Shynrancaijing original
Author | Wang Min
Edit | Jin Xuanfan
The mobile phone market in 2023 is "rolled" to the point that it can't stop.
Recently, at the MWC World Mobile Congress in Barcelona, domestic mobile phone manufacturers took advantage of new flagships, new technologies and new concepts.
At present, the current situation of the mobile phone market is still not optimistic, and manufacturers are constantly adjusting their strategies and ideas in a timely manner. In the first two years, after Huawei was restricted from releasing some high-end markets, domestic manufacturers spent great efforts to seize the high-end market share. The focus of attention to the mobile phone market is also on the progress of each company's "rushing to the high-end". In 2023, the partial involution of the mid-range machine market, which is dominated by 2,000 yuan to 3,500 yuan, will also be further intensified.
First, it once aimed at the high-end flagship direction of OnePlus, and further the price went down. Then, the Redmi K60 series large memory configuration is reduced, and the realme GT Neo5 will launch a new 16GB+512GB large memory version this week. Since the end of last year, VO Rongmi and other domestic mobile phone manufacturers have continued to fight for performance and price, and launched mid-range machines for the mobile phone market in the first quarter of this year to seize market share.
After one mobile phone manufacturer "provoked a new war", other companies also had to continue to follow up, because the mid-range market is the market of the entire mobile phone market. A number of analysts pointed out to Shenran that mid-range machines can account for six or seven percent of the mobile phone market, and have always been the main battlefield for manufacturers.
However, after experiencing the trough in 2022 and the mobile phone market is still not optimistic in 2023, the best choice for mobile phone manufacturers to maintain or even further expand their share is to start from the mid-range market.
In short, at the beginning of 2023, the mid-range machine market has begun to roll up.
Fight performance, fight price, mobile phone manufacturers roll to mid-range machines
"Recently, OnePlus, Realme, Redmi, and IQOO have begun to fight and grab a share of the mid-range market." Lao Dong, an observer of the mobile phone industry, said to Shen Ran. Entering 2023, the involution of the mobile phone market has not slowed down, and even intensified. The mid-range market, which has always been relatively lively, has become more cruel.
The most direct manifestation is the price war. On February 7, OnePlus released the new machine OnePlus Ace 2, starting from three or four thousand yuan of the flagship machine and dropping to 2799 yuan, pointing directly to the mid-range market.
Just six or seven days later, on February 13, Lu Weibing, president of Xiaomi Group and general manager of Redmi brand, "responded", pointing out that "recently, friends have been fighting a high-profile price war", Redmi will not be "forced to reduce prices", but in order to popularize "512GB" large memory, for the Redmi K60 512GB version released at the end of December last year, the price was reduced by 300 yuan to 2999 yuan.
On the same day, Li Jie, president of OnePlus China, also "replied", saying that he and friends are "not afraid of comparisons with configuration, experience, and price", and "OnePlus Ace 2 will force friends to reduce prices".
At one time, OnePlus has been "small and beautiful" and focused on performance as a feature to hit the high-end market, but last year OnePlus tested the mid-range market through the new product line OnePlus ACE series and the previous OnePlus Nord series for the global market, and at the end of the year, after returning to OPPO, OnePlus announced the adjustment of brand positioning, and OPPO implemented a dual-brand strategy, to operate as OPPO's online brand, further targeting the mid-range machine market, saying that it would achieve the first place in the online market of more than 2,000 yuan within 3 years.
Entering 2023, a total of high-end flagship machine OnePlus 11, mid-range OnePlus Ace 2 and OnePlus Ace 2V three new machines were released, of which OnePlus Ace 2V, equipped with MediaTek Dimensity 9000 flagship chip, according to market forecasts, is also a 2,000 yuan mobile phone.
In addition to OnePlus, Realme also released the realme GT Neo starting at 5,2499 yuan in February, and after Redmi shouted a price cut for the K60 series 512GB configuration, it also announced that it would launch a 512GB large-memory version of the mobile phone in March.
In the mid-range machine market, which takes OnePlus and Redmi as the focus of competition, other manufacturers are not inactive. Since the end of last year, various manufacturers have been releasing mid-range machines in preparation for grabbing market share in the first quarter of 2023. The most typical are Honor's Honor 80 series, Redmi's Redme K60 series, vivo's S16 series, vivo's iQOO Neo 7 racing version, all of which are 2,000 yuan mobile phones.
Behind the price war, war of words, and frequent new machines, manufacturers are rolling up to mid-range machines to fight for configuration and cost performance.
At a time when the software upgrade experience has not improved much, consumers pay more attention to hardware performance when buying mobile phones.
In the past two years, mobile phone manufacturers have collectively rushed to the high-end strategy, which has also driven the rapid iteration of the overall mobile phone hardware product line. The most significant thing is that a large number of original flagship and sub-flagship configurations have been decentralized to mid-range machines in a shorter period of time.
Therefore, the situation presented by the mobile phone market is that the Snapdragon 8+ chip, which was originally used in flagship mobile phones, has been generally delegated to this batch of mid-range machines this year. The recent actions of Realme, Redmi and OnePlus are also accelerating the popularity of 512GB large memory configuration in mid-range machines.
In addition, the Redmi K60 is equipped with domestic 2K screens, which has the advantage of the few 2K screens at the same price; iQOO Neo7 Racing Edition uses 120W fast charging technology; The OnePlus Ace 2 features a curved screen + IMX890 main camera.
As soon as 2023 begins, the involution of the mobile phone market begins with the battle of the mid-range machine market.
Why is the mid-range machine market getting more and more volatile?
In fact, as the basic plate of the mobile phone market, the mid-range machine has always been fiercely competitive, and the reason why the local competition will be more fierce in 2023 also has a special background.
On the one hand, entering 2023, manufacturers have an urgent need to stabilize market share.
In 2022, the overall shipment volume of the mobile phone market will decline as a whole, and the shipments of each company will also be affected by the trend of the broader market market.
According to Canalys data, the total global smartphone shipments in 2022 will be less than 1.2 billion units, and the global annual shipment will decline by 12%; In 2022, China's mobile phone shipments were about 286 million units, down 13.2% year-on-year. Among them, in the domestic market, among domestic manufacturers, the shipments of vivo and OPPO have fallen sharply, down as much as 27%, and Xiaomi has also fallen by 24%, and only the glory that is still in the stage of regaining the market has grown.
In the first two years, domestic manufacturers were hitting the high-end market, but it is still difficult to say that it is successful. Li Gang, a senior analyst in the mobile phone industry, said that in the past two years, after Huawei mobile phones gave up some high-end market share due to chip restrictions, domestic mobile phone manufacturers are desperately competing for the high-end mobile phone market, by stacking hardware and making folding screen mobile phones to "rush to the high-end", but by the second half of 2022, the high-end market is still strong by Apple.
After the poor effect of rushing to the high-end, domestic manufacturers must seize the mid-range machine market if they want to stabilize the basic market and market share.
"Whether it is from profit or shipment, this is the most favorable market for manufacturers." Li Gang analyzed. The overall mobile phone industry is not good, although the high-end market has a high profit margin, it is difficult to break, while the low-end mobile phone profit margin is low, manufacturers generally pay more attention to the mid-end market.
Sui Qian, senior director of Strategy Analytics, also expressed a similar view, she pointed out to Shen Ran that considering that the influence of domestic manufacturers in the high-end market in addition to Huawei is very limited, and the low-end market is facing the pressure of destocking and low profits, the mid-end market will naturally become a must for domestic shopping malls.
According to data from BGD Consulting, a third-party research institution, in the price segment of 2,000 yuan to 4,000 yuan in the Chinese mobile phone market in 2022, OPPO has the highest share at 24.3%, followed by vivo with 23.9%, Honor at 21.1%, Xiaomi at 14.2%, and other brands account for 16.5%.
On the other hand, due to overcapacity, prices and costs of some parts in the mobile phone market have fallen, and manufacturers' inventories are at a high level, changes in the upstream and downstream industrial chains have also led to the involution of the mid-range machine market.
Li Gang mentioned that there are a lot of spare parts inventory of various manufacturers, such as gradually putting large memory on mid-range machines, which is also related to the inventory of each family. At the same time, the price cost of some parts has fallen by 20%-30%, and manufacturers no longer need to fight against each other through these configurations on high-end machines, so they extend the battlefield to mid-range machines.
Canalys analyst Zhu Jiahan also analyzed that benefiting from the advantages of the overall price decline, the BOM (bill of materials) cost of mobile phones has decreased, and many accessories and technologies for high-end flagship machines have been delegated to mid-range machines, in fact, the market is pushing manufacturers forward.
Tianfeng International analyst Guo Mingxi said in February that almost all Android brands face the risk of high inventory due to weak demand. Taking Xiaomi as an example, in Xiaomi's component inventory (about 20-30 million mobile phones), the most serious situation is processor chips.
As early as the second half of last year, the overall shipment of the mobile phone market declined, and the weak demand for new machines led to fluctuations in the supply and price of upstream chips. This year, there are supply chain sources that it is expected that MediaTek will reduce the 5G entry chip to less than $20 (equivalent to about 135 yuan) in the second half of the year, approaching the price of 4G chips, and Qualcomm and MediaTek, the two major chip manufacturers, decided not to launch 4G new chips this year.
In addition to chips, smartphone panel prices are also falling. CINNO Research reported that in the first quarter of 2023, the smartphone panel market entered the traditional off-season, and prices continued to be in a downward cycle, and the decline widened. For example, due to factors such as sluggish overall panel demand, the price of a-Si/LTPS panels, which is mainly used in smartphones, is declining at a rate of $0.4 per month.
The decline in the cost of mobile phones has also accelerated the price war of manufacturers in the mid-range market.
Will the mobile phone market still be good in 2023?
At the beginning of 2023, will the mid-range machine roll bring big changes to the mobile phone market? The answer is clearly no.
Mobile phones are already a fully competitive market, and in the past two years, after Huawei gave up some of its market share, the mobile phone market has started a reshuffle.
According to Counterpoint Research data, the share of China's domestic smartphone brands has not changed in 2021 and 2022, in order: vivo, OPPO, honor, and Xiaomi. This represents that in the post-Huawei era, a new pattern of "VO Rongmi" in the domestic smartphone market has been formed.
However, after the extreme year of 2022, coming to 2023, the whole industry is now pinning its hopes on the gradual improvement of the economic environment in 2023, but mobile phone manufacturers also need some new strategies to reactivate the recovery of the mobile phone market.
In the face of the largest domestic mobile phone market, the competition of the head manufacturers is still intensifying, and it continues to take the high-end route. New machine releases, market investment, channel construction, manufacturers have not stopped. However, the channel construction of each company has been stable, and some analysts predict that the share change brought by mid-range machine products and configuration may also be limited.
From a global point of view, affected by inflation, the Russian-Ukrainian war, geopolitics and other factors, the global consumer electronics market is in a downturn, and the overseas market has shrunk more seriously. Some practitioners mentioned that last year in some overseas markets, manufacturers were operating at a loss, and entering 2023, compared with the radicalization of the previous two years, the pace of development has slowed down.
Zhu Jiahan mentioned that in 2023, domestic manufacturers will become more cautious and even relatively conservative when going overseas, and begin to reduce costs and cut production lines, and some channel investment is also shrinking.
Encountering a trough once in nearly a decade, the recovery of the mobile phone market is not so easy.
A practitioner pointed out that after the adjustment of the epidemic policy in January, China's mobile phone market had some short-term rebound, but this small peak did not last. Judging from the data in February and March, mobile phone sales are still dismal.
Major institutions and analysts are not optimistic about the mobile phone market in 2023.
Li Gang believes that the domestic market may recover by about 5% with the recovery, but in the international market, it is greatly affected by macro factors such as the Russian-Ukrainian war, and the share of the global market may not change much.
Sui Qian also pointed out that in 2023, both the Chinese market and the global market will face a decline in consumer purchasing power and weak demand for replacement. She predicted that China's overall smart market should be the same as last year, and there will be no sharp rebound. The global market is also likely to fluctuate in the range of plus or minus 1% annual growth rate.
IDC released a report that in 2023, the global smartphone market shipments will be less than 1.2 billion units, a year-on-year decrease of 1.1%; Shipments to the Chinese market are expected to be only 283 million units, down 1.1% y/y.
At the recent MWC conference, Xiaomi and Honor respectively brought high-end flagship phones, OPPO brought vertical folding screen mobile phones, OnePlus showed the first active water-cooled mobile phone, and Lenovo also brought scroll screen concept mobile phones. In addition to mobile phones, Xiaomi launched the first wireless AR glasses and brought robot dogs and robots to overseas markets; ZTE came up with AR glasses, nubia Neovision Glass, and glasses-free 3D tablets. However, these new technologies and innovations are not revolutionary.
However, IDC expects that the global smartphone market will ship 1.263 billion in 2024, a year-on-year increase of 5.9%; China's smartphone market shipments returned to the 300 million market market, a year-on-year increase of 6.2%.
High-end rolls do not move, innovation is difficult to change, mid-range machine internal rolls intensify, I have to say that the mobile phone market, has not yet come out of the difficult moment. The time for optimism in the market has been delayed.
*The title image and the accompanying picture in the text are from Visual China. At the request of the interviewee, Lao Dong in the article is a pseudonym.