Lei Jun, who has his own traffic, has become popular again in building cars. This year's goal of 100,000 vehicles is really envious and hateful to many car companies. Whether others call him Rebus or Reske, I think Xiaomi is a serious company in making products and services, although sometimes I think that millet grassroots things are still very strong, such as introducing a water cup 15 times will make me puzzling. In addition, I really can't see the difference between Xiaomi phones and other Android phones? Just as liquor only has Moutai and other liquors, the mobile phone industry only has iPhones and other Android phones. Just today Apple released the report for the second quarter of fiscal year 2024, you can compare the data to see where the difference between Xiaomi and Apple is, and how big is it?
Xiaomi's high-end road is still very long,Differentiation is not something you can do if you want to,But I was pleasantly surprised to see that Xiaomi is already doing some of its own things,For example, finally following Huawei's footsteps to make a surging system,The whole ecology of people, cars, and homes is the first thing in the industry to appear in people's field of vision,Although in the end, it was found that Xiaomi is far behind by comparing Apple,But,There is no doubt that Xiaomi is on the right path,As long as the direction is right,It can also succeed sooner or later。 If Lei Jun really wants to benchmark Apple, it is definitely not a simple comparison of mobile phone performance. High performance and cost performance are not the key to the problem, differentiation is the core of the problem. Why are Apple users so sticky? Why can Apple's services business maintain rapid growth for 5 consecutive quarters? What exactly is the difference between Apple and other manufacturers? That's the problem and the core.
01
COMPARE
A comparison of Xiaomi's full-year financial data and Apple's single-quarter financial data
Xiaomi's overall revenue in 2023 will be 271 billion yuan, including 157.5 billion yuan in mobile phone business revenue, 80.1 billion yuan in IoT and living consumption, 30.1 billion yuan in Internet service business, 44.9% of overseas revenue, 145 million mobile phone shipments, 739 million IoT connected devices, and 641 million monthly active users. Let's compare and look at Apple's 2024 Q1 data comparison, there is really no harm without comparison. (The exchange rate of RMB against the US dollar is calculated at 7.2:1)
Apple's Q1 revenue was 653.4 billion ($90.75 billion), of which 330.9 billion ($45.96 billion) was generated by the mobile phone business, and other Macs, iPads and other wearable home and accessories I calculated together was about 150.6 billion ($20.92 billion), and service revenue was 171.7 billion ($23.86 billion) Seeing this data, I was still quite surprised, I knew that the gap between Xiaomi and Apple was huge, but I didn't expect it to be so big. You must know that this is only Apple's data for one quarter, no wonder it is said that Apple is the Moutai in the mobile phone, it is really true, Apple's revenue in a quarter is 2.4 times that of Xiaomi in a year, and the mobile phone is 2.1 times that of Xiaomi in a quarter. If the revenue is calculated according to the average of a year, it is 9.6 times, close to 10 times. Is this the confidence that Apple can say that if you don't build a car, you won't build a car? Because there is no differentiation, the end result is just that. No wonder Duan Yongping will say that he understands Apple, you must know that he is a person who has an office in OV, his understanding of mobile phones should be better than most people, and there is a reason why he will be heavy on Apple.
When many people say that the sales of Apple's mobile phones have declined again, Apple's mobile phones can't sell again, and we are far ahead, I don't know if they will still stick to their ideas when they see this data. After reading the revenue, look at the profit, Apple's operating profit is 27.9 billion US dollars, and the net profit is 170.1 billion (23.63 billion US dollars), compared with Xiaomi's net profit of 19.2 billion (adjusted annual net profit measured by non-international standards) Apple's profit in a quarter is 8.8 times that of Xiaomi in a year, and if it is calculated according to the average of a year, it is a full 35 times. No wonder Lei Jun wants to press all his own to build a car, and the mobile phone Xiaomi may never be able to climb the mountain of Apple. The gap is really outrageous.
02
DIFFERENT
What is the difference between the services of Apple and Xiaomi
Why is Apple's data so powerful? If you look at the market share, Xiaomi is also the third in the world, why is the actual result so bad? Why can Apple monopolize 85% of the world's profits? Why can't so many mobile phone manufacturers beat Apple, and what is the secret?
There are too many answers to these questions online, but it seems to me that many of them miss the essence of the questions, and even many of them are wrong. For example, some people say that Apple's mobile phone is powerful because it is the first smartphone to make a subversion of the world, and it is the only hegemon in the world's mobile phone industry, and Apple has a huge brand premium. This is a completely wrong reason, it makes the theoretical mistake of chicken or egg, Apple does not have a huge brand premium because it is the most profitable mobile phone brand, but because it is the best mobile phone. The competition between other products in the mobile phone market except Apple is extremely fierce, it can be said that it is a bayonet fight, it is not easy to survive, Apple's brand premium, not because it is the inventor of the first smart phone. It's because it has something that others don't have.
In addition, there is a point of view that it is because of the strength of Apple's industrial chain, this reason is even more nonsense in my opinion, in fact, the entire mobile phone supply chain is in China, and many of Apple's supply chain are also making Android machines. In terms of performance, Apple's performance is definitely not the best one. At least many people like to benchmark Apple, but the performance of the mobile phone that crushes Apple still can't make so much profit from Apple.
Recently, I saw an analysis that said that it was because of Apple's large shipments that reduced the cost of hardware, and at the same time R&D was diluted and increased profits, I have to say that these reasons seem to have some truth on the surface, but after careful analysis, you will find that the actual situation is not the case, other competitors also have huge output, and they can also dilute costs, and they also have strong bargaining power (such as Xiaomi), but why only Apple can take 85% of the profits of the whole market in such a competitive market, because it has its own unique things, There is a strong moat of its own, and there are things that others do not have.
I think the real reason Apple is strong is because of its differentiation. Its user experience is something that other mobile phone manufacturers can't give. The mobile phone ecosystem built through its independent iOS system is Apple's real killer feature. The reason why people are willing to spend more money to buy Apple phones with performance that is not as good as other companies is because they can't do without the ecosystem that Apple gives, because others can't give them Apple's services and user experience. It takes differentiation to the extreme, and it has things that others don't and won't. It's not that you have a different system, you have built a complete closed-loop ecosystem, you have differentiation, we should pay more attention to what is in your ecosystem. Apple's cloud computing, music, streaming video, payment, advertising, etc., in addition to Apple's app store in other third-party applicationsAPP also to pay Apple, users download paid applications, Apple will also take a cut, which is full of money-making places, in addition, Apple has strengthened its ecosystem by constantly introducing new technologies and new applications, successfully attracting a large number of users, and maintaining high user loyalty, this user stickiness should be one of the best in the mobile phone industry. This explains why Apple's service revenue has grown for five consecutive quarters and will continue to grow in the future.
03
DATA
User retention and paid user data for Xiaomi and Apple
Recently, Duan Yongping issued an article saying that we should focus on the number of apples, rather than just focusing on the temporary sales volume and market share. I have a deep understanding of this,The number of devices should be a more important indicator than the market share,Xiaomi's mobile phone monthly active data should be the number of shares,How much is it641 million (the mainland monthly active is only a pitiful 155 million)。 But how many apples are there? In Q1 2024 (Q4 2023), the post-earnings conference call said that there were more than 2.2 billion active devices (estimated iPhone ownership is about 1.5 billion). Looking at it this way, Apple's ownership is about 2.5 times that of Xiaomi, but what Apple is really powerful about is the number of subscribers to the paid business generated based on this ownership, how many are there? More than 1 billion. Compared to Xiaomi, the number of paid users may be even smaller (the number of paying users is not disclosed in the annual report), I guess it is negligible. The main reason for this phenomenon is that the services provided by Apple and Xiaomi are different. Especially when it comes to paid content, Xiaomi mainly relies on third-party cooperation to operate.
04
COMPARE
And Apple's app is worse than Xiaomi
Many of Apple's app services in our country are closed. So you may not be able to fully feel the power of Apple. Let's take a look at a few differentiated applications.
App store/Apple store should not be introduced, corresponding to the Xiaomi store and app store in the Xiaomi system. This should mean that the more apps you use, the more money you make (ads and shares). So there shouldn't be a lot of differentiation between the two parts.
From the content point of view, Apple Entertainment has done a very good job, Apple music+ Garageband, not to mention other apps, Apple music, there is no comparison in China. Whether it's Tencent Music or NetEase Cloud Music, it's a little worse than Apple Music,First of all, it's massive data,It has more than 10 million songs,In addition, it can recommend personalized songs according to the user's listening habits,Lossless sound quality brings an immersive experience,In addition, it can be synchronized in all Apple devices。 Xiaomi's choice to cooperate with Tencent to make music is not the right choice in itself, because the products of the two companies cannot be perfectly integrated, although this is already Xiaomi's best choice. But compared with Apple, it is undoubtedly a cut off. In addition, Apple offers a GarageBand app that turns your iPad and iPhone into a set of touch instruments and a full-featured recording studio, so you can create music wherever you are, something unique to Apple, and while it may be niche, it's a perfect differentiator.
Apple Podcasts is Apple's built-in app. Podcasts provide audio stories that entertain, inform, and motivate. Explore your favorite shows, from entertainment and comedy to news and sports. This is similar to the Himalayan app, I often listen to this before going to bed, and the content in it is also very good. This piece of Xiaomi chose to cooperate with Dragonfly FM and packaged its application into Xiaomi's ecosystem, but like music, it can only be said that it also has it, but it can't be compared with Apple.
Apple Health,Cooperate with the watch app to record all aspects of your physical condition,This app Xiaomi's sports health is also doing well,At least this piece of Xiaomi is doing it yourself,Like。
Apple video+TV,It's a pity that this app can't be used in China,apple can buy a lot of video content through iTunes,Very powerful,It is precisely because Apple has canceled this piece for domestic users,So our Tencent video and iQiyi B station can live well,Although we don't use this app,But I still learned from foreign colleagues that this app is also very powerful,Xiaomi video is relatively simple and rude,Put iQiyi,Mango, Huashi and Migu and other video content are integrated together to sell members, what I'm more curious about is how much of the user fee called by such a paying user ends up in Xiaomi's pocket?
Apple translates this app Xiaomi actually has, and Xiaomi actually does a good job, but sometimes the accuracy is not high enough, I believe that in time Xiaomi will do better, like it.
Apple stock market, this app is my favorite app, Apple's app can see most of the world's markets and individual stocks, whether it is U.S. stocks, Hong Kong stocks, or my big A shares, and even European and Japanese stocks, you can find, this is the most comprehensive stock market software I have ever used, can Xiaomi also make one in the future?
In addition, there is Apple Pay, iCloud, Maps, Notes, Compass, Rangefinder, Notes, Voice Memos, Safari, and by the way, the famous Siri... There's so much new stuff waiting to be explored, which is why people who are used to Apple don't want to change their phones again. To sum it up, Apple's application ecology can already cover all the applications we usually use, but the key is that Apple does a very good job in every application, so it has strong user stickiness, and people pay for paid services, although it is already as strong as Apple, but it is still making continuous progress, constantly introducing better applications to broaden and consolidate its moat, such as GarageBand, a niche application, it may be impossible for others to do such a niche thing, but Apple will, As long as it can increase its own differences, Apple will strive to do a good job, this is the strength of Apple, and Apple will become the only Apple. Now Xiaomi also has a lot of applications that imitate Apple,Some of them are doing well,But the overall gap with Apple is still huge,This gap is definitely not something that can be made up by improving the performance of the hardware,This is the core of the problem,I hope that the next time Xiaomi Jinfan gives a speech, you can compare this piece one by one,Maybe then I will feel that Xiaomi is really powerful。
05
FINAL
Write at the end
I don't know if I think it's too much.,In fact, you can also talk about Apple's differentiation in detail.,Today it's about a fur.,If you have the opportunity to talk about it in detail in the future.。 To conclude here, Xiaomi's Internet services mainly rely on platform sharing of advertising and games or other third-party application businesses, so its growth is very slow, with only 6% growth in 2023. The success of Apple's mobile phone service business is built on its strong system platform and ecology, in addition to advertising and third-party application platform business sharing, Apple's most powerful point is that it has a huge paid business group, through Apple Music, Apple video These applications continue to improve user stickiness, increasing user increment, today's Apple has the world's largest paid user group, looking at the world, there is no opponent who can challenge this, Samsung is not good, Huawei is not good, Other Xiaomi OVs in China are even worse. I have a negative view about whether other manufacturers can break Apple's moat in the future. Personally, I don't think there will be a real rival for Apple in a decade or even longer.
Just like if you find Moutai in the study of liquor, you don't want to study other companies, and after you find Apple in the research of mobile phones, you don't want to study other companies. Investment is comparison, when you study a certain industry or company, you find a better one, which has a very big impact on you, but it's a pity that Apple is only listed in the United States, and most of us can't buy it, otherwise I will definitely be like Duan Yongping to put a heavy hand, at least 1/6 of the assets in Apple. Maybe in the future we will have this opportunity to buy Apple.
However, I do see Xiaomi's progress, especially the Xiaomi surging system of the whole ecology of people, cars and homes, and it can be said that Xiaomi is on the right path. I believe that as time goes by, Xiaomi's system will become more and more perfect, and the user stickiness will become higher and higher. In addition, Xiaomi's lack of content construction can only present the best content to its users through cooperation with third-party large enterprises. As far as the current status quo is concerned, it can only be said that there is no difference in Xiaomi, if there is an opportunity for Xiaomi to independently make content-rich applications in the future, I believe that Xiaomi will be more powerful, and I believe that Xiaomi can do better.
Although the current Xiaomi and Apple are far behind, I believe that Xiaomi will work hard to make up for the shortcomings in the future and do better in differentiation. AI may be a better opportunity,I hope Xiaomi can seize this opportunity,Apple's developer conference in June this yearApple will announce the progress of AI,Although AI is lagging behind Apple,But I believe Apple will catch up later。 As Mr. Lei said, his main work now is three parts, automobiles, surging systems and AI. I think the most important thing for Xiaomi should be the whole ecosystem of people, cars, and homes,This is the most important part,Optimize internal applications,If you really want to benchmark Apple, I think you should benchmark from here。 How to improve Xiaomi's user stickiness and increase the number and retention of Xiaomi's users, I think Apple has all the answers here.