The hot-selling mobile phone case cannot hide the sluggishness of the mobile phone market

Image source @ Visual China

Wen | LeiTech, source | Lei Technology Digital 3C Group, editor| TSknight

Do mobile phone manufacturers make money? Make money, otherwise it will not be able to support giant enterprises such as Xiaomi, OPPO, Apple, and Samsung, and the profits of each company are in tens of billions. However, if you say that the highest profit margins in the mobile phone industry, it is not these mobile phone manufacturers who stand at the top of the industry, but a humble mobile phone shell manufacturer.

"Selling mobile phones is not as good as selling mobile phone cases to make money", it is not Xiao Lei who said this sentence, but the founder of Hammer Mobile Phone, Lao Luo, as a lao Luo who has been in the mobile phone industry for several years and is familiar with the mobile phone market, it is not unreasonable to say this sentence.

At the end of 2021, Hammer Technology, which is about to usher in the tenth anniversary, announced that it would abandon the mobile phone business, in fact, at the end of 2020, the hammer mobile phone has already existed in name only, the main team was sold to ByteDance, and the core figure Lao Luo has left Hammer Technology as early as the end of 2019, and entered the live broadcast market the following year, quickly becoming a new star in the live streaming cargo industry.

The main reason for Lao Luo's live broadcast is to repay the personal debts owed in the process of founding Hammer Technology, so that some netizens ridiculed that if Lao Luo chose to enter the mobile phone peripheral industry, mainly attacking mobile phone shells, software development and other peripheral industries, with the design and development level of hammers, perhaps the current market value can buy today's hammer technology several times.

This is not unreasonable, as early as 2020, the leading enterprise of domestic mobile phone cases, Gemmet, successfully landed on A shares, becoming The first share of China's "mobile phone cases", as of the time of Xiao Lei's writing, the market value of Gemmet was 2.1 billion yuan. The highest valuation of Hammer Technology was only 2.6 billion yuan, which was already negative assets in 2020, and the founder Lao Luo owed 600 million yuan in debt.

01 How profitable is the mobile phone case?

A small mobile phone case, although inconspicuous but gradually become a lot of people's life "necessities", in Taobao search for "mobile phone case" keywords, jump out of the sales of goods sold more than 10,000 abound, and in addition to rice noodle oil paper and other necessities of life, in other commodity categories it is difficult to find sales can be comparable to the goods.

According to relevant data, 75% of smartphone users are using mobile phone cases, and the annual smartphone shipments are more than 1 billion, calculated by 1.4 billion smartphone shipments in 2021, the market stock of mobile phone shells is as high as 1 billion. Moreover, more than 10 million users will buy 12 or more phone cases, most of which are female users and have a high user stickiness.

Behind the huge sales volume is the low cost of the mobile phone case itself, in addition to the design cost, the material cost of the mobile phone case itself is actually very low. Taking the best-selling transparent anti-drop mobile phone case as an example, the price on Taobao ranges from a dozen to dozens, while the appearance, function, and material are similar, even if it is said to be unchanged yellow, more durable reinforcement material, the actual cost will not be much higher than the ordinary style.

You may wish to open Alibaba, search for "iPhone phone case", you can see that to the iPhone phone case as an example, most of the silicone mobile phone cases, transparent mobile phone wholesale prices are between six or seven to a dozen pieces, including some of the characteristic mobile phone cases, the actual price is far lower than the price sold on Taobao.

Moreover, if you are a merchant, you can also contact the manufacturer directly through Alibaba to produce customized models with brand logos, or use better materials to sell at a better price when selling, and the actual cost is not much higher.

Whether online or offline, these mobile phone cases on Alibaba are the main sales force, each mobile phone case can bring nearly 200% of the revenue, and the profit behind it can be imagined. On top of these "mass-produced" mobile phone cases, there are custom mobile phone cases and mobile phone cases with independent design and patents, of which a major source of custom mobile phone cases is actually a wholesale channel such as Alibaba.

At present, the common custom mobile phone case often takes the way of "drawing customization", the user submits a picture that meets the requirements, and then the manufacturer prints the picture to the back of the mobile phone case. From the material point of view and the price of more than a dozen pieces of mobile phone case is basically the same, just one more printing process can sell double the price, the merchant can choose to purchase their own printing equipment, you can also choose to cooperate directly with the relevant mobile phone case manufacturers.

After the self-purchased equipment earns back the cost of the equipment, the subsequent dye cost is basically negligible, and the cooperation with the manufacturer is almost costless to earn the intermediary fee, although it is not much, but there is no cost risk.

As for the more high-end mobile phone shell category, it is the world of independent brand manufacturers such as Gemmet, and the price of a single product often exceeds 3 digits. Take the design, protection function-based route, such as Gemmet's iPhone phone case product line is not lack of high degree of protection of the phone case, although the price is not low, but compared to the iPhone damage after the repair price is still very cost-effective.

Therefore, these high-priced mobile phone cases are always not lacking in buyers' attention, but with the changes in the market, now more popular is the trend, fashion design as the main selling point of various mobile phone cases, that is, we often see the style on the Platform such as Xiaohongshu and Douyin.

These mobile phone cases are quite popular with major female users, and to a certain extent, they have become the "third accessory" for women, and according to different outfits, seasons and moods, female users will choose different mobile phone cases to match. Moreover, not only female users, but also male users are buying phone cases.

Taking Xiao Lei himself as an example, he bought three phone cases for the iPhone 13mini, and if it were not for the fewer phone cases that the model adapted to, he might buy more. One of the mobile phone cases is to change the feel of the purchase, the other part is simply like its design, and spending dozens of pieces to change a mobile phone case can also give themselves an illusion of "changing the phone", and the cost gap between the two is obvious.

03 Behind the hot sales of mobile phone cases is the crisis of the mobile phone industry

Mobile phone cases are selling well, but mobile phone manufacturers are difficult to be happy, because the domestic mobile phone market has declined shipments for several consecutive quarters, and even "why young people are reluctant to change mobile phones" has once become a hot search on Weibo. Taking the January-February sales volume of Q1 this year as an example, the shipments of the domestic mobile phone market fell by 22.6% year-on-year, almost a quarter of the shipments.

Moreover, according to the data released by counterpoint Research, China's mobile phone user average replacement cycle has also been extended from 18 months to 28 months, and young people have spent more on other consumer goods, and changing mobile phones is no longer the need of most young people.

Young people who are no longer keen to change mobile phones have begun to change their mobile phone cases to maintain their own freshness, so behind the hot sales of mobile phone cases, it is actually a crisis that mobile phone manufacturers have to face. How to re-attract young people to pay attention to new mobile phones has become a headache for many manufacturers, it can be seen that in recent years, more and more manufacturers in the mobile phone market have begun to use traffic stars to endorse mobile phones, and more co-branded customized models have emerged, hoping to attract the attention of young people through IP and stars.

The decline in mobile phone sales is partly due to the popularity of other hobbies such as camping, which has allowed young people's limited funds to be transferred to other consumer markets, and partly because the mobile phone industry has been standing still in the past two years. Although the new generation of mobile phones has made great progress in terms of processor performance and imaging technology, for most users, the mobile phones released in 2019 can still meet daily needs.

In terms of performance, even the original god with the highest performance requirements can actually run smoothly on most mobile phones in 2019, and games such as King glory with a larger number of players have little requirements for mobile phone configuration. So much so that some insiders laughed that the mobile phone industry may now urgently need a new explosive mobile game with high requirements for equipment performance, because it can drive a considerable number of mobile phone users to change the demand.

The performance improvement of the screen and image is not strong for the low-end mobile phone users who account for the main share, and the daily use experience of 2K and 1080P is not much different in addition to the lower battery life of the 2K screen. The improvement of image performance is also a false proposition for most users, except for a small number of night scene shooting experience gaps, in most cases the gap is very small, not enough to become the power of users to change the machine.

This situation is not only in the average user, even digital product enthusiasts who are keen to change mobile phones, the purchase momentum in the past two years has declined significantly. On the one hand, the increase in the price of mobile phones has increased the cost of replacement, on the other hand, the improvement brought about by the replacement is very limited, so that most digital product enthusiasts choose to watch from the sidelines and wait for more worthwhile products to appear.

Although Xiao Lei often complains that "technology is based on changing shells", he still hopes to see something new, whether it is folding screen or under-screen camera technology, if there are more good products on the market in the next time of 2022, at least it can restore a little confidence in the mobile phone industry.