Qualcomm is too expensive, Li Nan suggested that Huawei open Kirin: but why doesn't Huawei do it?

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2024-05-10 20:38Published in Guangdong science and technology creators

Text/Wang Xinxi

The sales momentum of the Huawei PURA70 is not as good as that of the Mate 60. A few days ago, Li Nan, former vice president of Meizu, commented on this mobile phone, thinking that the popularity of this mobile phone is not high, and expects Huawei to work hard to make Mate60+P70 be able to rush to more than 3000-45 million sales, then Kirin 9000S+9010 high-end chip sales will be close to Qualcomm 8 series! At the same time, Huawei was advised to open up mobile phone chips, saying that domestic mobile phone brands were overwhelmed by Qualcomm's $140-160 robbery price.

Qualcomm is too expensive, Li Nan suggested that Huawei open Kirin: but why doesn't Huawei do it?

As the former vice president of Meizu, Li Nan is very familiar with the situation of the mobile phone industry, but Li Nan's suggestion is actually a bit unrealistic.

Let go of the Kirin chip, will friends use it? There are multiple issues behind this.

First of all, the production capacity is not enough

In fact, whether it is the Mate 60 or the Pura 70, Huawei is currently limited by production capacity and cannot ensure continuous large-scale shipments.

In fact, many years ago, Huawei executives once said: Kirin processor is a technology, not a business, and will not be sold to competitors! The first reason behind this is the production capacity of Kirin chips, whether it is Huawei's high-end flagship Mate series and P series, Huawei's flagship chips will be used. Huawei itself needs such a large amount, and even said that its own products may have to queue up, and some of its low-end machines also use Qualcomm and MediaTek chips.

In the case of their own insufficiency, the real capacity dilemma is difficult to do for friends and commercials, because the production capacity is not much, the supply exceeds demand, and the total cost of a single chip after counting the R&D cost is relatively high. The price will not be cheaper than Qualcomm and Dimensity chips.

Open Kirin chips, the problem of pricing, Huawei and friends are a lose-lose

This leads to multiple problems. First of all, Huawei's Kirin chip may not be able to beat Qualcomm chips in terms of comprehensive performance, but if you sell goods from the perspective of cost and supply and demand, the price may not be much cheaper than Qualcomm, and friends will not buy it?

Secondly, if the price is too cheap, the problem comes, the Kirin chip is the source of support for Huawei's high premium, if the price sold to friends is very cheap, then friends can sell the mobile phone equipped with the Kirin chip at a low price, so Huawei's own high-end mobile phones equipped with the Kirin chip are still sold? Therefore, this means that if the Kirin is opened, this wave of boomerang will hurt Huawei itself.

Secondly, this is not good for friends, there is a fierce hand-to-hand battle and market competition between mobile phone hardware manufacturers, if there is no choice at all, from the perspective of interests, it is difficult to choose the chip or operating system of friends. On the one hand, friends using Huawei chips are equivalent to admitting that they are inferior to Huawei, competing with Huawei, and relying on Huawei on chips, and the brand premium is suppressed by Huawei, and there is no sense of security, because they are in the camp of mobile phone manufacturers, they are in competition with each other, and they are subject to each other's chip win-win, which means that it is difficult to go to the same pricing range as Huawei, and even give up the high-end market.

In addition, their chips have to wait for Huawei's supply, due to the limited production capacity of Huawei, which means that their new product release rhythm depends on the supply rhythm of Kirin chips, without Kirin chips, their new products can only wait, and the release rhythm and shipment scale are completely subject to the shipping rhythm of Huawei Kirin chips.

Third, friends will also consider the survival of overseas markets

There is also a consideration for overseas markets. Domestic mobile phone manufacturers Xiaomi OV have a broad overseas market layout, they have to consider the factors at the level of sanctions, choose Qualcomm, one is Qualcomm can provide a full range of solutions from processor to baseband without dead ends, the second is that Qualcomm can be in the global market, especially the European market, unimpeded, equipped with Kirin chips, which means that they want to give up overseas markets, because with Kirin chips, Qualcomm is bypassed, and they may face trouble in overseas markets.

So for friends, if Huawei really opens up Kirin, under the competitive strategy, friends are more likely to be AB supplier strategies, selling overseas with Qualcomm, domestic market with Kirin, and mobile phones in the domestic market are more likely to use Kirin for low-end mobile phones and Qualcomm for high-end mobile phones.

But for Huawei, Kirin can raise the premium due to its self-developed attributes, but for friends and businessmen, it cannot, therefore, after opening, this will essentially hit the premium of Huawei's Kirin chip.

The reason why Huawei does not open chips is similar to Apple's lack of openness

In fact, we know that the current Huawei mobile phone, in fact, is more and more similar to Apple, with its own chip + operating system, at the same time, the operating system and chip have achieved integrated closed-loop and synchronization, for example, Huawei Mate 60 series is equipped with Kirin 9000S, Kirin 9100 high-end processor + HarmonyOS 4.0, Huawei PURA70 is Kirin 9010 and Kirin 9000s processor + Harmony, Kirin + HarmonyOS mode, just like the A series processor of Apple mobile phone + iOS, This is a unique competitive advantage of software and hardware integration.

Huawei and Apple, in the field of mobile phones, are both hardware and software integrated companies, such as Apple's A series chips and iOS operating system close co-design, this close collaboration makes hardware and software work better together to achieve efficient performance and seamless user experience. This is reflected in powerful graphics performance, high-performance CPU cores, (AI) engines: advanced photography and video processing, fast storage and memory performance, and more.

In fact, the optimization of the Kirin chip is the same as the iteration of the HarmonyOS is a collaborative integrated design, open Kirin, the Kirin chip is used in the operating system of a friend, it may not be able to achieve the effect of Huawei on the HarmonyOS system, and the experience level will also be discounted, thus affecting the word-of-mouth effect of the Kirin chip, and this integrated software and hardware design is actually a software and hardware collaboration model, why Apple does not open its own A series chip, in fact, the reason why Huawei does not open the Kirin chip.

In fact, many years ago, Meizu asked Huawei for chips, but Huawei politely refused. The reason is that it was caused by the lawsuit with Qualcomm and Qualcomm's ban on the sale of Meizu chips. Even after ZTE suffered a turmoil, Huawei did not let go of the Kirin chip to be sold, which is enough to see how important this chip is to Huawei. Of course, even if the production capacity is increased in the future and can be fully supplied, it may be difficult for Huawei to sell to the outside world.

For the above reasons, Huawei needs to take into account the supply of Kirin chip production capacity, as well as the lose-lose problem caused by the pricing of competitors, the problem of Kirin's positioning and premium being affected by the adaptation of friends to the middle and low-end, as well as the collaborative integration experience of chips and systems, the survival of friends in overseas markets, etc., and the various complex problems caused by the opening of Kirin determine that Huawei is unlikely to open up Kirin chips.

Author: Wang Xinxi, Senior Reviewer of TMT This article is not reproduced without permission

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