On April 20, at the launch of Huawei's new product launch for commercial office terminals, Huawei announced that the "consumer business" will be renamed "terminal business" and fully enter the commercial field. From merging "terminal business" into consumer business to redefining "consumer business" as "terminal business". Huawei's "terminal" has completed a round of adversity.
Huawei terminals, why is it commercial in the future
Huawei's financial report shows that its consumer business achieved revenue of 243.431 billion yuan in 2021, a sharp drop of 49.6% year-on-year, and the proportion of revenue fell to 38.2% - this decline is not unexpected: because the core of Huawei's consumer business is "mobile phone". The core of Huawei's mobile phone is the "autonomous HiSilicon CPU". In the face of US sanctions, Huawei chips can only be "developed and designed", but cannot be manufactured; now the products are "consuming inventory". Not to mention that the latest technological innovations on the terminal cannot keep up, and the inventory also has a bottoming out. The pain of the chip not only affects the mobile phone, but also has a considerable impact on Huawei's other independent chip product lines: TV, smart boxes, smart speakers, etc.
However, in Huawei's terminal product line, there are also products that "do not use Huawei CPUs": for example, commercial notebooks, desktops and monitors... These products have achieved substantial growth in the context of the sharp decline in Huawei's consumer terminal business from 2020 to 2021. At the same time, Huawei terminals also have some "advanced chip process insensitive" products: such as products and solutions that are mainly for engineering commercial use. In this regard, the "business" that can meet the market demand with 28nm process chips is also becoming a new growth point for "Huawei terminals".
"Stuck in the neck and unable to do it, of course, will fall sharply - but Huawei has also proved its strength: why do it work!" In the more 'terminal' fields, engineering and commercial information equipment markets that were not deeply involved or were not involved in before, it has achieved great success! Industry insiders pointed out that this shows that Huawei's "terminal transformation" has a foundation.
The reason why Huawei will focus on "commercial" business in the future for a period of time is because "the commercial market is equally huge" and in the context of the development of the smart society in the 5G era, it has good incremental potential in synergy with Huawei's 5G technology advantages; on the other hand, the well-known "chip processing" problem - commercial and engineering external chips, or the use of non-advanced technology, can also solve the capacity problem.
However, a variety of information also shows that Huawei is not abandoning the consumer-facing business, but is doing the addition of the "new commercial scenario": in the short term, because of chip restrictions, Huawei's consumer business will inevitably shrink, but Huawei's terminal line needs to survive, which requires the support of the commercial market; in the long run, Huawei has not given up the development of independent technologies, including from chips to OS, ecological progress, are continuing to invest in research and development resources - once the chip foundry problem is solved, Huawei's consumer business will inevitably "come again." ”。
From the perspective of the ecological volume of the "application side", Huawei's increase in the expansion of commercial product lines is also conducive to Huawei's more technical achievements entering the market to the greatest extent, rather than being closed in the laboratory: this is a good thing for continuous R&D investment. Moreover, promoting Huawei's ecological power, including OS, to a broader commercial field and smart social scenario also requires Huawei to "strengthen commercial use" itself.
Huawei's entry may change the "logic of industry competition"
For the "new ideas" of the future terminal business, Yu Chengdong, CEO of Huawei's terminal business, said that targeted layout and market attack will be carried out in product categories such as commercial notebooks, desktops and monitors, tablets, smart screens, and wearables, as well as government and education, medical care, manufacturing, transportation, finance, energy and other industry markets. This is obviously a major challenge for the existing market pattern of the above product lines and industry scenarios!
For example, from the perspective of IT products, neither the PC, NB nor display markets are "likely to generate significant increments" in the field. This aspect is a typical stock competition, that is, if Huawei has more bites, there will be less people. Compared with traditional IT brands, Huawei not only has the advantage of local brands, but also has the advantage of customer "empathy" in the current special environment, and even has a huge advantage in ecological technology and application: the data shows that in 2021, HUAWEI CLOUD will achieve more than 30% growth compared with the same period last year, and HUAWEI CLOUD is already the second largest enterprise in China in the IaaS market and the fifth in the world. ——This is undoubtedly an important "ecological" chain advantage for the government and enterprise office markets, especially the systematic solutions in the 5G +AI era.
For example, according to the "Global IFPD Market Research Report 2021 Q4 DISCIEN" data, in the field of conference interactive large screens, Huawei's market share has risen sharply in 2021, and the Chinese market has jumped to the first place in shipments. The conference interactive tablet product category to which Huawei's IdeaHub product belongs is a new "commercial species" that has generated explosive growth in remote office demand under the epidemic situation in 2020-2021. Huawei's conference tablet large screen, relying on Huawei's "cloud conferencing" service, also constitutes a "soft and hard" ecological integration pattern.
As can be seen from the above cases, a major feature of Huawei's commercial product line is the advantages of software and application service ecosystems. That is, traditional commercial product providers, including display screens provided by color TV companies, computers provided by IT companies, printers provided by office home appliance companies, etc., are all "equipment is king", but they are not competitive enough in "back-end application solutions" and need to be combined with third parties to provide "complete intelligent commercial solutions" based on the "cloud and ecosystem" system. However, Huawei is "starting from enterprise communications, cloud, and application ecology" and gradually entering the "terminal hardware market", with a "horizontal and highly comprehensive competition system".
That is to say, Huawei's commercial "advantages", in addition to brand, "empathy", etc., have the special value of "integrated solutions" - not only to see the "audio-visual experience" advantage of the Huawei brand day Huawei B5 smart screen conference room version, but also to understand that behind this product is the full support of "Huawei's smart ecosystem". This kind of competition has great potential challenges for it, it is the traditional single product hardware force-based IT, business display, engineering AV enterprises.
The value of "cloud + terminal" is the true "face" of Huawei's "commercial terminal". This will obviously open up a new "competitive logic" in the era of smart society and the commercial terminal market: Huawei's new terminal strategy is not only a defense under the "lack of core", but also a dimensionality reduction blow to the commercial terminal market.
Huawei Commercial, with the industry market as the center of the "position" division
In terms of Huawei's commercial terminal strategy, Huawei has placed special emphasis on vertical solutions for "different industry markets": in October 2021, Huawei formed five legions and held a huge oath-taking conference; on March 30 this year, Huawei held the second batch of 10 legions formation and inaugural meeting.
Huawei's 15 legions include the first batch: coal mine corps, smart road corps, customs and port corps, smart photovoltaic corps, and data center energy corps; the second batch: power digital corps, government affairs one netcom corps, airport and rail corps, interactive media corps, sports health corps, display new nuclear corps, park corps, wide area network corps, data center base corps and digital site corps. ——These legionnaire combat teams have a clear goal of "market service scenarios and solution products", which can be described as "highly targeted".
At the same time, behind each legion is the comprehensive support of Huawei's communications, computing, display, cloud services, R&D and innovation capabilities, etc., which is a typical vertical industry, large-depth, and synthetic operation. This kind of competition scheme, for many "vertical industries", the traditional "small and medium-sized enterprises with specialized division of labor" has a strong "siphoning and exclusion" benefit: that is, it is either integrated into Huawei's ecological solutions, or it is overwhelmed on the beach by the huge waves set off by Huawei.
"By completing the division of Huawei's terminal and system services by means of industrial legions, product portfolio corps, and industry corps, and relying on a highly verticalized and highly forward-pressure competition method with the strongest combat effectiveness, Huawei is bringing pressure to 'change' many industries." ——In this regard, it is no longer Huawei's commercial terminals, or all Huawei's terminal products participating in market competition, but Huawei's overall "essence power" injected into a single application scenario through the legion position. This way of competition is not only in line with the direction of the future smart society, but also a subversion of the traditional "small and fine" professional field competition model: the future vertical industry market will increasingly have the characteristics of "big and strong".
In summary, the transformation of Huawei's "terminal" business is supported by complex background factors, competitive factors, and new market demand trends. Squeezing into such a predator as Huawei in the commercial terminal is obviously not what every "small and fine" enterprise is willing to see, but the change has occurred, and how to deal with it is the "only" important thing: whether it is IT, special display, business display, private network, enterprise cloud or other industries, it is necessary to face the addition of the new king of "Huawei".