For a somewhat dormant market, the economic data released in April this year is an effective booster.
The data shows that China's economy has achieved more than expected growth, and GDP in the first quarter has shown a clear recovery trend. According to the breakdown data of the National Bureau of Statistics, the rapid growth of some industries has particularly boosted economic growth, such as the growth rate of retail sales of communication equipment above designated size reached 13.2%, far exceeding the GDP growth rate of 5.3%.
For most ordinary people, the word "communication industry" seems a bit distant, but there is another more down-to-earth, more subdivided, and more perceptible aspect of the communication industry that can well represent the overall economy driven by the communication industry, that is, the smartphone market.
According to IDC, global smartphone shipments have grown for the third consecutive quarter, reaching nearly 290 million units, while the domestic market ushered in a 6.5% year-on-year increase in shipments in the first quarter. Both internationally and domestically, the smartphone market is embracing a recovery and bringing great confidence to the market.
Nabila Popal, an analyst at IDC, said that the smartphone market is now emerging from the turmoil of the past two years and becoming stronger and more volatile.
However, there is also a rare "constant" in this powerful and changeable industry, that is, the leading brand of domestic mobile phones.
According to the activation ranking of the domestic mobile phone market in the first quarter of 2024 released by BCI (Business Consulting Intelligence), an internationally renowned market research institution, the combination of vivo and iQOO leads the market with 11.558 million activations, occupying 16.9% of the market share, once again occupying the first place in the share of domestic mobile phone brands.
This achievement, vivo has been won for three consecutive years from 2021 to 2023.
Polarization in the recovery
The reason why the recovery of the smartphone market has brought great excitement to the industry and even the Chinese economy is that it has experienced a sustained malaise over the past few years.
How sluggish is it? To put it simply, the phrase "replacement cycle has grown from 1 and a half years to 3 years" is now outdated, with the latest data from TechInsights showing that the replacement cycle for consumers has been extended to 51 months (over 4 years).
In fact, this malaise has not completely subsided. Although it has been recovering for three consecutive quarters, 2023 is still a year of declining shipments if you look at it from an annual perspective. According to the latest data from Counterpoint, global smartphone shipments will be 1.2 billion units in 2023, the lowest level in nearly 10 years.
This data seems to conflict with the above-mentioned domestic mobile phone brands continue to recover and win the championship, but there is another layer of causality buried behind it - not all manufacturers are in the stratosphere.
In the simplest possible light, the difference in the stratosphere can be divided into at least two levels:
The first level is the difference between Chinese mobile phone brands and international mobile phone brands.
According to the data of the Academy of Information and Communications Technology, in 2023, the domestic market shipments of domestic brand mobile phones will accumulate 231 million units, accounting for 79.9% of the mobile phone shipments in the same period, that is, domestic mobile phones have occupied eighty percent of the domestic market. And with the soaring of domestic brands, it is the slow fall of international brands that once occupied the peak.
A simple example of a fall is Apple, which once made the history of smartphones. It defines "smart phone" and takes "user loyalty" as the biggest signboard. But even so, since the second half of last year, Apple's mobile phone sales have continued to decline, and its appeal to consumers has weakened. At the recent Warren Buffett shareholder meeting, Dalian Zhongfan Berkshire reduced its holdings in Apple.
On the other hand, the market price is increasingly polarized, and the temperature of high-end brands and low-end brands is different.
The high-end market is driving recovery, while the low-end market continues to compete homogeneously, so much so that it has reached the point of dire straits. In 2023, sales in the global high-end smartphone market, with wholesale prices above $600, increased by 6% year-on-year, amid a 5% decline in the smartphone market for the full year. However, the replacement demand of low-end users, who occupy most of the market share, has not been fully released.
The "non-mainstream" mobile phone brands that once couldn't hear their voices have stayed away from the Chinese market in the competition that the low-end market is gradually saturated, and chose to go overseas for 300 rounds; Those brands that are more "duty-oriented" choose to continue to cultivate in the high-end market and lead the smartphone industry to recovery.
When the recovery is quietly coming, victory still belongs to a few companies that are deeply cultivated, and only a few companies deserve this medal of growth.
Regarding how to achieve growth in the smartphone industry, Hu Baishan, executive vice president and chief operating officer of vivo, once said in an interview with the media:
"There are two key factors affecting the development cycle of the mobile phone industry: first, the purchasing power of consumers, which is related to the global and national economic development cycle; The second is whether the mobile phone itself has a value point that can impress consumers' desire to change their phones. ”
The differences between the different stratospheres in the same time period are obviously not related to the first factor, but mainly to the second: the value point.
In 1997, Nokia only needed to install a "snake" game on the 6110 mobile phone to win the hearts of users; But by 2010, manufacturers had to create the same touch screen as the iPhone to win users; Later, when mobile phones gradually replaced cameras, one camera was no longer enough, and users began to need two......
So the question is, when the time has come to 2024, what is the value point that mobile phone users really care about?
Create increments in stock
At first glance, the value points that users care about change over time.
But if you use a little patience to disassemble and crumple the product development history of smart phones in the past few decades and chew carefully, you will find that there are four big words written in this history: scientific and technological innovation.
In the era of Snake, technology used limited buttons and very little memory to complete the operation and control of the game; In the era of capacitive touch screens, technology means continuously improving stability and yield; In the age of multiple cameras, technology is about improving light capture and image quality in tight spaces.
Later, technology also means more: from the research and development of cameras, imaging systems, to the self-development of chips and operating systems. Even in 2024, it will include the self-development of large AI models.
But what remains unchanged from beginning to end is the deep user understanding and continuous self-breakthrough. On the point of "technology brings value, value brings growth", vivo, as the leader of domestic smartphone brands, has always had a clear understanding:
The vast majority of market competition is the competition in the stock market, while vivo explores the development of the incremental market, and only through scientific and technological innovation can we develop the incremental market and revitalize the economy.
The vivo X100 series released last year is a symbol of self-developed and integrated technological innovation from hardware to software. Among the new products on May 13, vivo X100 Ultra is a flagship image, performance, and experience, and it is the real flagship "Thanos".
However, scientific and technological innovation is a simple four big words, but it is a long-term test to do, and vivo has spent more than ten years practicing this concept and philosophy.
First of all, hold your breath.
Anyone who is engaged in scientific research knows that the first criterion of scientific research is to sit on a cold bench and not look at the excitement of others.
When other brands are piling up parameters and price wars, vivo is willing to sink down to study the needs of users, and use breakthroughs in pain points to lead the road of scientific and technological innovation, which wins in the first step.
The underlying logic of this long-termist philosophy is the user mindset. Shen Wei, the founder, president and CEO of vivo, once made it clear that "users will always remember the person who created the first, but not the person who followed." We must strive for perfection and strive to achieve more industry firsts", "All our origins will go back to the consumer level to think about the problem." ”
Secondly, you have to be able to get your hands dirty.
The pursuit of user needs is the starting point of scientific and technological innovation, but continuous investment and R&D efforts are greater challenges.
In the past three years, vivo's R&D investment has increased by an average of 20%, and "no upper limit" is vivo's budget standard for R&D. The blue heart model released at the end of 2023 is the result of vivo's investment in a team of thousands of people, spending 20-3 billion yuan, and six years of brewing.
As Shen Wei once said: "Advanced new technology laboratories and research institutes such as user innovation labs, chip labs, analog network labs, and Qianjing security labs have been established one after another, and the seeds full of scientific and technological power have been ......planted one by one."
In the end, it is necessary to produce results.
vivo has been on the way to reaping technological achievements. The most recent one is in 2023, vivo released the "Blue Technology" brand, which includes four dimensions: blue crystal chip technology stack, blue ocean battery life system, blue heart large model and blue river operating system, each of which represents the underlying infrastructure and technology of mobile phones and even more smart products.
At the same time as the release of the new machine on May 13, the "Blue Technology" series also ushered in a new IP-blueprint image. Blueprint Image, which has self-developed algorithms, self-developed sensor technology and self-developed image chips, not only builds vivo's full-link imaging technology leadership, but also constitutes a key part of the blue technology series, further improving vivo's technical puzzle.
It is these results that form the basis of every high-end experience. To some extent, vivo is reconstructing the definition of "high-end" of the Android system on its own.
The end of technology
Looking further, scientific and technological innovation cannot stop at the technology itself.
After all, if things could be simplified like this, the world's best brands would come from the lab, not the business world.
For the real world, the end point of technological innovation is brand power, which includes product power, user loyalty, and the most straightforward business data.
Each brand has its own core masterpieces, and the core masterpieces are often the best validators of brand power. For vivo, the imaging flagship vivo X series is the representative of vivo's brand power.
Since the release of the first product in 2012, the vivo X series has been inherited for more than 10 years, and has embarked on an upgrade path from Hi-Fi chips to micro gimbals, from joint software tuning to in-depth self-development of algorithms, from hardware drivers to the formation of integrated software and hardware design, and from self-developed chips to self-developed large model AI integration.
The vivo X100 series released in 2023 can be regarded as a new milestone for this imaging flagship product series.
In terms of product strength, the vivo X100 series has achieved the leading level among models in the same price range in various fields. From the perspective of user loyalty and data, the first sales volume of vivo X100 series omni-channel exceeded 1 billion yuan, breaking the sales record of all new phones in vivo's history.
Now, with the vivo X100 series ushering in the three new members of vivo X100s, vivo X100s Pro and vivo X100 Ultra, vivo's brand power has also come to another verified juncture, and vivo X100 Ultra is a new brand benchmark.
In terms of product, technology and performance, vivo X100 Ultra hardware has Zeiss 200 million APO super telephoto, blueprint image chip V3+, and software has 100% exclusive self-developed algorithms. Because of the support of blueprint images, vivo X100 Ultra's image strength is even among high-end machines, and the leading degree is also disconnected.
The 4nm process technology, the third-generation Snapdragon 8 mobile platform, and the LPDDR5X memory and UFS4.0 flash memory form a "performance iron triangle", making it possible to improve the smoothness of the system.
Those seemingly subtle and long-tail needs, the vivo X100 Ultra has also taken into account. Emergency communication, low temperature, and underwater extreme environment communication can all be realized through the top communication system, the new semi-solid-state battery + ultrasonic fingerprint.
However, all "buried causes" ultimately depend on the "effect" of user feedback. As IDC analyst Guo Tianxiang said, seizing market share in the high-end market is not only based on technical capabilities, but also on brand attractiveness and added value.
The technology and products are available, and there is still one last link left to further verify the brand power of vivo: whether users pay for it.
If it can finally prove its strength with data, then vivo can once again verify a simple fact: in the process of the smartphone market and macroeconomic recovery, only with patience rooted in the underlying technology and deep insight into users can we reap the common growth of brand and business.
Write at the end
In the past 10 years, domestic mobile phone brands have developed rapidly, from catching up with international brands to surpassing in the high-end market. Behind this achievement, the effort behind the "high-end" is unimaginable to ordinary people.
It never stays at the slogan, but with the greatest understanding of users, with a series of "causes" such as faith, patience, and R&D investment, waiting for the "fruits" of products, users, word-of-mouth, and growth.
As reflected in the economic data in the first quarter of this year, what can create the "fruit" of China's economic growth is also the "cause" paved by countless enterprises like vivo with R&D investment.
This is also a cross-cyclical road that truly belongs to Chinese brands and China's economy.
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