vivo
2022: Take the initiative to jump out of your comfort zone, and usher in a golden age of high-end breakthroughs
The smartphone industry has entered a "challenging" new year.
After 16 years of rapid development, the innovation of the smartphone industry driven by information technology has entered the "tail cycle", the pace of technology and product innovation has slowed down significantly, and the market competition is particularly fierce. At the same time, a new round of major changes for the era of intelligent connection of all things has begun, and the global and multi-dimensional complex environment has also lengthened this challenging stage, further increasing many uncertainties for enterprises and markets.
From the user's point of view, behind the replacement cycle of more than 36 months is the new expectation of the replacement experience upgrade and the current slowdown in product innovation. Even Apple, as the "leader" of the smartphone industry, has experienced a decline in iPhone 14 series sales and cut orders in the past year, a decline in the proportion of high-end market share, and a "three declines" in market value that once fell below $2 trillion, and the pressure on other mobile phone companies can be seen.
It can be said that the smartphone industry has entered the typical "
Cycle effect", how to successfully cross the cycle has become the core topic and key challenge of major mobile phone companies thinking today.
vivo
Get out of your comfort zone
On January 11, Shen Wei, founder, president and CEO of Vivo, delivered an internal speech entitled "Burying the Seeds and Everlasting Causes" at the company's internal annual meeting, and the information revealed in it impressed the industry: "
2022
Year is the year of Vivo's high-end breakthrough","
The situation in the mobile phone industry will be grim in the next three to five years,"
vivo
Behind the achievements and growth, the future is still full of challenges."
According to public data, domestic shipments fell by more than 21% in the first three quarters of 2022, and the number of new models fell by 13.1% compared with previous years. The global market is also not optimistic, IDC expects global smartphone shipments to decrease by 6.5% year-on-year in 2022, or return to the level of 2014. So much so that some media judged that "the golden age of the mobile phone industry is a thing of the past."
Vivo became an "exception":
IDC data shows that vivo ranked first in shipments in the domestic market in the third quarter of 2022, and it is also the only mobile phone brand with a share of 20% in the domestic market.
In the second quarter of 2022, vivo rushed to the top 2 brands in the domestic high-end market for the first time with a share of 13% (the first place was Apple), more than doubling its share compared with the same period in 2021. According to Counterpoint Research, "vivo has made significant progress in China's mid-to-high-end segments."
Among them, the vivo X80 series, which has been focused on by global market institutions such as IDC and Counterpoint Research, has continued to win the sales champion in the price range of 3500-5000 yuan since the end of April last year, and has successively won the industry's "Best Word-of-Mouth Android Phone in 2022" and "The Flagship with the Highest Value Retention Rate in the Android Camp in 2022". Counterpoint also pointed out that driven by the X80 series products, vivo increased 504% year-over-year in the higher-end segment ($600 to $799). In the third quarter of last year, vivo X series continued to lead in the high-end market of $400-600 (excluding tax benchmark), which highlighted the high-end gold content in China's mobile phone TV, which is known as the "most fierce competition in the world".
The original folding screen mobile phone X Fold allowed vivo to occupy 7.84% of the Android market of 7,000 yuan + for the first time, and entered the top three domestic folding screen market shares (17.6%, October 2022). The data shows that the average sales price of vivo high-end products in the second quarter of 2022 reached 6,170 yuan, refreshing the historical high.
In addition, the number of first sales of the vivo X90 series that went on sale in November last year increased by 2 times compared with the previous generation X80, and the sales of X90 Pro and X90 Pro+ in the higher price segment were 4 times that of X80 Pro in the same period, showing that users fully recognized the "higher configuration" of vivo X series.
The first sale of the newly launched vivo S16 series in January this year won the sales/sales champion of nine major platforms, including the 2-4K price segment of the three major operators, as well as JD.com, Tmall, and Douyin e-commerce. It shows the significant traction effect of vivo's high-end market breakthrough on the mid-end market, and the strong support and positive synergy effect formed by the outbreak of the mid-end market on the high-end market.
Vivo's 2022, you can use "
Market breakout "AND"
High-end qualitative change" two keywords to summarize.
So, why does vivo emphasize that "the future is still full of challenges" at this time and actively choose to "jump out of the comfort zone"?
Actually, this is very understandable, vivo believes"
Long-termism", in a nutshell, means persisting in doing it."
Hard and right things "and those"
Something that takes a long time to invest and accumulate to succeed." Over the past 28 years, Vivo has been driven by this firm philosophy to move out of the positive cycle of "continuous success" to "constantly stepping out of the comfort zone".
This gives vivo a firm understanding of "long-termism" and continuously implements it on technology investment and product innovation. For example, vivo X series has become an absolute minority of Chinese mobile phone brands "ten years of flagships constantly changing". This also exercises vivo's ability to cope with various uncertain difficulties and challenges in the long-term cycle. Shen Wei also said in his speech at the annual meeting: "Judging from the nearly 28 years of vivo history, difficulties and crises are often the best time to turn crises into opportunities.
Each challenge is enhancing Vivo's cognition, consolidating Vivo's capabilities, and allowing Vivo to see further and go longer."
At the same time, from the performance of vivo and various mobile phone companies in 2022, the innovation of the smartphone industry has not reached the ceiling, the mobile phone market has never formed a "solidification pattern" in the past 30 years, and it is still the world's largest trillion track for consumer electronics, and there is still a huge innovation imagination in the next decade with the arrival of the new technology change cycle.
In the past two years, vivo has continued to emphasize its two ideals internally: First, "
Create great products and great brands that people love", the second is "
An evergreen enterprise". It can be said that "stepping out of the comfort zone" is vivo's"
"Seeking Mutation Genes" is also oriented to the challenges of technology and market in the new decade"
Inevitable choice".
Qualitative changes at the three levels of thinking, ability and organization
The technology industry is a typical innovative industry full of fierce competition and continuous exploration and breakthrough, the "law of cycles" continues to be staged, each cycle of the "king" may be in the next cycle "crash", Kodak, Nortel, Nokia and other companies have not only become a classic teaching case of business schools, Nokia former chairman Joma Ollila's sentence "we didn't do anything wrong, but I don't know why we lost" is enough to keep all technology companies alert today.
Crossing the cycle means breaking the law, which is the ideal of "evergreen" of all technology companies, and it is also the biggest cyclical challenge that all TOP technology companies must face.
As a "long-distance runner" in the technology industry for 28 years, vivo knows this well.
Shen Wei also proposed "vivo's response":
In terms of cognition, brand, product and innovation ability, "from quantitative change to qualitative change".
In a nutshell, it can be divided into three levels:
At the ideological level, establish and clarify the unified understanding at the top structure of the enterprise and the bottom layer of operation and management, and firmly support the smooth promotion of the high-end of the vivo brand.
The high-end mobile phone market is now emerging new breakthrough opportunities: on the one hand, users generally go through more than 2-3 rounds of replacement process, the choice of new purchase is more rational, and the significant extension of the replacement cycle also makes many users more inclined to more high-end, better experience of replacement intentions. Market data confirms this statement. The absolute sales of high-end smartphones above 4,000 yuan not only did not decline, but increased slightly, and the relative share continued to grow. According to IDC, a third-party market research institution, in the smartphone market of more than $600, the Chinese market shipped 15.9 million units in the third quarter of 2022, accounting for 22.4% of the share, an increase of 2 percentage points over the same period last year. That is to say, the biggest variable in the Chinese mobile phone market is in the high-end field.
On the other hand, after Huawei's mobile phone business "fell" due to external reasons, Apple also began to show a decline momentum. Following Morgan Stanley's lowering of its iPhone sales forecast for the fourth quarter of 2022, the research report released by TrendForce also lowered Apple's iPhone shipments to 47 million units in the first quarter of 2023, down as much as 22% from the same period last year.
However, these two "explicit trends", all manufacturers have seen, why has vivo made the most significant breakthrough, and regards 2022 as the "year of vivo high-end breakthrough"?
There are two core reasons, vivo has summed up two experiences after reviewing the gains and losses of the past ten years: high-end does not equal high price, high-end machines should come from the user's recognition of the brand; The perception of high-end brands must be listed as the "highest decision of the enterprise" and achieve cognitive consistency throughout the company, including management.
In April 2020, Vivo set up a "high-end breakthrough group" internally, one of the tasks is to deliver and unify the brand strategy inward. "User-oriented" is the origin of vivo's "own culture", and insists on writing "design-driven" into corporate values. A series of " based on "
User-oriented "AND"
The high-end cognition of "determined change" has allowed vivo to sort out "
Product is the cause, brand is the effect, brand is the direction of the product" fundamental logic. This made Vivo's high-end strategy extremely firm, and almost all the actions were realized."
Validity" and "
focus", thus achieving a continuous positive rapid iterative breakthrough ability.
It's like what tech companies have always advocated."
The Captain Effect "AND"
Wave effect": The wind and waves at sea will indiscriminately pounce on every ship, and the captain's sense of crisis and sensitivity is particularly important, Apple's Jobs, Tesla's Musk, Huawei Ren Zhengfei all belong to this type. In addition, the captain must also condense the will and knowledge of all crew members, dance with the waves, and live with opportunities. And this wave, in the mobile phone industry, is a huge wave formed in the rapid change of market and user demand.
Shen Wei also emphasized the importance of cognitive unity again in this internal annual meeting: "
vivo
The strategic opportunity lies in the high-end breakthrough of the brand, the user-oriented great product is the path of high-end breakthrough, and the innovation ability of forward-looking layout is the cornerstone of the great product."
At the capability level, it leads the direction of key technological innovation, and the underlying technology layout bears fruit, creating a moat of high-end product capabilities.
The synergy between technological innovation and high-end products is easier said than done. This requires mobile phone companies to have a long-term firm determination to invest, avoid "short-term profit-seeking" and piling up parameters such as "simple means", and at the same time have a complete support system and the continuous guidance of correct innovation methodology.
vivo is an innovative leader in screen fingerprint, full screen, and lifting cameras in the mobile phone industry. But in an internal meeting, Vivo asked himself: "Can these technologies form core competencies and long-term differentiation?" The answer is no. This made vivo realize that the short-term leading product selling point cannot achieve capability evolution across the cycle, and it is destined to be difficult to win the true recognition of high-end users by simply selling high prices for hardware.
Three years ago,
There have been two significant changes in vivo R&D.
First, the organizational structure of the R&D team began to be greatly adjusted, greatly increasing the proportion of long-term technical R&D personnel. Hu Baishan, executive vice president of vivo, revealed in a media interview last year that the goal is to increase the proportion of long-term research and development personnel from 20%-30% in the past to 50%-60% in the future. Vivo began to establish the Academia Sinia in 2020, focusing on more cutting-edge technologies for more than three years.
Second, based on the insight into the needs of users' "star scenarios" and their own technical capabilities, identify high-frequency scenarios, determine long-term and sustainable iterative solutions, and establish "four technical long tracks" of design, imaging, system and performance, each track is aligned with cutting-edge technologies of 5-10 years, and accurately matches user needs, product innovation and usage scenarios.
This is also Shen Wei's recognition of Vivo's "capability evolution" at this year's internal annual meeting, including "continuously strengthening the two engines of technology-driven and design-driven"; "After several years of strategic investment in the underlying technology, vivo has ushered in qualitative changes in the four long tracks of design, imaging, system and performance"; and "the user innovation lab, XR lab, lab-on-a-chip, and external cooperation center under the vivo Central Research Institute will be innovatively activated in 2022."
This represents that with vivo in 2022 after completing a comprehensive breakthrough in the overall market, high-end products, user reputation and brand potential, it confirms the correctness of vivo's concept and methodology in the capability level construction in recent years, which will also be of great significance to vivo's next "ability to continue to consolidate".
Another noteworthy thing is that in this process, vivo is forming a more reasonable, efficient and sustainable evolution of individual product projects in the past into a more reasonable, efficient and sustainable evolution of the ability support system, which is also an important reason why vivo has been steadily advancing in the high-end market in recent years, and many product lines including X series, X Fold folding screen, S series, and sub-brand iQOO have "fully bloomed".
Shen Wei pointed out at the annual meeting: "Only by promoting the steady breakthrough of high-end brand with the help of continuous competitive innovation ability layout and great product realization can vivo achieve qualitative change and efficiency."
At the organizational level, maintain the "original intention of entrepreneurship", pay attention to "efficiency and cost reduction", "flat management" and "team awareness".
The smartphone industry has developed to today's market size and maturity, from product innovation and technological breakthroughs to scientific management and steady operation of enterprises, and the collaborative guarantee at the organizational level can be said to be the basic foundation.
Shen Wei highlighted a number of organization-related ideas at this year's internal annual meeting:
One is that vivo must promote"
efficiency and cost reduction", while "
Doing more of the right things and less of the wrong things is the greatest increase in efficiency and cost reduction." In fact, in the face of many uncertainties in the external environment, technological changes and market cycle switching, major TOP mobile phone companies can grasp the most direct "certainty".
The second is to ask vivo"
We will make the creation and health of cash flow the first priority of management." One of the biggest challenges across industries over the past three years has been the risk of cash flow disruption from a lot of uncertainty. Although vivo has sufficient cash flow reserves, it must also further enhance its risk awareness. Therefore, it once again emphasized that "the protracted battle for sustainable development of enterprises is to fight cash reserves and profitability, and cash flow is the living water of enterprises".
The third is
"Experience closed loop" and "business closed loop" are equally important. Vivo's market share to the top is not a "fruit" deliberately pursued by enterprises, but a "natural success" after a long period of "burying its head in the cause" in technology, products, brands, etc. Therefore, vivo should abandon simple parameter stacking, do not fight simple price wars, and refuse the temptation of digital demons. At the same time, when making high-end breakthrough capability layout, we must always take the user's experience closed loop as the judgment standard for the direction of innovation, and use the commercial closed loop to control the boundary of the product. Resolutely do not exchange short-term benefits for market scale, and achieve "healthier and longer" business operations.
The fourth is to stick to the original intention, in the courage to change and innovate
Pay attention to the flat management of enterprises. With the rapid growth of vivo market share, the qualitative breakthrough of high-end transformation, and the addition of a large number of R & D personnel and various experts, vivo is also becoming a "big company". However, how to become a "big company" while maintaining flexible market response and user communication capabilities, as well as reducing internal "department wall" barriers, is one of the ways to achieve "efficiency and cost reduction", and it is also an important guarantee for vivo to become a "healthier and longer" enterprise.
Shen Wei also said at this internal annual meeting: As long as vivo has users in mind, adheres to its duty and normal heart, adheres to long-term and altruistic win-win, burys its head in the cause, and faces challenges, it will definitely be able to cross the cycle, become a better self, and become a healthy and long-term great brand.
Wei Shen, Founder, President and Chief Executive Officer
Summary:
The development of the smartphone industry has passed its 16th year, but almost all practitioners have a consensus: in the next 5-10 years,
There will be two certainties in the smartphone industry: one is that the product form is evolving, but the category of smart phones will exist for a long time; Second, with the arrival of the new technology change cycle, today's market pattern is destined to change again, which has been verified many times in several previous technological change nodes.
For the Chinese mobile phone market, domestic mobile phone companies have made significant progress in technical reserves, product innovation and brand reach compared with the past decade. And Apple also began to decline in the process of "Huawei falling and Apple eating" in 2019-2021, and also in the process of domestic brands such as vivo collectively hitting the high-end in 2022.
IDC data shows that in the fourth quarter of 2021, Apple accounted for 77% of China's high-end smartphones over $600, while Android as a whole accounted for only 23%. In the third quarter of 2022, Apple's share shrank to 67.5%, and Android's share rose to 32.5%. In other words, within a year, Android manufacturers collectively ate nearly 10% of Apple's high-end share.
From the data point of view, a "hidden worry" of domestic mobile phone companies in the past did not occur on a large scale: once domestic Android high-end users migrate to Apple, they will lead to greater "migration costs" due to the "closed ecology" of iOS. Therefore, the current domestic Android camp has gradually formed a consensus: jointly make the Android high-end cake large enough, twist it into a rope, and then grab Apple's share.
From this point of view, as the most successful mobile phone company in the "post-Huawei era" in the overall market and high-end brand breakthrough,
Vivo is actually in the "most favorable" position. This is also an important reason why vivo maintains an optimistic future while maintaining the vigilance that "the situation in the mobile phone industry will be relatively severe in the next three to five years".
Shen Wei pointed out at the annual meeting: "
Faith is the bird of spring, which feels that spring is about to bloom before spring comes. We firmly believe that
Vivo's golden age is not in the past, still in the future, not behind, still in every step of the way."
At the end of the speech, Shen Wei said: "
Every impact of the times is an opportunity for qualitative change. For a business, the greatest work is always the company itself." In fact, this is also vivo's "building great products and great brands that people love" and realizing "evergreen enterprise foundation"
The ultimate goal.
And "
Victory without arrogance", choice"
Vivo, which actively jumps out of the comfort zone, not only shows the sense of mission of Chinese technology enterprises and the sense of responsibility of industry leaders, but also gives a shot in the arm for the successful cycle of today's technology industry. After three years of the pandemic, 2023 has begun to return to normal mode. Standing today for the new decade, China will definitely give birth to greater technology companies than the mobile Internet era, and vivo, which is firmly confident in crossing the cycle, has now officially started on this track.
(Disclaimer: This article comes from the creator of Tencent News client and does not represent the views and positions of Tencent News.) ）