Author: Zheng Xantong
The sales season from New Year's Day to the Spring Festival is an important moment for mobile phone manufacturers to get off to a successful start of the year. Recently, the Times reporter visited the Guangzhou mobile phone market and found that many mobile phone brands have a large discount for promotion, and some clearance styles have reduced their prices by 500~2000 yuan.
Many brands hope to promote consumers to replace their machines by trading in old ones and cooperating with telecom operators. According to a number of store staff, the discount is the largest in recent months.
Not only the prices of the products on sale have been reduced, but the newly released products are also concentrated in the middle and low price segments.
According to the Times reporter, from December 2022 to early January 2023, nearly 10 press conferences were rarely held in the domestic mobile phone market, and manufacturers intended to "grab" consumers near the Spring Festival.
The Times reporter learned from a number of mobile phone stores that the new machine listed in the Spring Festival this year will become the main product in the market, and many new machines strengthen the cost performance, and the price is even lower than the previous generation model.
"Compared with blindly discounts, now brands are more willing to talk about real prices and cost performance, and use low prices to grab users when they are on sale." A vivo clerk said.
Behind the manufacturer's strengthened cost-effective route, the domestic mobile phone market has continued to be weak in the past year. At the beginning of 2022, major mobile phone manufacturers still hold high the banner of high-end, but the "impulse" of high-end models with high prices is relatively difficult, and manufacturers have no choice but to return to the cost-effective route.
IDC expects that China's mobile phone market will experience a weak demand in 2022, and shipments will decline by 0.9% year-on-year in 2023, and it is expected to rebound in 2024. Fierce competition starts from the Spring Festival, compared with the high-end that manufacturers are difficult to achieve overnight, cost-effective is more likely to be the keyword of the mobile phone market in 2023.
Source: Figureworm Creative
Manufacturers are approaching the Spring Festival fancy promotion
Recently, Li Peng (pseudonym), who is familiar with the consumer electronics semiconductor industry, told the Times reporter that consumer electronics represented by mobile phones have supported the prosperity of the semiconductor industry in the past 20 years. In 2022, this logic fails, causing related semiconductor companies to close down and reduce production, and this trend is expected to continue into 2023.
The chill felt in the supply chain comes from the consumer end market. According to IDC's prediction, the mobile phone market may fall to the bottom in 2023, and mobile phone manufacturers need to grab customers in the existing market at more favorable prices.
Taking Apple as an example, Jibang Consulting predicts that Apple's iPhone shipments in the first quarter of 2023 are expected to decline by 22% year-on-year. Cutting prices became Apple's way of trying to recover sales.
The slow buying platform shows that the price of iPhone13 has dropped significantly, and the price has been around 4600 yuan recently, down about 600 yuan compared with November; iPhone 14 also ushered in the most obvious price decline since its launch, compared with 5999 yuan when it was released, once as low as 4799 yuan in January, and recently fluctuated around 5200 yuan.
Domestic mainstream mobile phone brands also take advantage of the Spring Festival peak season to offer discount promotions. The Times reporter visited a number of OPPO, vivo, Huawei, Honor, and Xiaomi stores in Guangzhou and learned that most stores cooperate with telecom operators, and consumers promise to use 2-3 years of specific phone bill packages, and discounts can be obtained when purchasing. The monthly price of the phone package is more than 59~300 yuan, and the purchase discount is 400~1200 yuan.
Trade-in is also the main way to boost purchases. Vivo and Huawei have store staff said that the price of old machines can be deducted from the price of new machines, and from now to the Spring Festival to participate in the trade-in activities, there will be an additional subsidy of 100~200 yuan for deduction.
Many old models have significantly reduced their prices, such as Xiaomi's old folding screen model with a clear warehouse by 2,000 yuan, and vivo S9e with a clear warehouse reduced by 500 yuan and sold for 1,899 yuan, and the vivo clerk said that the model "can sell four or five units a day" after the price reduction. According to the statistics of the Times reporter, most of the old models on sale are currently reduced in price by 100~400 yuan.
Source: Figureworm Creative
A number of store staff told reporters that the current purchase is the most cost-effective time in recent months, and the discount degree is similar to that of the previous National Day period, but there are more gifting activities. If Xiaomi purchases a Spring Festival gift, if you give up the gift, you can exchange it for a 100 yuan discount.
Back to the cost-effective development route
Different from the previous reliance on old machine price reduction promotion, a number of domestic mobile phone brand clerks pointed out to the Times reporter that in addition to a small number of clearance machines, most of the old models will be stopped before the price falls sharply, manufacturers are more willing to promote consumption with new machines, and from the beginning of the release of new machines to low prices, relying on real prices to attract consumers.
Some of the new machines are even cheaper than the previous generation. For example, vivo released the S16 series in December 2022. A vivo clerk told reporters that this model sold well after it was launched.
"The S16 of the 8G + 256G configuration sells for 2699 yuan, and the price is lower than the price of 2999 yuan for the same configuration of the S15, and it is also lower than the current discount price of the latter of 2799 yuan, and the new camera and other configurations are significantly higher than the old model, consumers naturally choose the new model." The clerk said.
The same situation can be seen in Xiaomi stores. The Redmi K60 released at the end of December 2022 starts at 2,499 yuan, and when the chip and screen are upgraded, it is only 100 yuan higher than the K50 with the same memory configuration, claiming to be the only mobile phone in the same price segment that adopts a 2K flexible straight screen.
According to the Times reporter, among the nearly 10 new machines intensively released from December 2022 to January this year, the price is mainly concentrated in the mid-range price of 2000~4000 yuan, and the "cost-effective" label is obvious.
Source: Figureworm Creative
In addition, a small number of other newly released high-end models, the price is also concentrated in 4000~5000 yuan, the pricing is also significantly "convergent" compared with the past.
Previously, domestic mobile phone manufacturers had a comprehensive hardware net profit margin rarely exceeded 5%, as mobile phone manufacturers return to the cost-effective route, this figure may become lower.
After returning to OPPO, OnePlus made it clear that its main task is to make increments for the company. Now is the critical period for its sales to climb. To this end, in December 2022, OnePlus said that it "does a good job at any cost", and the comprehensive net profit margin of hardware can be 0 in the next 3 years. Subsequently, it released a one-plus 11 with a starting price of 3999 yuan, saying that the price was lower than several friendly products with the same memory configuration.
"Making such a price decision is really tangled and requires a lot of determination, and we hope to make friends with more users." We also hope to become a 'catfish' in the industry and bring new changes. Li Jie, president of OnePlus China, said in a recent interview with Times and other media groups.
Folding screens with higher prices have also begun to consider cost performance. For example, OPPO launched its first vertical folding mobile phone in December 2022, compared with the horizontal folding mobile phone on the market that often costs tens of thousands of yuan, this vertical folding mobile phone starts at only 5,999 yuan.
The relevant person in charge of OPPO frankly told the Times and other media in a recent group visit that he is optimistic about vertical folding mobile phones, and believes that the proportion of domestic vertical folding small folding screen mobile phones will increase to a similar level to horizontal folding.
At the high end of the market, Apple is still strong. The latest data released by Canalys shows that Apple's share of the global smartphone market ranked first in the fourth quarter of 2022, and its share has increased, while the share of some domestic brands has declined.
In this way, although domestic mobile phone brands have made great efforts to develop the high-end market in the past two years, there is still a big gap with Apple. When the market continues to cool down, not obsessing to high-end and telling a good cost-effective story may be the key to the development of mobile phone manufacturers in the new year.