Wen | Wang Dong, Yan Yuanyuan
Editor|Tang Xiaoyuan
Total text: 6439 words
Estimated reading time: 7 minutes
Behind the unprecedented mourning of the global smartphone industry in 2022 is a fact that no one can avoid anymore: how terrible the lack of innovation is. It will trap the industry in meaningless involvement. This is even worse for a market that consumers don't already buy.
First, the data is tragic: global smartphone shipments in 2022 fell 11%-12% year-on-year, the worst performance since 2013.
Apple and Samsung saw declines of around 4%. Vivo, OPPO, Xiaomi three Chinese manufacturers are even worse, with a decline of about 20%.
Secondly, 2022 looks miserable but only the appearance - as early as 2016, global smartphone shipments, including China, entered a decline channel. The 2021 rally was short-lived
In the long and continuous decline process, 2022 has become the "coldest winter" for many reasons:
Including the superposition of the impact of the three-year pandemic, which has led to a decline in global consumer income levels and consumer confidence.
Including global geopolitical conflicts, such as the surge in energy prices caused by the Russia-Ukraine conflict, the Fed's interest rate hike, etc. on the global industrial chain and economy.
and logistics and production stagnation caused by the pandemic.
But the answer to the global smartphone industry's recession isn't for any of the above reasons:
In the view of Starship Zhizao, the lack of "innovation" of wolf nature is a self-deceptive struggle after all.
From the consumer side, with the continuous increase in the penetration rate of smart phones, the entire industry has entered the stage of stock market competition from incremental market competition. But no matter how many gimmicks there are, they are all so-called "micro-innovations". The stagnation of industrial innovation makes people unable to raise the desire to change.
From the production side, the phenomenon that the cost and price decline brought about by technological breakthroughs in glass screens, cameras, batteries and other industries, and the final advantage superimposed on the overall price of smart phones, has ceased to exist in recent years.
Today, all game-breaking strategies point in one direction: to let the industry find one or even several ways to innovate again, just as smartphones once surprised everyone.
01
Two golden ages
On the night of September 24, 2010, people with tents, sleeping bags, and air beds waited all night in front of a shop in Sanlitun, Beijing. The scene is comparable to buying train tickets for the Spring Festival.
The crowd has only one goal - to buy Apple's iPhone 4 as soon as possible.
It's what Steve Jobs said, "People don't know what they want until you put the product in front of them." Source: Unsplash
In 2007, the first iPhone was released. This phone with a 3.5-inch LCD screen looks very mini today, with only one color and a non-removable battery. But it is equipped with Samsung S5L8900 chip and a 2 million pixel rear camera, and the most innovative - touch screen interface, which fully replaces the traditional keyboard.
According to the recollections of netizens: "When the wrist is turned dashingly, it becomes a Landscape state, and the photo is turned horizontally." By this time, I was basically dumbfounded. ”
In 2010, the iPhone 4 came out. This time brings innovative features such as high-resolution screens, high-resolution cameras, Facetime video calls, and multitasking.
The enthusiasm of waiting for a cell phone late at night is etched in many people's minds – memories are unforgettable because they never appear again.
When the innovation of the original generation of smart machines collided with the large-scale development of 3G networks, a new era was born -
As China enters the second round of urbanization dominated by second-tier cities, more and more coffee shops, bars, and CBDs appear in the north and south of the river, and the new urban crowd also from the north and south of the river is shuttling through it. People can listen to songs and download games at the same time, relying only on a phone that is 9.3 mm thick and weighs 137 grams.
All this reconstructed the post-millennial imagination of what "modernity" would look like.
The advent of the mobile Internet era is accompanied by the weakening of traditional voice services and the rise of traffic data services. The development of the information and communication industry has also entered a new stage.
Source: Unsplash
It can be said that the rise of China's smartphone industry has eaten many waves of dividends -
There are touch screens, cameras, multitasking and other multi-point innovations;
There is the rapid development of China's 3G business: At that time, in order to accelerate the popularization of 3G, telecom operators greatly lowered the threshold of 3G terminals through centralized procurement, terminal subsidies, etc., and thousands of yuan machines were born.
Among them, a vigorous cottage history finally completed the development of China's mobile phone market, and finally fell into a major upgrade of China's electronics industry.
In Starship Zhizo's opening article "The Evolution of a Piece of Socialist Glass", it was written about the Chinese cottage machine, this controversial evolution -
From the production point of view, the "Shanzhai Series" represented by the cottage machine was born in the context of China's "world factory", and the Pearl River Delta has accumulated more than 20 years of comprehensive manufacturing strength.
From the perspective of life cycle, it is destined to be a short tide between "OEM foundry" and "OBM private label". The speed of assembly, lack of technical strength, and the fact of buying all intermediate products doom it to never be mastered.
From a socio-cultural point of view, it is a complex and inevitable phenomenon. Behind it is a coincidence between the growing consumer demand of the people and the foundry mixed with desire and greed.
The huge industrial cluster eventually left by the cottage machine continues to attract global resources, and the Xiaomi, OPPO, vivo and so on forged by it have allowed Chinese mobile phones to go out of the novice village in several industries in the manufacturing industry in parallel - born in grass, experienced in barbarism, and smiled backbone. And finally, on its own core technology, establish a new industrial extension. ”
The former Huaqiangbei Source: Shenzhen Municipal Government official website
By 2012, global smartphone shipments increased by 45% year-on-year, and the Chinese market increased by 135% year-on-year.
In 2014, the mainland mobile Internet speed accelerated iterative upgrade, new formats and services such as short video, online live broadcast, and online games broke ground from the soil of China's 4G era. The rise of the e-commerce economy has also spawned the further prosperity of "Internet celebrity cities" such as Chengdu, Hangzhou and Chongqing in southern cities.
The imagination of modern cities is no longer limited to the north, Shanghai, Guangzhou and Shenzhen, but has begun to shift to second- and third-tier cities.
During this period, it was accompanied by another huge benefit for China's smartphone industry: the "speed up and fee reduction" policy. The mainland's traffic data tariffs have been greatly reduced, stimulating the rapid increase of user traffic consumption.
It should be said that this is a process of repeated promotion between each other: live broadcast economy, Internet celebrity diet, and beauty, clothing and other goods "goods" plus China's e-commerce to occupy the wind, supplemented by the huge five-ring market laid down by the cottage machine, all positive factors superimposed, China's smartphone industry to the peak of glory.
02
Rout after surprise
In 2016, global smartphone shipments reached a record peak of 1.47 billion units, of which 467 million smartphones were shipped to the Chinese market. However, everything is already "the end of the strong crossbow", and the growth rate of shipments this year has fallen from double digits in the previous year to single digits, only 2.3%.
After that, smartphone shipments in the Chinese market entered a decline channel.
This is also caused by the superposition of multiple factors:
First of all, with the rapid increase in mobile phone penetration, the user dividend of the smartphone industry is gradually fading. At the end of 2016, 10 provinces and cities in China had a mobile phone penetration rate of more than 100 mobile phones per 100 people, and by 2017, the mobile phone penetration rate in mainland China exceeded 100 mobile phones per 100 people.
Everyone has a smartphone, which means that the new demand in the market basically comes from user replacement, and the industry has over-entered the stage of stock competition.
Second, 5G has not yet spawned the strong replacement demand of users like 4G.
In the 4G era, driven by a large number of innovative applications, users have a strong willingness to replace 3G mobile phones with 4G mobile phones, which has set off a large-scale replacement boom. In the 5G era, this scene did not play out as scheduled.
So far, 5G has not shown a killer application in the field of TOC. The most direct comparison is that after three years of large-scale commercial use, the penetration rate of 4G users in mainland China exceeds 60%, while the penetration rate of 5G is only 33%, and the gap is very obvious. If you don't believe and ask your friends, how many people have taken the initiative to replace 5G mobile phones?
Third, and most importantly, the smartphone industry's lack of innovation.
Over the years, smartphone manufacturers have continued to innovate, which has indeed promoted the upgrade of screens, cameras, charging, memory and even chip processes to a certain extent. But there is no disruptive innovation.
In terms of screens, the large screen has been rolled to a desperate situation. Roll it up unless the size of the human palm evolves with it.
Once Apple announced that "3.5 inches is the golden size of smartphones", but the screen size of the iPhone continues to increase to 4.7 inches, 5.8 inches, 6.1 inches, 6.7 inches. The screen size cannot be expanded all the time, otherwise it will affect the sense of holding, so in previous years, manufacturers have launched full-screen mobile phones with a higher screen-to-body ratio. But now, it is difficult to make a breakthrough in this area.
Let's talk about taking pictures. The number of cameras on mobile phones has grown rapidly in recent years, from one to two, three, four, five, and pixels from 1 million to 20 million, 50 million, 100 million. Professional terms such as ultra-sensitive lenses, telephoto lenses, ultra-wide-angle lenses, and macro lenses make ordinary consumers dazzled and dizzy.
The ever-increasing power of smartphone photography has knocked digital cameras to the ground and then kicked them out of history. But at present, limited by the size and energy consumption of mobile phones, 1-inch sensors are the limit, and it is difficult to go further. And this year's domestic mobile phone lens shipments still need to wait for the industry inflection point.
Let's look at battery technology. Subject to the slow progress of lithium battery technology itself and the requirements of the mobile phone itself for size and thinness, the battery capacity of the current flagship mobile phone is about 4000-5000 mAh, which is generally enough for users to use for a day. Unless there is a breakthrough in battery technology, the battery life of the smartphone can be doubled, such as the battery life increased to 3 days or even a week, and the solution to the phone's power anxiety can bring surprises.
Nokia 3310 with long standby time Source: Wikipedia
Chips are becoming a new wrestling point for Chinese smartphone manufacturers. Generally speaking, the chips in mobile phones can be classified into two categories, one is the most core SOC system-on-chip, and the other is various auxiliary chips, such as image chips, battery management chips, AI chips and so on. At present, vivo, OPPO, Xiaomi, etc. have launched self-research around auxiliary chips and launched corresponding products to enhance differentiated competitive advantages and product selling points, but there has been no breakthrough.
03
The folding screen is unbearable
The faint reflected light of the folding screen is already the only bright color that everyone wants to catch in the long bleakness of the smartphone industry.
It is generally believed that the folding screen can be divided into inner fold, outer fold and vertical fold from the form. For example, the Huawei Mate X3 screen is a typical inner fold, which can better protect the screen, but the crease is also relatively obvious. The inner fold is the solution used by most models today.
vivo X Fold is also a typical inner folding screen Source: vivo official website
Huawei Mate Xs 2 is folded out. The feature is that the screen crease is relatively shallow, but the exposed screen is also more vulnerable to damage, and the requirements for hinges are higher.
Outer folding screen: Huawei Mate Xs 2 Source: Huawei official website
OPPO Find N2 Flip, Galaxy Z Filp, etc. are typical vertical folds. It is characterized by being lightweight and portable.
Vertical folding screen: OPPO Find N2 Flip Source: OPPO official website
Folding screen mobile phones are the product of people's pursuit of screen vision and portability in the absence of technological breakthroughs. It was born out of the folding concept machine demonstrated by Polymer Vision in 2006.
In April 2022, vivo released its first folding screen mobile phone X Fold - since then, the mainstream mobile phone manufacturers in the Android camp have all poured into the folding screen track. Overall, in the past year, the development speed of folding screen mobile phones has exceeded expectations.
IDC data: In the fourth quarter of 2022, China's folding screen mobile phone shipments exceeded 1.1 million units in a single quarter, and nearly 3.3 million units were shipped for the whole year, a year-on-year increase of 118%, a higher than expected growth rate. The penetration rate of folding screen mobile phones increased from 0.5% in 2021 to 1.2%.
Counterpoint estimates that global shipments of folding screen mobile phones may reach 22.7 million units in 2023.
CINNO Research data: In China's folding screen mobile phone market in 2022, the sales proportion of products above 15,000 yuan will decrease from 62% in 2021 to 21% in 2022, and the proportion of product sales in the range of 10,000 yuan to 14,900 yuan will decrease from 20% to 10%
Today's folding screen is not yet able to bear the responsibility of the recovery of the smartphone industry. It has been four years since Samsung launched the folding screen phone Galaxy Z Fold in 2019 - but Apple has never explicitly stated that it will launch a folding screen product.
From the perspective of the folding screen industry chain, the key in the current folding screen supply chain is that the core components such as hinges and covers need to be further matured in order to lay the foundation for the possible future outbreak of folding screens.
In terms of hinges, compared with the traditional process, the MIM process has lower production cost, relatively stronger mass production capacity, and high design freedom, which is expected to become the mainstream of hinge manufacturing.
In terms of folding screen mobile phone cover materials, some industry views are that ultra-thin flexible glass UTG is lighter, higher light transmittance, and can reduce creases, and in the future, with the improvement of yield and further reduction of cost, UTG solutions may become the mainstream.
In the short term, folding screen mobile phones are still a category for niche consumers, and they cannot help the smartphone market as a whole get out of the cold winter and out of the era of stock competition.
04
The next wave, "human-computer interaction" revolution
The PC Era: Jobs and Bill Gates' graphical user interface-based Mac and Windows were disruptive innovations for character interaction.
Mobile Internet era: The iPhone equipped with groundbreaking touchscreen technology was born, coupled with the popularity of 3G networks, mobile Internet has become a new driving force for the development of the information and communication industry, including terminals.
Since then, smartphone innovation has never been able to break out of the original framework. Everyone is asking, where will the next big innovation be?
Before looking for the answer to this question, we need to recap, what has the major change in mobile phones brought to people in the past?
The answer is "a change in the way humans and computers interact".
A still from "Ready Player One"
In the era of functional machines, the physical keyboard is a bridge for human-computer interaction. In the era of smart phones, the touch screen brings people a more convenient and friendly human-computer interaction experience, and no longer occupies the front position of the mobile phone, which makes room for the large screen of the mobile phone, which is the same as the change brought by the mouse and window to the PC.
The iPhone is a new species that integrates iPod + mobile phone + Internet browser. In terms of interaction, the keyboard is converted to touch. Starship believes that the future interaction method cannot be predicted, and it can only be gradually defined in a little exploration. In the future, the interaction mode of smart phones may have the following two characteristics: 1) The presence of AI has been further strengthened. 2) The boundaries of definition between smart wearables, smart watches, smartphones, etc. will be more open.
Based on this, the following two industries may become the key points for the evolution of new forms of smartphones in the future -
The first is 6G. 6G is a transition from the Internet of Everything to the Intelligent Connection of Everything on the basis of 5G, and has become a link connecting the real physical world and the virtual digital world.
6G will provide fully immersive interaction scenarios, supporting precise spatial interactions, and satisfying our multi-sense, even emotional and conscious level of connected interaction.
This means that mobile phones in the 6G era must meet the needs of users for immersive interactive scenarios - it must have perception, cognitive ability, and thinking ability. A widely accepted view within the industry is that the future of people and mobile phone agents is no longer a relationship of domination and domination, but a more equal interaction.
In the ancient science fiction drama "Magic Phone", mobile phones already have advanced functions such as recombinant genes. Shu Chang plays a mobile phone.
The second is the AVR industry. VR/AR allows today's smartphones to add "three-dimensional" capabilities – immersive information interaction.
At present, global AR applications are generally concentrated on the B side, and the C-side application scenario is still very single. The application of VR is also focused on games, film and television viewing and other scenarios.
At present, the VR industry chain mainly includes terminal hardware, network platform and content production. The specific terminal hardware part is mainly composed of screen, storage, processor, shell material, auxiliary materials, speakers and other hardware. Now the global VR device is still in its infancy.
The key links required for the breakthrough of the industrial outbreak are still optics, display screens, chips, etc. Specific to the chip field, the VR/AR field is still the largest Qualcomm chip, and domestic chips are struggling to catch up.
End
Among the three smartphone countries of China, the United States and South Korea, the United States has a great first-mover advantage in related technologies. The rise of its related technology industry can be traced back to the Cold War space race between the United States and the Soviet Union, which gave birth to the semiconductor industry and technology giants such as Apple.
Most of China's fruit chain companies still rely on Apple, a single large customer—how to get rid of the anxiety of being "subordinate" to Apple, and how to climb the high value-added ends of the smile curve, is a thinking question that every Chinese fruit chain must solve.
South Korea has companies like Samsung that have successfully transformed from traditional manufacturing to technology giants. Today, Samsung is still the world's leading supplier of AMOLED screens and solid-state memory chips.
The advantage of China's smartphone industry lies in the fact that relying on rich experience and productivity of the world's factories, it has quickly established a relatively complete industrial supply chain. What we expect is that with the strengthening of the strength of local foundries such as Luxshare Precision and BYD Electronics, coupled with the growth of R&D strength and market share of mobile phone companies such as Huawei, Xiaomi, vivo, and OPPO, with the help of new technologies such as artificial intelligence, the development of the smartphone industry will be accelerated.
In the era of PCs and functional machines, innovative intelligent terminals have opened a pair of metal eyes for human beings to understand each other and contact the wider world.
In the era of mobile Internet, smart phones add a high-powered telescope to these eyes. In the future, human beings will once again extend their physical height through scientific and technological innovation.
Resources:
[1] "22 Years of Lens "Roll" History, Smartphone War Rolled into a Dead End", Snow Leopard Finance and Economics
[2] Research and Policy Suggestions on the Development of Intelligent Terminal Industry in Mainland China, Liu Jiuru
[3] What's the Next Big Innovation? Observer of the Economic Observer
[4] "Smartphone market welcomes the lowest point in ten years, domestic manufacturers are fighting hard in self-developed chips and other fields" Securities Daily
[5] "Consumer Electronics Industry Review Report: Mobile Phone Inventory is Expected to Bottom Out in Q2, Pay Attention to Folding Screen Innovation Opportunities" Zheshang Securities
[6] "Metaverse 2023: The "big" year of hardware" Peking University
[7] "Folding Screen: The Counteroffensive of the Android Camp" by Shenwan Hongyuan Research
[8] Research Report on the Development of the Metaverse, Tsinghua University
[9] Will folding screen mobile phones become the main machine in the future? Southern Metropolis Daily
[10] Global Smartphone Intelligence Tracker Report, IDC
[11] "6G Overall Vision and Potential Key Technologies White Paper" IMT-2030 (6G) Promotion Group