Huawei bid farewell to the low-end bureau, and Xiaomi was stunned

Original debut | Golden Horn Finance

Author | Corgi's Ke

On April 15, Yu Chengdong, CEO of Huawei's Device BG, announced that Huawei's P series was officially upgraded to "Huawei Pura".

According to the information previously leaked, the Huawei Pura70 series will be divided into Pura 70, Pura 70 Pro, Pura 70 Pro+, Pura 70 Ultra, and use a triangular rear camera module, which will be released before the end of this month.

From the P8 to P10 periods, Huawei has made imaging the main feature of the P series. Now, the P-Series has been renamed the Pura Series and continues to strengthen its focus on imaging technology. Yu Chengdong said: "In 2012, we launched the Huawei P series mobile phones, and the development history of the Huawei P series is the history of the development of mobile imaging and the evolution of technological aesthetics. ”

For the entire mobile phone industry, this is not a simple release of a high-end mobile phone by Huawei, because the upcoming Huawei Pura70 series is very likely to become the first batch of mobile phones that can experience pure-blood Hongmeng, following Apple's pure-blood Hongmeng to shape a closed system, which will directly bid farewell to the history of blind stockpiling of domestic mobile phone brands in the high-end market in the past.

Xiaomi, who has been yearning for a high brand, is in danger.

Huawei has finally assembled a lineup

Since the return of the Huawei Mate 60 last year, Huawei's product rhythm has returned to normal, and with the strong launch of the Pura series, it means that Huawei has basically put together its own mobile phone lineup.

Huawei's mobile phone product line mainly includes the Enjoy series, Nova series, P series, and Mate series. Among them, the Enjoy series is entry-level, focusing on cost performance, the Nova series is mid-range, focusing on fashion design and photo function, and the P series and Mate series are high-end, focusing on young users and business users respectively, the former focuses on image and fashion, and the latter has a more business-like design. The upgrade from the P series to the Pura series may complement the last link of Huawei's product line and further enhance Huawei's competitiveness in the high-end market.

It can be said that from the bright side, Huawei's mobile phone business has completed a comprehensive recovery, and there are blockbuster products in various important tracks.

But for friends, this is not good news, the previous Huawei Mate 60 series has occupied the minds of consumers in the high-end market, establishing the prototype of "far ahead".

According to the 2024 China Smart Device Market Insight Report released by QuestMobile, in terms of the competitive landscape, the major players in China's smartphone market remain stable, and Huawei continues to lead the domestic market. Among them, the cumulative activation of Huawei Mate 60 and Mate 60 Pro devices will reach 17.33 million units in 2023.

The upcoming Pura series undoubtedly gives Huawei a "double insurance" in the high-end market. In this regard, Guo Mingchi, an analyst at Tianfeng International Securities, once issued a report saying that if the current strong demand for mobile phone inventory replenishment can continue until the first half of 2024, the Pura series shipments are expected to increase by 230% year-on-year to 13 million to 15 million units in 2024.

The shipment of 13 million to 15 million units is probably the annual shipment of the iPhone 15 series last year, which means that Huawei not only left a number of domestic friends behind, but also further threatened Apple's position, causing Apple CEO Tim Cook to come to China frequently in the past year to try to stabilize the situation.

At the same time, Huawei has made a breakthrough in promoting the localization of the industrial chain, which means that Huawei's strong performance will not be short-lived, and will not be "stuck" at a critical moment, but has long-term competitiveness. In addition to the use of Haowei sensors by Huawei, domestic listed companies such as OFILM and Huichuangda also have long-term cooperation with Huawei in the field of smart phones. Among them, Innova supplies precision connectors for Huawei smartphones, while OFILM camera modules enter the supply chain of Huawei mobile phones Mate 60 series, accounting for the vast majority of the share.

Millets can only pile up materials

The Huawei Pura series is likely to be the first batch of mobile phones that can experience pure-blooded Hongmeng, and the blessing of pure-blood Hongmeng means that Huawei has the capital to play against Apple in a real sense.

Before Huawei was "stuck", domestic mobile phone brands such as Huawei once threatened Apple's position in the high-end market, but more blindly piled up materials at the hardware level to fill the gap at the system level.

With the arrival of pure-blooded Hongmeng, it is expected to reverse this situation. This native system is developed by Huawei, which reduces the redundant code by 40% compared with the previous one, and greatly improves the smoothness of the system.

According to HarmonyOS, more than 4,000 apps have joined the HarmonyOS ecosystem. Since Huawei announced on January 18 this year that the first batch of more than 200 application vendors will accelerate the development of HarmonyOS native applications, the number of applications has grown rapidly.

In just two months, the number of applications in the HarmonyOS ecosystem has increased by 20 times to more than 4,000.

At the same time, there are many players who have developed HarmonyOS software, Internet of Things and other HarmonyOS ecosystem-related business layouts to join. According to incomplete statistics from Xingkuang data, among the domestic listed companies, these players include iSoftStone, Runhe Software, Xinhai Technology, Tuowei Information, Dongfang Zhongke, Runda Medical, Jieshun Technology, Kingsoft Office and other 19 companies.

Northeast Securities said in the research report that Hongmeng application and equipment development will leverage the 10 billion market. "In terms of application, APP needs to adapt to the HarmonyOS operating system and design the meta-service card, we expect that the migration of the application will generate a market of 20.8 billion yuan;In terms of equipment, it is expected that in the next 5 years, the open source HarmonyOS ecosystem will add 400 million terminal devices, and we assume that the OS unit price of IoT devices is 80-120 yuan, and the next five years are expected to generate 320-48 billion yuan of device operating system market. ”

In contrast, although other domestic mobile phone brands are also aware of the importance of the operating system, they have never been able to achieve complete nativeness and completely cut off from the Android system.

For example, Xiaomi launched a new operating system, Xiaomi Surging OS, in October last year, although it integrates the self-developed Vela system, which is essentially a compromise game compatible with Android AOSP, at a critical moment, it still can't jump out of the path dependence of blind hardware stacking.

As a result, it will inevitably increase the cost and supply chain pressure of the mobile phone business. Taking Xiaomi as an example, the gross profit margin from 2022 to 2023 will only be 16.99% and 21.21% respectively, less than half of Huawei's.

Although Lu Weibing, president of Xiaomi, recently made bold statements at the performance meeting, claiming that Xiaomi mobile phones will break through the price range of 6,000 yuan to 10,000 yuan in 2024, but judging from the current situation, it will be difficult to say that it will pose a sufficient threat in the high-end market after the core competitors have jumped out of the routine of blind hardware stacking.

The high-end game ushered in the finale

The biggest advantage of the iPhone and the various product lines behind it lies in the high degree of adaptation and seamless connection between the self-developed system and the hardware device.

Judging from the various signals released by Huawei, it will also follow this idea for the development and application of pure-blooded Hongmeng. As Apple and Huawei continue to increase their investment in this route, it is bound to invisibly establish the entry threshold of the high-end bureau: closed native system + top hardware level in the industry + massive APP and other related content support.

As a result, a number of domestic mobile phone brands will not be able to participate in the high-end bureau in the short term.

The pure-blooded Hongmeng came to the front of the stage itself from the blockade and suppression of the overseas market, and in the case of the shrinking overseas market, Huawei's move may intend to further stabilize the domestic market and temporarily abandon the overseas market in stages.

According to data from market research firm Counterpoint, in the third quarter of 2023, the share of HarmonyOS in China's smartphone market reached 13%, an increase of 6 percentage points from the same period last year. It's just that in the global market, HarmonyOS has a share of only 3%, while iOS and Android have a share of 16% and 81%, respectively.

On the one hand, it will take time for Huawei to recover from the chip blockade in the United States, and on the other hand, Huawei's cooperation with Google Android has stopped, which means that Huawei's mobile phone has almost become a "brick" in the hands of overseas users, and basic services and APPs cannot be used normally, which is bound to reduce the experience of using mobile phones.

In this way, Huawei and Hongmeng can only rely on the "internal circulation" system to break the situation, while friends still have a considerable part of their overseas business to maintain. According to the latest report from Canalys, a market research agency, a few days ago, in 2023, global smartphone shipments will be 1.14 billion units, with Apple and Samsung competing for the first and second respectively, followed by Xiaomi, OPPO, and Transsion.

In the fierce competition in the mobile phone market at home and abroad, the parallel line has consumed a lot of energy of mobile phone manufacturers, in the case of "reducing costs and increasing efficiency" has become the main theme of major companies, it is difficult to invest a lot of manpower and material resources in the short term to develop and promote a completely independent and closed operating system, and Android is still dominating overseas, and it is almost impossible to complete the subversion in combination with the software ecology in the short term.

Resources:

Wall Street News "Huawei P70, Sudden Heavy News!"

Lei Technology "Huawei P70 rushed to the hot search! The appearance is highly recognizable, and the new machine emperor is about to come out?"

Golden Horn Finance "Hongmeng has found a new backer"