Are gaming phones doomed? Lenovo cut its self-operated mobile phone business across the board, and it was difficult to save the rescuer

Source of this article: Times Finance Author: Xie Silin

Image source: Pixabay

On March 21, the same day that Lenovo released the Savior Y900 flagship tablet, the Savior mobile phone ushered in its own closing moment.

On the same day, an anonymous user who was certified as an employee of Lenovo Group broke the news on the workplace social platform Pulse that Lenovo Group issued a notice that its own mobile phone brand Savior mobile phone business was cut across the board. From newcomers to B10 (director, chief engineer), almost no one is spared. From the China Cool Union of the year to the current e-sports mobile phone, Lenovo once again cut its own mobile phone business, leaving only Motorola, which was acquired for $2.9 billion in 2014.

Lenovo internal employee Zhang Qing (pseudonym) confirmed the news to Times Finance, saying that since April last year, Lenovo has merged the mobile phone and tablet businesses of the rescuer. In this change, the entire Savior mobile phone business was laid off, leaving only the tablet business with a few employees.

According to Sina Technology, the number of layoffs is between 50 and 100, and the resignation compensation is signed according to N+2 within 3 days after the interview.

The Rescuer phone was Lenovo's last shot to revive its mobile phone business. The name of "Rescuer", on the one hand, Lenovo wants to borrow the fame of its classic game books for marketing, on the other hand, it also seems to have the mission of "restoring glory".

Unfortunately, after 21 years of ups and downs, Lenovo's mobile phone industry status is falling rapidly, and the rescuer has failed to save Lenovo after all.

E-sports mobile point of no return

Initially, Lenovo pinned its hopes of reviving its mobile phone business on e-sports phones.

But it's a niche market that seems to fit the trends of young people. Previously, Xiaomi Group President Lu Weibing expressed his views on e-sports mobile phones, saying that e-sports mobile phones will be sold in China between 1.6 million and 1.7 million units in 2020. Another subdivision, after a product is launched, the maximum sales volume is two or three hundred thousand units.

With the development of technology, the selling point of e-sports mobile phones with high configuration and suitable for games has also become a false proposition. Internet analyst Ding Daoshi pointed out to Times Finance that at this stage, the hardware configuration of many ordinary mobile phones is almost equivalent to that of e-sports mobile phones, and even surpasses e-sports mobile phones, and consumers have no reason to pay for additional game attributes of e-sports mobile phones.

It is precisely because of this that when warming up for Xiaomi 13 at the end of last year, Lu Weibing said bluntly that consumers no longer need an e-sports mobile phone in 2023, and the e-sports mobile phone is destined to die.

The fall of the black shark is proof of this. This brand, which once occupied the first place in the e-sports mobile phone market, still failed to survive the sharp reduction in the size of the e-sports mobile phone market in 2022.

According to data from the whale staff of the research agency, the cumulative sales of game mobile phones from January to September 2022 were about 3.2 million units, down nearly 40% year-on-year, and the cumulative sales volume was about 7.6 billion yuan, down 39% year-on-year. Among them, Xiaomi ranked first with a market share of 45%, and iQOO's series of models focusing on gaming experience also ranked first. The market situation of special game mobile phone brands such as Black Shark and Red Devil is not optimistic.

Since the second half of 2022, Black Shark has tried to join hands with Tencent to transform VR to find new life, but it finally collapsed due to the termination of the acquisition. In January this year, "Black Shark was exposed to arrears of employee severance compensation" and was also on Weibo hot search.

Lenovo seems to be aware of this, too. Its last new product released in August 2022, the Savior Y70, cuts the mid-mounted architecture used to facilitate users to play games, and removes the "double fin dual fan" designed for heat dissipation, which is almost indistinguishable from any ordinary mobile phone in appearance. The price has also dropped from 4,000 or 5,000 yuan in the previous three generations to 2,970 yuan.

But in the highly competitive mobile phone market in 2022, such attempts have failed to make a splash. Shipments of the Rescuer mobile phone are still declining. According to Zhang Qing, the rescuer mobile phone has been launched in four generations, and the sales of the first generation of the rescuer Pro can still exceed 100,000 units, but by the fourth generation Y70 sales are only more than 20,000 units.

At this time, Lenovo's performance went into a trough. Financial report data shows that in the third quarter of 2022, Lenovo's revenue was US$15.267 billion, down 24% year-on-year; Quarterly net income of $437 million also declined 32%. Quarterly performance revenue and net profit both declined.

At the earnings meeting, Yang Yuanqing, chairman and CEO of Lenovo Group, stressed that the company believes that the smart device market is now in the worst period and will need to adjust the workforce to cut some business expenses, while hiring employees in high-growth businesses such as services.

Under this circumstance, the indisputable rescuer mobile phone naturally becomes Lenovo's first goal to reduce costs and increase efficiency.

Self-operated mobile phones collapsed

As a veteran manufacturer that first entered the mobile phone market through the acquisition of Xiahua mobile phone in 2002, Lenovo has also reached the top of the mobile phone market.

Since 2011, Lenovo has made low-cost mobile phones through deep binding operator channels, and launched a large number of "machine sea tactics", launching more than 40 smartphones a year at most. This move allows Lenovo mobile phones to quickly surpass other competitors. "China Cool Link" has thus become the memory slogan of the generation at that time for the pattern of China's mobile phone market, which is the most brilliant moment in the history of Lenovo's mobile phone business.

However, with the inclusion of the telecom industry in the scope of the pilot VAT reform in 2014, operators' subsidies for mobile terminals declined, and the customized machine business shrank significantly, which in turn brought a huge impact to Lenovo mobile phones that rely on operators' services. Since then, Lenovo's mobile phone business has plummeted.

Lenovo has tried several times to save the mobile phone business. In the past ten years, Lenovo's mobile phone business has successively changed many responsible persons, from Liu Jun at the beginning, to Chen Xudong, Qiao Jian, Chang Cheng, and now Chen Jin. Every change means a reformulation of strategy and a drastic adjustment of the product line.

According to incomplete statistics, in the era of smartphones alone, Lenovo has successively launched nearly 10 brand series such as Le Phone, VIBE, Lemon, and ZUK, but none of them have survived for a long time. As long as the sales performance is slightly less than expected, it will be cut across the board like the rescuer series of mobile phones. Then there is a new leader, and everything is torn down and restarted. Paying too much attention to market performance, rather than product continuation and word-of-mouth accumulation, is also considered to be the key to Lenovo's fall from the altar.

Lenovo's last-ditch attempt to save the mobile phone business now seems a little weak. At the beginning of 2020, at the beginning of his tenure as the general manager of Lenovo's mobile phone business department in China, Chen Jin announced that Lenovo would maintain the dual-brand strategy of Lenovo and Motorola, in which mid-to-high-end 5G products are mainly Moto, high-performance and game series will be covered by Lenovo Savior, and entry-level markets such as Lemon.

But three years have passed, the resurrected Lemon still has not made a sound, except for the Lemon K12Pro launched in 2020, there is no news, along with the savior's fold, Lenovo's only acquisition of Motorola is still continuing, self-developed mobile phone business has failed.