Image source @ Visual China
Wen 丨 Wang Xinxi
The folding screen mobile phone market has become lively again due to the release of Huawei's new product - MateXs 2, and a group of industry insiders have shouted that Huawei is about to change the folding screen market pattern.
Some insiders said that they were surprised! The starting price of MateXs 2 (9999 yuan) refreshed the record of the Mate series folding screen, and for the first time, the price was lowered to less than 10,000 yuan, especially compared with the pricing of nearly 18,000 yuan of the previous generation of horizontal folding screens, and the purchase threshold was greatly reduced.
This kind of exclamation is a bit similar to the shock brought by Apple's change from the iPhone 12 series in the past and not to increase prices.
But despite this, in this year's market environment, this price is still an ultra-high-end positioning in the overall smartphone market.
Due to the lack of chips due to sanctions, Huawei has not been easy in the past two years, its market share has been shrinking, from domestic to overseas, its overall ranking has been outside the top five, but Huawei's strategic adherence to the high-end market has not changed. With the contraction of its straight-panel smartphone market, Huawei has placed the heavy responsibility of maintaining its high-end market position on the folding screen mobile phone market.
Within three years, Huawei has launched five folding screen flagships, the Mate X, Mate Xs, Mate X2, P50 Pocket, and this year's Mate Xs 2. Due to the occupation of the market mind by the earlier entry, Samsung Huawei's two major manufacturers almost monopolized the market share of the folding screen.
According to the "Smart Phone Market Tracking Report for the Fourth Quarter of 2021" released by Omdia, the two folding screens with the best sales are Samsung folding screens, and Huawei ranks second in the sales of folding screen mobile phones, with cumulative sales of about one million.
From the current point of view, Xiaomi OV glory Huawei six mainstream manufacturers have released folding screen mobile phones, from this year's price point of view, although the price of Huawei folding screen mobile phones to explore the signs of the emergence, but the overall is still taking the high-end market route, but Huawei this year is facing the market competition situation is not optimistic.
From the perspective of product performance, its selling point is the innovation of screen and folding technology. For example, Huawei is the only mobile phone manufacturer to launch a folding version of the folding screen mobile phone so far, and this time it has also made efforts in screen hinge technology, creating a double rotor wing hinge for the first time, and the screen after unfolding is smooth and smooth, visually almost traceless experience.
However, compared with the industry, in the hinge technology, OPPO, glory and other manufacturers of new products have a good performance, OPPO Find N brings the water drop hinge design, by increasing the bend radius to reduce the crease of the screen, glory Magic V is ultra-thin suspended water droplet hinge design, in a narrower opening and closing space to create a better screen flatness, but also reduce the problem of creases.
At present, mainstream players are claiming the performance of products with almost no creases, and objectively speaking, at the technical level of hinged screens, Huawei is roughly at the same level as other players.
In addition, from other configurations, whether it is a battery or a camera, Huawei's performance can be said to be decent. 50MP primary color lens, 13MP ultra-wide-angle lens and 8MP 3x optical zoom lens are all conventional. In terms of battery configuration, whether it is a 4880mAh battery or a 66W super fast charge, MateXs 2 also belongs to the mainstream level of the industry.
To put it simply, Huawei MateXs 2 is committed to solving the pain points: thick, afraid of falling, creases, Honor OPPO and other manufacturers have been a step ahead, including Honor Magic V and vivo X Fold, OPPO Find N are gradually resolving portability, hinge design, crease and other issues and shortcomings.
In terms of anti-fall, Honor Zhao Ming once personally demonstrated the magicV at the press conference, which once triggered a hot discussion, and these manufacturers are promoting the transition of products to the direction of portability and practicality.
To some extent, Huawei MateXs 2 has not opened a substantial gap with honor OV in the solution of product strength and pain points. In particular, Huawei MateXs 2 compared to honor OV, there are still obvious shortcomings, that is, the lack of 5G chips, Huawei MateXs 2 uses Qualcomm Snapdragon 888 chips, but only 4G functions.
If the price of a mobile phone is mainly supported by product innovation and performance performance, chip performance is an important part of supporting the price.
For Huawei, in the case that major players have been equipped with 5G chips as standard, especially the current OPPO Find N has pulled the starting price to 7699 yuan, can Huawei still maintain its high price positioning with 4G?
However, in Huawei's view, the price exceeded is due to its brand premium. Among domestic mobile phone manufacturers, Huawei is the only manufacturer that has stood in the high-end market position in the past, and in Huawei's peak in 2019 and 2020, Huawei's domestic market share exceeded 40%, and it also posed a threat to Apple's market position in the peak period of the second half of 2019.
Due to well-known reasons, Huawei's self-developed Kirin chips and some core components cannot be produced, which leads to the continuous loss of Huawei's market share, especially the high-end market position is encroached upon by Apple. According to market research agency Omdia, Huawei's mobile phone sales in 2021 were 35 million units, down 81.6% year-on-year, ranking ninth among global smartphone manufacturers and a market share of 3%. Compared with the peak period of 240 million units of shipments in 2019, it is a world of difference.
Correspondingly, Apple reached its highest market share in the fourth quarter of 2021. But we will find that despite the lack of 5G chips and other core components, Huawei has been sticking to the high-end market. Whether it is the release of folding screen mobile phones or straight flagship mobile phones, its pricing has always been in line with the latest flagship of the iPhone series.
To some extent, this is Huawei's helplessness, it is precisely because the shipment of Huawei mobile phones is limited, its price was once speculated to a sky-high price, called wealth management products by the industry, especially Huawei's folding screen mobile phones have shown a very high retention rate.
Huawei's high-end brand premium in the past has been solid, if the pricing continues to explore, the high-end brand image that is not easy to build will have the risk of collapse, and it may be difficult to stand in the high-end market again in the future.
This is what Huawei has always known in the past, and it is also where Huawei still adheres to the high price even in the absence of 5G chips.
01 Can Huawei's high-end market positioning still be maintained?
But from today's point of view, whether Huawei's persistence in the high-end market can still work may have to be a question mark.
Compared with two years ago, Huawei's chip problem has not been solved for a long time because of the contraction of market share, and brand influence and sales are declining.
In the past, Huawei's folding screen mobile phones can become "wealth management products", stemming from the fact that the folding screen mobile phone market was basically the home of Huawei and Samsung before 2020, but from the second half of last year to this year, OPPO, vivo, and glory three major players entered, and product performance and competitiveness did not fall behind. The folding screen market pattern is changing.
As mentioned earlier, starting from OPPO and Glory, the main consumer mentality of their folding screen new products is to solve the shortcomings and pain points of Samsung Huawei's previous generation of folding screen mobile phones - including obvious creases and poor hinge design. Although Huawei's latest folding screen is also exerting these pain points, at the level of consumer mental occupation, Huawei has been one step behind, whether from technology or product innovation, Huawei does not have obvious differentiated highlights.
Moreover, the product strategy of OPPO, Samsung and other players is to beat down the price of the folding screen and seize the word of mouth and the market. Sainuo previously released a report mentioned that the current dominant price of folding screen mobile phones is still in the price range of 15,000-20,000 yuan, but under the impetus of Samsung Flip Z3 and OPPO Find N, the price of folding screens is expected to drop to less than 7,000 yuan in 2022.
Sainuo also predicted that as the price plummets, the sales of folding screens may rise to 1.8 million units in 2022, and even exceed 12 million units by 2025.
Therefore, there are more and more choices for folding screens, and in the case of close product performance and performance between each other and the price gradually declining, whether Huawei can win the crown of "annual wealth management products" again remains to be seen.
The author once had a thesis that sitting in the high-end market generally needs to have market-recognized brand value in one or more links - from the perspective of Apple Samsung and Huawei's three major factories in the past, Apple relies on the self-development of operating systems + core chips and the integration of software and hardware experience; Samsung is from the chip to the screen, vertical integration self-sufficiency, and controls the key links of the industrial chain; Huawei derives from its core competitiveness at the level of self-developed chips + 5G and the bargaining power of self-developed operating systems + supply chains.
From the perspective of the core competitiveness of the three major factories to support the premium of high-end brands, all three have the card of self-developed Soc chips, from the perspective of differentiation, Huawei mobile phones focus on 5G+ chips; Apple relies on the software and hardware integration moat under the iOS system; Samsung emphasizes the vertical integration supply chain, they rely on their respective irreplaceable core values and leading edges to support its high brand premium.
But from today's point of view, Huawei's high-end brand premium - from the chip to the supply chain level has lost its support point, Huawei mobile phones have actually been difficult to support the past brand premium.
However, Huawei's adherence to the high-end market in the past two years is also Behind Huawei's helplessness and profit appeal, because the mobile phone market share has shrunk, Huawei's profit pressure is very large, in 2021, Huawei's carrier business, consumer business, and enterprise business achieved revenue of 281.5 billion yuan, 234.3 billion yuan, and 102.4 billion yuan, respectively, an increase of -6.98%, -49.6%, and 2.1%. Among them, the consumer business undoubtedly dragged down the overall profit performance.
Huawei's consumer business revenue plummeted from 482.9 billion yuan in 2020 to 243.4 billion yuan in 2021, almost cutting off the waist, and also began to make Huawei think about the future development direction and adjustment of the overall business.
At this time, Huawei's consumer business was renamed terminal business, also because Huawei tried to promote the growth of new services through organizational structure adjustments under the situation of lack of money and difficult mobile phone business turnaround - including Huawei's launch of new commercial product business lines for B-end government and enterprise customers, as well as the re-injection of cloud business and the continuous development of the internet of vehicle business.
Therefore, if the weight of consumer business in Huawei's business system declines, can Huawei's mobile phones adhere to the high-end market and stand? Whether there is still a chance to regain the lost land is actually a place where Huawei needs to reflect.
02 After the supply chain is restored, how should Huawei break the situation?
In the context of chip limitations, from the signals currently revealed by Yu Chengdong, there are also strategies to break the situation, that is, chip stacking.
According to Guo Ping, huawei's former rotating chairman, "Innovative chip packaging, chiplet interconnect technology, and special 3D stacking are ways for companies to make more transistors on a chip to achieve better performance in terms of competitiveness." ”
Simply put, multi-chip interconnect technology, with area, stacking for performance, with a less advanced process, to ensure that future products are also competitive. In addition, Huawei has also laid out in the chip field through Hubble investment, and according to incomplete statistics, 51 chip companies have accepted Hubble's investment.
However, the process of solving the entire semiconductor problem is complex and long, and Huawei needs more time and patience and greater investment in research and development.
At present, the good news for Huawei is that the supply chain link seems to have eased. Not long ago Yu Chengdong said that the supply of Huawei mobile phones has been greatly improved, last year's mobile phone supply is very difficult, this year we Huawei mobile phones began to come back, so everyone wants to buy Huawei products, Huawei mobile phones can be bought.
From Yu Chengdong's words, we can see a clear message - Huawei is improving the supply chain through some means, and the output of Huawei mobile phones is expected to gradually recover.
But this is not the time for optimism. For Huawei, the recovery of the supply chain link is more to solve the problem of product shipment and output, rather than to solve the production problem of its self-developed Kirin Soc chip, which may still rely on external supply chain manufacturers such as Qualcomm. But overall, it's also a positive condition.
After the supply chain is restored, for Huawei, the most important thing is to recover the lost ground and expand its market share.
Huawei has still adhered to its high-end market position under the unfavorable conditions of lack of core in the past, in addition to the adherence to the brand level, there are also considerations for balancing the input-output ratio.
After all, Huawei's revenue declined, but R & D investment did not shrink, in 2021 R & D investment reached 142.7 billion yuan, a record high, accounting for 22.4% of the annual revenue, Huawei's high proportion of R & D investment will inevitably need to be recovered from the product profit level. Therefore, even if the market share has been classified as other, Huawei cannot lower its stature.
But for a mobile phone brand, the contraction of market share means that the influence of a brand declines, if Huawei is still unable to solve the chip problem in the next few years, then Huawei's high-end position in the mobile phone market is difficult to maintain.
As mentioned earlier, the lack of this link of the self-developed SoC Kirin chip is not enough to support Huawei's complete product experience and premium. Whether it is chip stacking or chip investment, it is difficult to replace and surpass the experience and value of Kirin chips + 5G to Huawei's mobile phone products, and it may not be realistic for Huawei to rely on this method to continue to support the high-end market position of mobile phones.
In the context of the continuously lengthening user replacement cycle in the current smartphone market, Huawei also needs to think of a more balanced strategy to recover lost ground.
Based on the present, Huawei should actually make more pragmatic changes. Judging from the current actual situation, Huawei needs to invest more resources to strengthen its brand influence in the high-end market and overseas markets, but at the product level, whether it is from the voice and demand of consumers or from the current situation of the shrinking front of the mobile phone market, the market strategy of small profits and high sales may be more suitable for the current Huawei.
In today's epidemic environment, consumers are more sensitive to price, the lack of core self-developed chips of Huawei's high-end models will have obvious price elasticity, in the past two years, because of the lack of chips and the overall people's expectations for the economy and income, Huawei flagship was once called "wealth management products", but today, the market environment is changing, due to excessive pricing, its stock shipments have caused a blow, but also led to the decline in its overall profits.
The market pattern and consumer habits are changing, and the status of the past does not represent the present. Huawei has always adhered to the strategy of putting profits over sales in the past, but judging from the weakening of its high-end market support and the continuous loss of its market share, it is time for Huawei to make a change.
If the supply chain problem is solved, based on huawei's mobile phone brand influence, even if it takes chips from external suppliers or adopts chip stacking solutions, Huawei still has the opportunity to recover the lost market.
But the premise is that Huawei should perhaps consider the path of taking sales first over profits, lowering its stature, taking the people-friendly route, and taking the recovery of lost land first.
From a realistic point of view, the most favorable price segment for Huawei mobile phones in the future is 2000 ~ 3000 yuan and 4000 ~ 5000 yuan of high-end products, these two price brackets, is Apple's weak coverage of the market, relying on Huawei's brand influence, in this market segment can not only obtain a certain profit, but also through the price of the harvest consumer support, for its future further product premium to bring buffer space.
Waiting for the market share to rise, and then gradually through technological innovation to promote brand influence and the overall market heat began to return to blood, and then gradually floated to the high-end market, may be a path that Huawei can think about at the moment under the predicament.