Text / Five Lines
Producer / Node Finance
When it comes to domestic mobile phones, OPPO always can't get around the existence, and its marketing records and offline channel capabilities are impressive. After the mobile phone industry gradually "rolled in", OPPO began to consciously take the initiative to open up the association with the "factory sister machine" and "advertising", replaced by "high-end" and "technology flow". With the release of the OPPO Find X5 series in February this year, these two "qualities" were once again revealed.
After transforming the mobile phone industry and transitioning from the era of functional machines to the era of smart machines, OPPO opened its third self-revolution. "High-end" and "technology flow" are only part of OPPO's third revolution, the "bright line" in it, and its other movement is equally important.
In March this year, the head brand of intelligent projector "Huole Technology (Nut Projection JMGO)" completed a Pre-IPO financing of 1 billion yuan, and OPPO, as an industrial investor, ranked among the investors together with the old shareholder IDG. There are two details worth playing with.
Counting along the oppo's case, the investment activities of this mobile phone manufacturer have continued intermittently for nearly a decade, during which they have also experienced a change in investment direction. Guided by OPPO's strategy of seeking upward breakthroughs today, CVC has become a window that cannot be ignored when observing OPPO.
/ 01 /
OPPO investment has changed
In March 2021, the intelligent projector industry gave birth to the first listed company "Jimi Technology". According to the data, Jimi Technology is the leader of China's intelligent projector industry, and won the first place in the Chinese projector market with 757,000 units of shipments in 2020. Huole Technology's brand "Nut Projection JMGO" is closely behind, with a market share of about 14.4%.
Although the investment target is the head of the industry, if you think that the purpose of OPPO's investment is only to make money, it is a bit naïve. Good targets will naturally bring great returns, but this is only a by-product of oppo's investment, and its primary goal of investment is to add bricks and tiles to the main business.
CVC is different from VC in the general sense, and these two differences also reflect the different pursuits of the two.
Traditional VCs consist of limited partners and general partners. LPs are usually pension funds, university funds, listed companies, etc., with LPs responsible for funding and GP responsible for operation and management. The LP of CVC is the enterprise itself, and the management team is responsible for the enterprise.
This extends to the second difference. The first goal of traditional VCs is to make money for LPs, while CVC's primary consideration is to serve the main business of the parent company, and investment activities generally revolve around the main business of the parent company. This is reflected in oppo's investment in nut projection, which helps OPPO expand its mobile phone-based IOT ecosystem.
Reviewing OPPO's recent shot case, we found that OPPO's investment style has changed substantially in 2020.
Before 2020, OPPO's investment has no rules to speak of, and it can even be said to be "disorderly".
For example, OPPO has shot the media field three times. In 2014, he invested in Wang Ziru's ZEALER, in 2016 he invested in a little information, and in 2018, he participated in the financing of popxo, an online digital publication for women in India. As a large mobile phone manufacturer, the only thing that can be associated with them is "pre-installed", but the follow-up development of a little information shows that this investment is not very successful.
Starting from 2020, under the joint impetus of "lack of core" and the need for hard technology support for mobile phone products to enter the high-end market, the hard technology field represented by semiconductors has become the darling of OPPO's foreign investment.
According to Tianyan, OPPO has made a total of 24 shots so far in 2021, of which 70% have been invested in the field of "hard technology". In March 2021 alone, OPPO participated in the Series C financing of MediaTek's subsidiary "Weijie Chuangxin", which is a supplier of RF and high-end analog chips, and also participated in the Series C financing of Weizhao Semiconductor.
At the end of 2019 earlier, OPPO President Chen Mingyong called building a technology moat at the 7th OPPO Future Technology Conference, and the Group will invest 50 billion yuan in science and technology research and development in the next three years, focusing on 5G/6G, artificial intelligence, AR, big data and other fields.
From "disorderly" to focus on cutting-edge technology, OPPO has gone through a period of exploration from 0 to 1, which not only serves the development needs of the parent company, but also reflects the mobile phone manufacturer's new thinking about the future of the technology industry.
/ 02 /
New thinking of mobile phone manufacturers
After Cook took over as Joe's helper, there was a paradox in Apple: we complained about Apple's lack of innovation, while paying for the iPhone 13, and lamented "true fragrance".
Is Apple really "out of the blue"? From different perspectives, different answers will be obtained.
Compared with ourselves, Apple has indeed brought us fewer and fewer surprises in recent years, and how long have we not said "Oh, my god!" at apple press conferences! "Got it? In the Cook era, Apple's achievements in commercialization were greater than those in technology. Even so, Apple still has an unsurpassable advantage over other peers.
Apple's advantages have different feelings in the eyes of different people, and in the eyes of peers, its advantages can be summarized as one point, that is, the mastery of the underlying technology, self-developed SoC and self-developed OS constitute a perfect closed loop. This allows Apple to achieve "no one has me" in the core experience, while other mobile phone manufacturers can only "people have me excellent".
The iPhone 13 series released last year, although it was also complained about by some users about the lack of innovation, but it still helped Apple to become the first place in the Chinese smartphone market again with a market share of 22% after nearly six years. (Counterpoint data, as of October 2021)
On the other hand, mobile phone manufacturers outside Apple will emphasize the advantages of differentiation every time they go to a new product launch, which is also impossible in the case of a high degree of convergence in the supply chain. For example, OPPO's traditional advantage is imaging, but this is also the focus of other large manufacturers, and the core components of imaging come from the supply chain, which makes the difference between brands not large.
The changes in the direction of investment and expense investment of mobile phone manufacturers have explained to us their countermeasures, which reflects their thinking on the future of the industry.
In February this year, OPPO released the OPPO Find X5 series, which uses the self-developed NPU chip "Mariana X". With the support of the proprietary DSA architecture and 6nm process, it has better AI performance and energy consumption ratio than general-purpose chips.
Image source: OPPO official website
In connection with OPPO's 50 billion research and development plan mentioned in 2019, and the investment direction has shifted to hard technology fields such as semiconductors, this shows that OPPO's goal at this stage and for a period of time in the future will be to make up for the shortcomings of the underlying technology, and self-research + investment is a landing strategy.
This is not OPPO's "family word", Xiaomi, which has been "building cores" for a longer time, is also doing the same thing.
In March last year, Xiaomi's folding screen product MIX FOLD applied the self-developed image signal processing chip "Surging C1"; the Xiaomi Mi 12Pro released in December of the same year applied the self-developed fast-charging chip Surging P1, which is the industry's first resonant charging chip, and the fastest 18 minutes in the fast mode can be fully charged with a 4600mAh battery. Xiaomi (Xiaomi Yangtze River Industry Fund) has also invested in Shanghai Nanxin and Weijie Chuangxin together with OPPO.
From this, we can draw a conclusion that the investment logic of mobile phone manufacturers, including OPPO, has changed.
Previously, their investment logic was highly similar to xiaomi, the earliest CVC in the industry, and it was product-oriented. Under the requirements of lack of core and entry into the high-end market, the investment orientation has become hard technology.
/ 03 /
OPPO's anxiety
In addition to following the group's strategy, OPPO's investment department has also invested in several "non-hard technology companies" after 2020. Such as programming cats, ten thousand sounds of music, etc., covering education, entertainment and other fields.
Although there is a deviation from the above-mentioned hard technology investment focus areas, the logic of these several shots has not changed, and it is still adding bricks and tiles to the development of the group.
For example, investing in power battery company Ganfeng lithium battery is obviously paving the way for OPPO to build cars. Although OPPO has always been silent about car manufacturing, in the recruitment information opened by OPPO's official website, there have been a number of intelligent driving and vehicle manufacturing related job requirements.
Image source: OPPO official website
Contributing to the Group is not just something that the investment department has to do, other oppo departments are doing the same. The goal of the two is actually the same, that is, to alleviate OPPO's development anxiety.
On the one hand, OPPO's market share in China's mobile phone market has declined by 5 percentage points in the past year (the fourth quarter of 2020 - the fourth quarter of 2021), which is one of the only two major manufacturers in the top five, and the other is VIVO, which is very similar to OPPO.
However, if the time is extended, OPPO's market share is relatively stable.
On the other hand, other businesses other than mobile phones are not progressing well, especially the IOT business.
OPPO did IOT about 5 years later than Xiaomi, and it was not until 2018 that it was mentioned at the level of group strategy. However, the late entry time is not a problem of this business, the problem is that for the current stage of IOT is in the popularization period, it is more necessary to rely on explosive products to drive shipments, and OPPO can not come up with a explosive product, resulting in the development of this business is not smooth.
At present, the development is relatively mature, and the popularity is also high. According to the data of Zhongyikang Home Appliances, from January to March 2021, Xiaomi ranked First in the online color TV market with a share of 21.8%, and OPPO only ranked 39th.
Another area with greater potential is wearables. According to IDC data, as of the fourth quarter of 2020, OPPO ranked fourth in the wearable device market with a share of 4.6%, a gap of 17.7 percentage points with the first place Huawei. Reflected in the shipment volume, Huawei is about 5 times that of OPPO.
Last year, OPPO's IOT division reported layoffs due to continued losses. According to 36Kr, last year's loss alone was as high as hundreds of millions of yuan.
If the mobile phone business has a high degree of attention and full horsepower, it is the "bright line" to promote the development of OPPO, then investment is the "dark line" to promote the development of OPPO. These two lines can theoretically help OPPO to a new level of development, but each has its own constraints.
The "bright line" is a clichéd problem, and the fierce competition in the industry superimposes its own advantages, resulting in pressure on the business.
Although the investment dark line with buff is getting more and more compatible with the development of the group, its driving role cannot be played in the short term, and hard technology generally has the characteristics of long cycle. And everyone is investing in related fields, and there is a tendency to fall into the high homogenization of the supply chain again.
Judging from the precedents of Apple and even Huawei, OPPO has been on the right path, but it is also racing with Xiaomi, VIVO, Glory and other big manufacturers. These two lines must not only make OPPO better than yesterday's self, but also better than its peers, in order to sit back and relax.
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