China's network technology on May 6 (reporter Shan Zhengyu) ZTE senior vice president, president of the terminal division Ni Fei recently revealed in an interview with the media that this year ZTE will continue to increase investment in comprehensive communication capabilities and core technologies such as chips, algorithms, operating systems and network architectures, on the basis of last year's 50% proportion, to further increase the proportion of self-developed chips in terminal products.
At the strategic level, Ni Fei said that he will continue to strengthen the "1+2+N" intelligent lifestyle, focus on large terminals, and challenge the target of 150 million terminal products and 50% year-on-year shipments. In terms of mobile phone products, this year's shipments are expected to increase by 50% over previous years, and the domestic market will have a 200% increase.
In the face of the weakness of the overall mobile phone consumption market this year, what is ZTE's plan? The popularity of the folding screen mobile phone continues unabated, does ZTE have any plans to enter the game? In the face of many questions from the outside world, Ni Fei said in an exclusive interview with the media that technological innovation is a necessary condition for manufacturers to seek breakthroughs in the high-end machine market, and this year ZTE will exert its strength in the two directions of screen and image.
The market was weak in the first quarter
Lack of product innovation is key
According to a latest report by data analytics agency Counterpoint in April, China's smartphone sales in the first quarter of 2022 were 74.2 million units, down 14% year-on-year. The transaction volume in this quarter is close to the first quarter of 2020, that is to say, the market has returned to the early stage of the epidemic, and it also shows that the current domestic smartphone market demand has a downward trend.
It is obvious that the lack of obvious innovation in the market to stimulate consumption is the main reason for the oversupply of the market. Talking about the market situation in the first quarter of this year, Ni Fei told China Net Technology that more fierce competition in the stock market is inevitable, ZTE believes that this year's continuous emergence of cross-industry entrants, as well as the proportion of the brand market in turn to sit in the situation, so that there is a lot of uncertainty in the mobile phone industry; domestic brands and technological innovation lead the world, is to let the industry see the importance of technological innovation.
In Ni Fei's view, ZTE has formed a major competitive advantage in the market based on the previous growth momentum of terminal business and technical advantages in the field of communications, as well as the technical precipitation of chips, operating systems, etc., as well as the terminal's own product research and development capabilities. In the future, in the direction of mobile phone products, screens and images will be important innovation areas for ZTE mobile phone products, in addition to continuing to consolidate their advantages and characteristics in under-screen camera and multi-main camera computing photography, they will continue to lead the innovation and product commercialization in these two directions.
Ni Fei, Senior Vice President of ZTE and President of Terminal Division
"For the company's future strategic planning, based on the consumption upgrade of personal and household products, and the two major trends of digital transformation of the industry, ZTE will adopt the strategy of consumer terminal business and industry terminal business at the same time in the future." Ni Fei believes that when 4G to 5G, the lack of product innovation is the main reason for the market decline, although the problem of out-of-stock of the trapped chip supply chain in the first quarter still continues, but the high-end flagship machine market will be more affected, because the high-end flagship cost is higher, and the cost of user replacement will also rise. Therefore, high-end flagships need stronger innovation support.
Ni Fei said: "The industry needs to do its best to invest resources, further open source and reduce expenditure to improve operational efficiency, save costs and expand more channels, more scenarios, bring better experience, better products, in order to pull the industry out of the predicament." ”
The full-screen mobile phone is the ultimate form of the future straight-screen flagship
Flexible folding screen products will be launched in due course
As early as mid-April, the technical details related to the Axon 40 series have been exposed, among which the Axon 40 Ultra will use a new off-screen camera technology, which is ZTE's first curved under-screen camera flagship. Ni Fei said that through innovation to achieve high-end product market breakthrough is the unchangeable truth, can achieve the three standards of perceptible, disseminatable and functional irreversible, we can create a better product experience for consumers, thereby driving consumer demand growth.
"For example, if you use a higher full screen or faster charging technology, as long as you use it, you can't return it if you want to", Ni Fei said bluntly, in recent years, the full screen has always been an important direction for innovation of various manufacturers, in the flagship products of the straight board, only the off-screen camera technology is the best solution for the full screen. The latest flagship machine created by ZTE is positioned as the "ultimate form of the straight-screen flagship mobile phone" a full-screen mobile phone with off-screen camera technology.
In fact, ZTE has always been the leader in off-screen camera technology. In 2020, the ZTE Axon 20 5G was first listed half a year earlier than the industry market, and it is also ZTE's first off-screen camera phone. Since then, Xiaomi has brought the Mix 4 series to the off-screen camera technology like the track, and Samsung has used the folding screen mobile phone Galaxy Z Fold 3 as a model for testing the camera technology under the water. As for vivo, oppo and Huawei, they also have a layout in the under-screen camera technology, or launch a concept machine, or release relevant messages.
According to ZTE, the Axon 40 Ultra is equipped with off-screen camera technology is its third-generation off-screen camera technology, which has significantly improved the yield rate and under-screen display effect compared with the previous generation technology, and can bring 100% flawless full-screen experience. Ni Fei believes that the release of the Axon 40 Ultra indicates the full maturity of the under-screen camera technology, which will surely lead the technology to a broader application scenario, and the ZTE Axon 40 Ultra will be the "ultimate form of the straight board flagship". And as China's mobile phone market continues to weaken, the user replacement cycle is lengthened, and there must be new technologies to stimulate the market. Therefore, the new under-screen camera experience brought by the Axon 40 Ultra is a good attempt in the field of product innovation this year, and it is also a new change to the industry.
It is worth mentioning that for the progress of ZTE in the research and development of folding screen mobile phones, Ni Fei revealed that in 2018 ZTE released a dual-screen folding mobile phone ZTE Axon M, in recent years has also been concerned about the development of the field of flexible folding screens, technical reserves are completely no problem, but for now, folding screen mobile phones still have thickness, creases, software adaptation, weight and other issues to be solved, ZTE will launch folding screen solutions at the right time.
In terms of channels, Ni Fei said that on the basis of more than 6,000 by the end of 2021, it is planned to build more than 10,000 sales positions in 2022. In the future, relying on the industry leader advantages of data connection products, we will accelerate the expansion of the ecological scale of smart tablets, wearables, smart screens, home data control centers and other products.
According to the financial report, in the first quarter of 2022, ZTE's revenue was 27.93 billion yuan, an increase of 6.43% year-on-year; net profit was 2.217 billion yuan, an increase of 1.6% year-on-year; and non-net profit was 1.95 billion yuan, an increase of 117.13% year-on-year. In the first quarter, ZTE's R&D expenses reached 4.7 billion yuan, accounting for 16.8% of operating income. Selling expenses were $2.152 billion, down 0.64% year-on-year. Therefore, from the performance level, ZTE is constantly tilting towards research and development at the expense-side management level.
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