Want to get back to the first tier of mobile? Coolpad has to cure its "disease of wealth" first

Author/Du Zhiqiang, Editor/Zhong Yi

After ten months, Coolpad updated its product line again, releasing three new machines COOL30, Fengshang 40 and Daguan 40s, positioning 1,000 yuan entry 5G mobile phones. Among them, Coolpad Daguan 40s has been launched on the official mall, with a starting price of 1399 yuan.

From the original domestic market "one brother" to the later "others". Coolpad has had its own glorious times, but also experienced moments of isolation. In 2020, when Coolpad returned, he set the strong saying of "returning to the first echelon of domestic mobile phones in three years".

Two years later, Coolpad has not seen improvement in the mobile phone market. The decline of the global mobile phone industry has added a blockage to the Coolpad in its first year.

Starter configuration, sell mid-range price

Unlike Realme, which released new products together on the same day, Coolpad's new product release is very low-key, and there is not even a public brand activity, but a photo of the new product was posted on the official social platform, and the configuration price was not available. There are many fan messages in the comment area, but Coolpad officials have not made more promotional actions about the new machine.

Coolpad Grand View 40s

At present, one of the three new products, Daguan 40S, has been launched on the official website. Judging from the parameter information disclosed on the official website, compared with mainstream products on the market, the overall configuration of the Coolpad Daguan 40s is lower, positioning an entry-level 5G mobile phone.

Specifically, the Coolpad Daguan 40s is equipped with a 6.52-inch LCD water drop screen, with a resolution of only 720P, a body thickness of 8.48mm, a weight of 180 grams, and support side fingerprint recognition. In terms of performance, the Coolpad Grand View 40S is equipped with a Dimensity 700 octa-core processor, a 5 million pixel camera on the front, and a dual camera with 13 million + 2 million pixels on the rear. Equipped with a 4500mAh battery, support 18W fast charging.

720P resolution, Dimensity 700 processor, this does not seem to belong to the configuration of 2023, but the pricing is still very "confident". Among them, 4+128GB costs 1399 yuan, 6+128GB costs 1699 yuan, and 8+256GB costs 2099 yuan.

For comparison, the same 8+256GB version, the realme GT Neo5 SE released on the same day and the recently released Redmi Note 12 Turbo are priced at 1999 yuan. These two products are equipped with the newly released second-generation Snapdragon 7+ processor, AnTuTu running score of more than one million, photography, screen, battery and other hardware, are also ahead of Coolpad Daguan 40s a lot.

Not only that, the COOL 20s released a year ago is also equipped with a Dimensity 700 processor, with higher screen resolution, stronger image performance, but lower pricing, 4+128GB priced at 999 yuan, 6+128GB priced at 1199 yuan, and 8+128GB priced at 1399 yuan.

It is understood that the Coolpad Daguan 40s will be sold as an operator customized machine, and there will be subsidies in the future, but this price does not have the so-called cost performance. The other two cool 30 and Fengshang 40 new machines have not yet been put on the shelves, and the network is equipped with a MediaTek Helio G85 processor, and the price is also about 1,000 yuan.

Source: Coolpad Weibo

To borrow a comment from a netizen, summarize the new product released by Coolpad this time, "It used to be cheap and easy to use, but now I have the disease of wealth."

30 years after its establishment, it has been reduced from the first domestic product to others

Thirty years in Hedong, thirty years in Hexi, Coolpad used its own development history to interpret the meaning of this sentence very aptly. Compared with today's downfall, Coolpad also has its own glorious years.

30 years ago, Coolpad was officially established, from pagers to functional machines to early smart machines, has always been the representative of domestic brands. Whether in terms of sales volume or technological innovation, Coolpad is at the forefront of the domestic market.

Especially in the era of smart phones, Coolpad took the lead in layout, and the hot sales of mobile phone products doubled its performance. Recalling that time ten years ago, Coolpad and ZTE, Huawei and Lenovo were known as "China Coollink", dominating the domestic mobile phone market, and once surpassed Samsung to become the top 1 in the domestic mobile phone market.

However, success is also Xiaohe, defeat is also Xiaohe, and the rise and fall of Coolpad are all involved with operators. Unlike today's mobile phone brands that rely on self-built online and offline channels to ship, operators are the most important shipping channels for many brands in the early stage of smart phone development. According to data released by Coolpad in 2012, 95% of its mobile phones are customized by operators, and the cooperation with China Telecom and China Unicom has also made its revenue maintain a high growth rate year after year.

It's just that there is no eternal "backer". After the era of operator subsidies passed, Coolpad also began to decline, domestic sales fell out of the top five, becoming a member of the others in the ranking, and product competitiveness is difficult to compare with brands such as Xiaomi. In the later period, Coolpad also made changes and launched the "Dashen" Internet brand, hoping to regain lost users and markets with cost performance, but the effect was not significant. After that, the "holding hands" with LeEco became a pain that Coolpad did not want to mention.

It is worth noting that before LeEco, Coolpad "partnered" with 360 to establish Qiku Technology. But just when the new product was about to be released, an embarrassing thing happened to 360, LeEco invested 2.7 billion Hong Kong dollars in Coolpad Group, becoming the second largest shareholder of Coolpad, and then invested 1.047 billion Hong Kong dollars again to become a single controlling shareholder.

At that time, LeEco was in the "ecological anti" stage, and investing in Coolpad would further enhance its influence in the terminal. For Coolpad, "holding hands" with 360 and LeEco will improve channel and product capabilities. It's just that Cool's idea is very beautiful, but 360 is not happy, and the "secret war" between the two in the later period also became the focus of heated discussions at that time, and finally ended this "farce" with 360 gaining control of Cool, and Coolpad also bet its hopes on LeEco.

Unlike the luck of the carrier era, Coolpad bet on the wrong treasure. LeEco's so-called ecology gradually drifted away, there were also problems with funds, Jia Yueting left the United States, Coolpad was also seriously affected, the remaining mess can only clean up by itself, once through land sales and patent litigation to make a living, until 2019 was taken over by Chen Jiajun, the second son of Kingkey Group founder Chen Hua, Coolpad can be regarded as "reborn".

Return of the King? It's hard for Coolpad to return to the first echelon

After the "rebirth", Coolpad did not give up the obsession of returning to the mobile phone market. Chen Jiajun even made a bold statement, saying that "the goal is to return to the first echelon of domestic mobile phones in the next three years."

In fact, from the point of view of the time point of Coolpad's return, it is indeed a good opportunity. In 2019, China officially entered the era of 5G commercialization, and if Coolpad can seize this wave of replacement, it will most likely replicate the success of the original 3G era. Judging from a series of actions after the return, Coolpad is indeed serious.

In terms of funding, since 2020, Coolpad has raised more than HK$2.1 billion in the capital market. In terms of personnel structure, Coolpad appointed Qin Tao as senior vice president of Coolpad Group, and Hu Xing, Li Yujing and Sima Yunrui as vice presidents of Coolpad Group, all of whom have worked in Xiaomi, and Coolpad hopes to copy Xiaomi's successful experience.

In May 2021, Coolpad released its first product after its return, COOL 20, with a glass body and a starting price of 699 yuan. Compared with mobile phones of the same price, COOL 20 provides a longer warranty, raises the standard in service, and differentiates competition.

In the same year, Coolpad also released COOL 20 Pro, which has stronger performance, but it is only equipped with the Dimensity 900 processor, and the starting price has come to 1799 yuan. In 2022, Coolpad will launch COOL 20s, which will still focus on the 1,000-yuan entry-level 5G market.

From a product point of view alone, with three products in two years, Coolpad did not achieve the "rebirth from the ashes, return of the king" that was originally shouted. A dealer told us that the one who bought Coolpad was more of the one with the lowest price, used as a spare machine, and did not care much about parameters for a few hundred yuan.

Some fans said that Coolpad has just returned, and will not launch high-end mobile phones in a short time, and will use low-end mobile phones to gain a foothold in the early stage. This fan's words are correct, but Coolpad lacks a bit of sincerity in product pricing. In the past year, the decline of the global mobile phone industry has intensified the pressure on Coolpad.

Source: Coolpad announcement

In 2022, Coolpad's revenue will be HK $208 million, down 68.79% year-on-year, and a loss of HK $625 million, an increase of 9.27% year-on-year. Compared with the gross profit of HK $36.3 million and the gross profit margin of 5.46 in 2021, Coolpad's gross profit turned from profit to loss in 2022, with a loss of HK $144 million, and the overall gross loss rate was 69.52%.

For the decline in revenue and the loss of gross profit, Coolpad attributed it to the downturn in the domestic market and fierce market competition, and the sales of new products launched last year did not meet expectations. This, combined with more aggressive sales incentives, resulted in revenue below cost of sales.

Coolpad said in its annual report that "the Group adopts a cost-effective pricing strategy and continues to focus on cost-effective models in its product portfolio to meet the core needs of consumers". However, from the sales point of view, consumers do not recognize the cost performance that Coolpad believes, and the words "high price and low configuration" also appear in the Weibo comment area.

As early as the period of holding hands with LeEco, Coolpad shouted the slogan of returning to the first place in the industry within five years. This time back, Coolpad relieved himself of pressure and aimed to return to the first echelon. This year marks the third and final year of Coolpad's return to the domestic market, but its return to the first echelon is still far away.

An industry analyst told Titanium Media App that Coolpad wants to take the low-end cost-effective route, but it has to consider profitability and can't let go at all. Without the competitiveness of core products, the channel advantages of the operator era, and the brand power is not as good as mainstream players such as Xiaomi and Huawei, it is difficult to achieve a breakthrough.

In the financial report, Coolpad pointed out that this year will strive to convert nearly two years of investment into valuable output as much as possible, reduce losses, and strive to turn losses into profits as soon as possible. In Coolpad's planning, profitability is still a very important thing at the moment, and it is not difficult to understand its pricing strategy.

Coolpad related people revealed to us that "there will be new products on the market later". At present, there is not much time left in the three-year period, and if Coolpad still has the vision of returning to the first echelon, it must first cure its "wealth disease".