this regard, Guo Ping, huawei's rotating chairman, publicly stated that in the past year, Huawei's C-end business has been greatly affected, and the revenue structure of the entire group has changed compared with previous years.
It is worth noting that in 2021, under the background of the decline in revenue of Huawei's two pillar businesses of operators and consumers, the enterprise business has burst out of the dawn of growth.
According to the financial report, in 2021, Huawei's enterprise business revenue was 102.4 billion yuan, accounting for 16.1% of the total revenue, an increase of 2.1% year-on-year. Along this trend, Huawei's increase in B-end business is indeed reasonable.
Huawei Lenovo will eventually have a war
However, by 2022, the terminal market entered by Huawei is not as blue as the smartphone industry entered in 2011, because before Huawei, there have long been related companies working in the terminal market and achieving eye-catching results.
A typical example of this is association. Taking the PC market as an example, Canalys data shows that in Q4 2021, Lenovo's PC shipments were 6.9 million units, an increase of 8% year-on-year, and the market share was 41.8%, ranking first in the Chinese market.
This is largely due to lenovo's great right to speak in government and enterprise procurement. Official data show that the market share of Lenovo brand PC products in the field of domestic government and enterprise procurement has reached 60% in 2017 and risen to 70% in 2018.
In addition, thanks to the maturity of IT infrastructure such as cloud computing and 5G, Lenovo's ISG infrastructure solution business has also ushered in a big step forward in development. According to the financial report, in 2021, lenovo ISG infrastructure solution business revenue was 12.3 billion yuan, an increase of 19% year-on-year.
According to Lenovo, the company's ISG server business has covered many large and medium-sized enterprises in the global cloud computing and artificial intelligence industry, and is gradually penetrating into the small and medium-sized enterprise market.
It can be said that through years of operation, Lenovo has become a player with hard power that cannot be underestimated in the B-end market of smart terminals. Of course, although there is such an "industry predecessor" as Lenovo in front, as a technology company that is good at fighting hard battles, Huawei is not a vegetarian.
First of all, thanks to the "1+8+N" strategy previously built in the consumer market, Huawei's products also have the advantage of "big ecosystem" in the B-end market of smart terminals. For example, at the press conference, Huawei said that for government and enterprise customers, Huawei's advantage is to rely on the standard customization capabilities and open customization capabilities brought by HarmonyOS to meet the multi-dimensional management needs of organizations or enterprises for terminal equipment.
Second, after years of dealing with operators and enterprise-level customers, Huawei can also accurately understand and meet the technical needs of B-side customers for security. For example, the MateBook B series displayed at the conference is mainly "security", equipped with an independent TPM2.0 security chip.
However, due to the impact of the epidemic and the retreat of related market dividends, Huawei's decentralization of cutting-edge technology in the terminal field may be difficult to reproduce the miracle created in the smartphone market that year.
Because the core intelligent terminal market has entered the era of stock growth. Forecast data released by IDC shows that in 2022, shipments in China's commercial PC market will show a downward trend. This is also borne out by data from the National Bureau of Statistics, which in March 2022 saw a PMI (Purchasing Managers' Index) of 49.5%, down 0.7% month-on-month.
In addition, in the face of Huawei's attack, Lenovo is not willing to show weakness. At the 2022/23 fiscal year oath ceremony held by Lenovo China in April 2022, Liu Jun, executive vice president of Lenovo Group and president of Lenovo China, said that Lenovo will continue to implement the strategy of "total R&D investment of more than 100 billion yuan in the next five years" in the future, and put forward a new goal of impacting the NO1 in the IT service field and the proportion of 3S business revenue in the new fiscal year to exceed 30% in the next 3-4 years.
The pulse of the times
Although Huawei's transformation has the meaning of being forced to be helpless, from the perspective of the entire industry, the decline of the C-end consumer electronics market is an indisputable fact.
Taking smartphones as an example, data released by Canalys shows that global smartphone shipments fell by 11% due to the economic downturn. In fact, since 2017, shipments have fallen, almost becoming the main theme of the smartphone industry.
Under this market trend, even the head of the smartphone manufacturers continue to be under pressure in terms of performance. Taking Xiaomi as an example, the financial report shows that in Q4 2021, its smartphone shipments were 44.1 million units, an increase of only 4.4% year-on-year. Coupled with the slow process of high-end, Xiaomi's operating profit in the quarter was only 4.415 billion, down 54% year-on-year.
In fact, Xiaomi has long seen the trend of smartphone decline, so in March 2021, it officially announced the construction of cars and started the second curve. However, because the supply chain involved in smart cars is wider, until a year later, we have not seen Xiaomi show smart car-related products.
Although from a logical point of view, Huawei and Xiaomi are similar, are actively creating a second curve, but because there are fewer industrial chains across, Huawei's "terminal business" is actually more practical than Xiaomi's.
As mentioned earlier, the core intelligent terminal market has entered the era of stock growth, but with the development of the digital economy, the process of transformation of traditional industries may spawn new dividends at the peripheral terminal level.
In the "14th Five-Year Plan", the top level clearly stated: "It is necessary to create new advantages in the digital economy, promote the integration of economy and technology with the real economy, and empower the transformation and upgrading of traditional industries." ”
Taking wearables as an example, data released by Frost & Sullivan shows that in 2014, global shipments of wearable devices were only 0.29 billion. In 2021, that number will reach 534 million units. This figure is expected to climb to 637 million units in 2023.
Similar to C-end consumers focusing on health, on the B-side, wearable devices can also keep employees safe. Taking Huawei WATCH B7 as an example, its support miner life monitoring and health management functions can carry out real-time life monitoring of miners underground. According to Huawei, when watch B7 detects an abnormal heart rate of miners, it will immediately issue a warning to facilitate the timely rescue of miners.
From this perspective, Huawei's previous user data and product function innovation on the C-side actually have certain advantages over Lenovo.
From this, we can find that at present, Huawei and Lenovo have their own advantages in the B-side. As the leader of China's PC industry, Lenovo has a first-mover advantage in terms of market and market share at the core computing hub level. Huawei, as a giant in the field of C-end electronics consumption, also has corresponding brand precipitation in terms of user experience and ecology.
In the future, on the B side, whether it is Huawei's "ecology" to defeat Lenovo's "market", or Lenovo to make up for shortcomings and encircle and suppress Huawei, we still leave the answer to time.