Per reporter: Yang Hui Per editor: Liang Qi
Samsung's ODM order, which has been circulating for half a month, was finally revealed. On the evening of April 6, Wingtech Technology (SH600745, stock price 58.99 yuan, market value 73.3 billion yuan) announced on its official website that the company won the ODM order for Samsung's mobile phone and tablet products in 2023.
According to previous media reports, the above orders have a total of 25 million mobile phones and 20 million tablets. In this regard, Wingtech Technology replied to the "Daily Economic News" reporter on the morning of April 7: "Do not respond to market rumors. ”
In recent years, Samsung's consumer electronics products have gradually faded out of the Chinese market, until they have recently returned. Compared with the fruit chain and Huawei chain, the overall development stability and scale of the domestic Samsung supply chain are much weaker, and the influence is not as good as before. In the view of Chen Jia, an independent international strategy researcher, Wingtech Technology's large order can be seen as a revision of Samsung's supply chain strategy towards China.
However, in the context of years of sharp cuts to domestic suppliers, if Samsung wants to rebuild its supply chain network that can support China's first market share, it will have to compete with other Chinese mobile phone manufacturers while building a supply chain through ODM. Under the attack of the four major brands of fruit chain, Huawei chain and domestic brands, this road of return may face many challenges.
Samsung order contains 45 million products? Wingtech Technology: Do not respond to market rumors
Under the cold winter of consumer electronics, OEM orders from large manufacturers are rare and precious. At this time, Wingtech Technology, which received a large order from Samsung, naturally became the focus of attention.
It started with a symposium.
According to the news released by Wingtech Technology on the official website on the evening of April 6, the day before yesterday (April 5), the vice president of Samsung purchasing department, the vice president of Samsung high-end machine research and development and others went to Wingtech Communications Shanghai R & D center to inspect and discuss exchanges. At the meeting, the two parties signed a new project research and development agreement of Samsung, and Wingtech Technology won the ODM order for Samsung's mobile phone and tablet products in 2023, and announced that it will continue to work with Samsung in the research and development and manufacturing of mobile phone and tablet products.
As for the number and type of orders, Wingtech Technology did not disclose this.
Wingtech Technology, which once generously announced that it won Samsung's "Annual ODM Best Quality Award", why did it "hide" the details of this order? The industry believes that this may be related to the number of orders.
As early as March this year, there were rumors in the industry about the above order. According to media reports at that time, the total number of Samsung ODM products obtained by Wingtech Technology was 45 million, which is expected to be delivered in the second half of 2023; The order includes two items, one for 25 million mobile phone ODM products and the other for 20 million tablet ODM products.
On April 7, the reporter of "Daily Economic News" contacted the person in charge of Wingtech Technology media by email, WeChat and other forms. The other party said that there is no other news to disclose about the Samsung order.
When talking about whether the previous media's statement on the number of orders was accurate, the head of Wingtech Technology Media replied to the "Daily Economic News" reporter: "I do not respond to market rumors." When the reporter asked whether the number of orders must be disclosed, the other party said that it was not clear why the announcement was not required, but "I believe that we (the company) must not have violated the relevant regulations of the exchange."
As one of the "Big Three" of global smartphone ODM, Wingtech Technology really needs this order. As the demand for some consumer electronics products has fallen to freezing point, it is becoming more and more difficult to do OEM business that lacks the right to speak and works for large factories. According to the 2021 annual report of Wingtech Technology, in that year, the company's product integration business based on mobile phone ODM achieved revenue of 38.685 billion yuan, down 7.16% year-on-year.
Competitors are not having a good time. Not only Wingtech Technology seeks transformation, among the "three giants" of smartphone ODM, Huaqin Technology Co., Ltd. (hereinafter referred to as Huaqin Technology) and Shanghai Longqi Technology Co., Ltd. (hereinafter referred to as Longqi Technology) are trying to develop markets other than smartphone manufacturers.
After sniping Nokia and Apple to become the world's first, the influence of the "Samsung chain" in China has been greatly reduced
From a broader perspective, ODM is only part of the industry chain of mobile phone manufacturers.
Mobile phone brands represented by iPhone and Huawei created the era of smart phones, and in their heyday, they single-handedly "ze quilt" upstream and downstream, and "fruit chain" and "Huawei chain" were born.
However, in the evolution from 4G to 5G, smartphones have not been able to find more butterfly space, coupled with factors such as the epidemic and weak demand, inventory is enough for manufacturers to take care of themselves, and enterprises on the "chain" can only find another way.
However, even so, the influence of the "mobile phone manufacturer chain" still exists. Taking "fruit chain" as an example, since the beginning of this year, as soon as the news of Apple's order reduction came out, the stock prices of concept stocks such as Luxshare Precision (SZ002475, stock price 31.10 yuan, market value 221.755 billion yuan) will immediately make a "response".
As for the other party of this incident, Samsung, it has rarely appeared in the sight of domestic manufacturers in recent years, and even the market is very vague about whether there is a "Samsung chain".
According to Ma Jihua, founder of Beijing Darui Management Consulting Co., Ltd., unlike Apple, Samsung itself is one of the main spare parts manufacturers of smartphones, and also provides services for other smartphone brands, which is part of the Android mobile phone ecosystem, and it is difficult to say that there is a "Samsung chain".
"Because of the openness of the Android market, companies that provide products for Samsung mobile phones often serve other brands, and the businesses of various enterprises are scattered and will not be exclusively bound by Samsung." Ma Jihua said.
However, in terms of the stability of the industrial chain alone, Chen Jia pointed out that compared with the "fruit chain" and "Huawei chain", the stability and scale of the overall development of the domestic Samsung supply chain are much weaker, especially in recent years, the US sanctions on China's chip and semiconductor industry chains, Samsung suppliers have further migrated south, making the existing domestic Samsung supply chain more weakened in terms of length and completeness.
In addition, regardless of the industrial environment, the influence of Samsung's supply chain in China does lag behind the "fruit chain" and Huawei's industrial chain. In Chen Jia's view, this is related to the change in the market share of Samsung mobile phones and smart products in China.
"From the data analysis in the past five years, whether it is product strength, marketing strategy, shipments and market maintenance, Samsung mobile phones are not as good as the four major brands in the domestic mobile phone market." Chen Jia said that Samsung spent more than ten years to achieve the first place in the global share, but in the same period, it made China's market share from the first to the end. Under the condition that China's mobile phone market remains open to the world, Samsung's contrast between internal and external performance, looking at global technology companies, is a rare case.
After all, in the early years, Samsung also had a brilliant record in the Chinese market. Although this brilliance is short-lived, it is very representative, reflecting Samsung's usual "catch-up strategy" in the first period of benchmarking the world.
For the so-called "catch-up strategy", Chen Jia summarized as follows: "It is to take product benchmarking, price sniping and supply chain guarantee as the main means. Before the emergence of the iPhone, Samsung's main strategy in the Chinese market, in addition to leading product research and development and flexible supply chain strategy, once directly benchmarked the flagship product design to the then "hegemon" Nokia, taking advantage of the price difference in the domestic mobile phone market at that time (mainly "licensed" and "parallel goods" price difference) to "snipe" Nokia's flagship, and finally shined in the domestic market on the eve of the birth of smart phones.
This strategy has also been applied many times in the later stage of catching up with Apple. Chen Jia said that after the "fall" of Nokia and the rise of Apple, Samsung once again (its own products) and Apple's flagship benchmark, its Galaxy series products with design and strong hardware quality quickly formed a comprehensive blockade of Apple. Later, Samsung also took advantage of the trend to launch the Note and Galaxy dual flagship product strategy, and finally "pulled Apple down" from the world's first sales throne.
Samsung Galaxy series flagship machine Image source: Samsung official website screenshot
According to data from market research agency Canalys, the world's largest smartphone shipments in 2022 will be Samsung, accounting for 22%; It is followed by Apple, accounting for 19%.
Returning to Samsung's supply chain in China, Chen Jia believes that Samsung has actually experienced a difficult process from gradual withdrawal to expecting a second return. Taking the "mobile phone explosion" incident as the dividing point, Samsung has gradually withdrawn from the Chinese market since 2014, and closed its core factories in China in 2020. Chen Jia told the "Daily Economic News" reporter that at that time, there were hundreds of enterprises in Samsung's domestic supply chain, and only two factories were still barely maintaining, and many old "Samsung chain" enterprises moved south to Vietnam and other countries.
Frequently "brushing faces" in front of domestic consumers, what is the chance of Samsung returning to China this time?
In Ma Jihua's view, although the sales share of Samsung mobile phones in the Chinese market is relatively low, it has not withdrawn, but is waiting for the opportunity to make a comeback. In his opinion, Samsung's hardware configuration and software design are not bad, if the general environment is improved, the brand image is repaired, there are still good prospects in the Chinese market.
Recently, Samsung has made efforts at many levels in China, and it seems that it does have a plan to re-enter the Chinese market. Chen Jia said that Wingtech Technology's large order of Samsung ODM this time reflects the revision of its supply chain strategy in China.
What's more interesting is that in addition to the release of the supply chain, Samsung has also increased publicity in front of domestic consumers in recent times.
This point, the consumer side of the feeling is more direct.
On the last "Double 11" (2022), "Daily Economic News" jointly launched consumer electronics research data in conjunction with China Mobile and Fan Club and HCR Huichen, involving issues such as Samsung's increased promotion in China. 43% of respondents said they noticed Samsung's new mobile phone products, and their innovation was also recognized by respondents. Labels such as high appearance, large screen, and good waterproof performance are more prominent in the impression of interviewees.
Image source: Screenshot of the research report
The reporter of "Daily Economic News" also noticed that many Samsung brand implants and advertisements have appeared on social platforms such as Xiaohongshu and Weibo recently; There is also implantation in popular TV series on some video platforms. From the survey data, Samsung is trying to use its folding screen mobile phone as a breakthrough to enter the Chinese market again: 45.7% of the interviewed users expressed concern about Samsung's folding screen series products; 45.5% of the surveyed users favored the S series products.
The former "king" returns to the Chinese market, what are the odds? Judging from the current feedback, the two roads of products and industries are very difficult to walk.
Consumer evaluation is the key to brand reputation. According to the aforementioned research data, when it comes to Samsung, the top three user impressions are "differential treatment of the Chinese market", "high appearance/large screen/good waterproofing" and "battery explosion".
Chen Jia bluntly said that Samsung's strategic problems in the Chinese market have continued from Note7 to this year's S23. Affected by the Note7 "battery door" incident, Samsung's flagship quality and service reputation once fell to the bottom in the domestic market.
But Samsung doesn't seem to be trying to save its image.
Chen Jia told reporters that in recent years, Samsung has launched a variety of A-series national bank mobile phones based on S series and N series flagships, which were once dubbed "smart business opportunities" by domestic senior users because of their high price and reduced performance. "A closer look at Samsung's decline in the Chinese market is mainly due to the high price and low price of its models, which is in sharp contrast to the high and low price of Samsung in the past when it was working hard in the Chinese market."
What is even more unacceptable to consumers is Samsung's differential treatment of Chinese users.
Take its new S23 series "pioneer" product released this year as an example. According to consumer feedback, foreign markets have free upgrade storage services worth 1700 yuan, and the products are upgraded from 8G+256G to 12G+512G for free. However, there is no similar service on the official website of Samsung China; And domestic "first mover" users cannot be refunded, and there are more giveaways from pre-sale users than "first movers" ...
Samsung "iron fans" also had to complain helplessly, and they changed from "pioneers" to "pioneers". In response to relevant public opinion, Samsung and Samsung China officials did not officially respond.
Consumers complain that Samsung treats Chinese users differently Image source: screenshot of social software
Seeing the decline in product reputation, what is the other way? Chen Jia bluntly said that it is very difficult for Samsung to rebuild its supply chain network that can support China's largest market share.
First of all, the world's three major smartphone ODM manufacturers (Wingtech Technology, Huaqin Technology, Longqi Technology) are all in China, and their performance has been under pressure due to the downturn in the global consumer electronics market recently. Among them, although the ODM business of Wingtech Technology is still strong, the market share of the business has fallen sharply, and recently the company has gradually shifted its focus to the field of optical modules and semiconductors, and it is difficult for Samsung to achieve a significant increase in production capacity by relying on one alone. In addition, Samsung has continued to cut orders from domestic suppliers for many years, and while building a supply chain through ODM, it also has to accept the challenges of other Chinese mobile phone manufacturers, including important strategic partners of Wingtech Technology - Xiaomi, Huawei and Lenovo.
"At present, if Samsung wants to restore its glory, it still needs the right time and place. Under the attack of 'fruit chain', 'Huawei chain' and the four major domestic brands, this road back will be very difficult. Chen Jia said.
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