Huawei’s territory, divided by who?

Xiaomi, OPPO, vivo, who is more profitable?

The current cell phone market is experiencing a new round of pattern evolution, every time the statistics agency data, there are always people laughing and others worried.

On May 26, Xiaomi released its first quarterly earnings report, showing that its cell phone business revenue had reached 51.5 billion, the first time a single quarter exceeded 50 billion yuan. Xiaomi chairman Lei Jun had announced in a high profile on May 21, Xiaomi 11 high-end series global sales exceeded 3 million units, and took the first domestic 4000-6000 yuan price segment Android series sales. In the financial report, Xiaomi also mentioned that its share in this domestic segment rose rapidly to 16.1% from 5.5% in the same period last year.

And just on April 30, Yu Chengdong, CEO of Huawei’s consumer business, said in his circle of friends that “Huawei’s high-end cell phones gave way to Apple, and the mid- and low-end gave way to OV Xiaomi.”

Later Yu Chengdong also commented, “Huawei cell phone tablet of the domestic market high-end gave way to Apple, mid-range and low-end gave way to OPPO, Vivo and Xiaomi, etc., overseas gave way to Apple, Samsung and domestic counterparts.” The implication is that OPPO, Vivo and Xiaomi are still playing in the low and mid-range, and have not really rushed into the high-end.

Huawei due to the United States four rounds of sanctions to struggle at the same time, a new round of cell phone market reshuffle is in full swing. The outside world is concerned about, Huawei cell phone market, in the end, who is divided?

Among them, the high-end market is the absolute focus of competition, “domestic cell phone manufacturers who is the high-end player” has been the topic of discussion. In order to compete for the high-end cell phone market, whether it is product power, marketing promotion or offline channel expansion, the major domestic cell phone manufacturers have increased horsepower, as to who can really become a rival of Huawei, Apple in the high-end market, each one hopes to be their own.

How much of the market has Huawei unleashed?
“The 8G+256G versions of the Huawei Mate 40 and Mate 40 Pro have not arrived in new stock for months.” said a Huawei phone store clerk in Beijing. Even in Huawei phone stores in first-tier cities, Huawei’s latest flagships are facing out-of-stock conditions.

A cell phone dealer in a fourth-tier city in Hunan told Deep Burn, “Huawei sometimes controls goods proportionally or by region, and as far as I understand, the first and second-tier cities will control goods more strictly.”

On the evening of May 20, Yu Chengdong had also apologized to users in the circle of friends, “because of sanctions restrictions, many products can not be produced and lead to a serious shortage of goods, it is not to the love and expectations of consumers.”

In fact, various data show that Huawei’s cell phone market is shrinking under round after round of controls.

According to IDC’s Q1 2021 global cell phone market share, Huawei has fallen out of the top five from second place in the same period last year, and is classified as “Others”. ranked second.

Huawei's territory, divided by who?

IDC: Global cell phone market share in 2021 Q1

According to research firm Counterpoint Research, Huawei’s cell phone shipments plunged 18% in 2021 Q1, leaving a global market share of only 4% (excluding Glory), with Glory’s global share at 2%. In contrast, last year, Huawei cell phone global shipment market share of 14% (including glory), ranked third. With this data projected into 2021, Huawei and Glory together, lost about 8% market share in the global market.

In the domestic market, according to Canalys data, Xiaomi OV the three cell phone shipments are more than 65% year-on-year growth, only Huawei growth rate of negative 50%, the market share also fell from 41% in 2020Q1 (including glory), to 16% (excluding glory).

Since September last year, Huawei can only rely on the chip inventory to maintain the cell phone business. Previously, an industry source analyzed that there is a 40 million unit flagship gap in the market in 2021, and domestic mainstream cell phone manufacturers are bound to seize the bonus cycle of pattern restructuring. While Huawei’s market share is declining, several other major cell phone manufacturers are growing their market share.

Canalys reports that Apple’s cell phone share in the domestic market has grown to 13% from 9% in the same period last year. Apple’s Q2 fiscal year 2021 earnings report also confirms this: iPhone business revenue was $47.94 billion, up 65.5% year-over-year, with Greater China revenue of $17.728 billion, compared to $9.455 billion a year ago, up 87.5%.

Huawei did release a part of the market share is not false, but the major manufacturers are divided which part of the market, but also through their share in each retail slot to analyze.

Although due to statistical caliber and other factors, there is some discrepancy in the market share of the data of major institutions, but from the data published by the well-known blogger @Anhu Dugufu Chang Shi, who has long published the retail data of China’s cell phone market, Huawei is mainly in the high-end market share of more than 5,000 yuan year-on-year growth in 2021 Q1 Chinese cell phone market, but the rest of the gear is down across the board.

Huawei's territory, divided by who?

Zhihu @Anhu Dugufu Chang Shi: Cumulative Chinese cell phone market TOP manufacturers by price segment retail share and year-on-year growth rate

In specific analysis, in the market above 8000 yuan, only two Apple and Huawei, of which Apple’s market share in this slot exceeded 90% in 2021Q1, with a year-on-year growth rate of 260.3%, Huawei’s market share fell to 5.1%, while the year-on-year growth rate was only 75.7%. And during Q4 2020, in the above-8000 yuan bracket, Huawei’s market share is 6.7%, while Apple’s market share is 87.23%. This means that in the ultra-high-end market, some of Huawei’s users, or flow to Apple.

The same is true for the high-end market in the RMB 5,000-8,000 range. Apple’s market share grew from 50.43% in Q4 last year to 59% in Q1 2021, while Huawei’s dropped from 41.99% to 36.7%. In the last two quarters, the gap between these two in this segment has widened.

Overall, the high-end market above RMB 5,000 is still occupied by Apple and Huawei, with an obvious double oligarchy. oPPO, vivo and Xiaomi have also entered the RMB 5,000-8,000 bracket in Q1 2021, but the three combined have less than 2% market share.

However, in the different slots of 1000-5000 yuan, OPPO, Vivo and Xiaomi can be seen, all with different degrees of growth. A cell phone industry practitioners in the pulse communication electronic circle speaks: “In order to seize the low-end market given up by Huawei, glory, the manufacturers are high-end processors and cost-effective screen, 65W or even 120W fast charging, are supplemented to the products in this price range, Redmi K40 first sale ‘bucket machine ‘, iQOO Neo5 and other competitive products, occupying many Huawei glory to give up the low-end market.”

That is to say, at least in the domestic market, Yu Chengdong’s circle of friends speech is not without reason.

Collective spell high-end
The emergence of the 5G replacement window, coupled with Huawei because of the chip business obstruction, market share continues to decline, the cell phone market is experiencing a round of reshuffling, and the high-end cell phone market with high profit margins is becoming the most central battlefield. As Nicole Peng, vice president of mobile market research at Canalys, said: “For Huawei’s competitors in China, the entry-level 5G market is just the ‘low-hanging fruit’. And the real battleground is in the high-end ($500 and above) segment.”

A variety of factors have pushed Chinese handset makers to make a bold push forward in the high-end market, especially since 2021.

In the first quarter, the cell phone market experienced a wave of new machine launches and publicity boom. on March 11, OPPO released the Find X3, ten days later, OnePlus released the 9 series, and after another five days, Xiaomi’s first spring launch brought the Xiaomi 11 and 11UItra as well as the folding machine. Throughout March, mobile phone-related news almost never left the Weibo hot search.

In order to impact the high-end, the most basic operation of domestic cell phone manufacturers is to improve the product power and then raise the price of products, after all, product power is the core. Although for Xiaomi OV and other manufacturers, 5000 yuan slot is a hurdle, but in order to price positioning, the major cell phone brands are targeted to improve the configuration, focus on marketing promotion.

In the hardware, the major manufacturers continue to improve the camera, screen, battery and other levels. Among them, in 2021, the competition of cell phone photography into a new dimension. oppo system camera added a “microscope function”, can magnify the details 60 times. At the end of last year, following Vivo’s announcement to join hands with German optics company Zeiss, in March this year, one plus and Hasselblad reached cooperation.

A cell phone manufacturer evaluation manager Xu Yan previously told Deep Burn that in 2021, major cell phone manufacturers will put more effort on the screen display effect, in addition to color accuracy, saturation, brightness and other basic parameters continue to evolve, high refresh rate is the focus of the game of cell phone manufacturers in the past two years.

Since 2020, the major cell phone manufacturers are also telling the story of “cell phone + AI + IoT”, Internet of Everything, in order to compete for high-end market.

Among them, Huawei ecological chain proposed “1 + 8 + N” strategy, trying to create a full-scene intelligent life for users. The Xiaomi ecological chain is based on “investment + incubation”, adding loT modules to each ecological chain product, around the core of the development of the Mijia APP, allowing users to control its products through this APP with one click. Group”.

In addition to products and ecology, the major cell phone manufacturers in the marketing and promotion level is also to high-end impact, such as spokesmen from the flow of young people to the strength of the big expansion. First, OPPO found a mature and charming uncle Jiang Wen to endorse OPPO’s “ideal work of the decade”. Next, OnePlus also invited Zhou Xun and Hu Ge, two powerful actors, to endorse OnePlus9 Pro.

In addition, whether the layout of offline channels can be broader and deeper will also affect the future ranking of each family. “Although they are all grabbing offline channels, offline is not having a good time. After the epidemic, the proportion of online channels to retail is increasing, while offline channels have advantages such as users being able to experience on site, which will be more conducive to the sale of high-end cell phones.” Sun Yanbiao, president of the First Mobile Phone Industry Research Institute, believes.

The white-knuckle war in the offline market has already begun. Offline channels are one of the core competencies of OPPO and Vivo, both of which now have more than 200,000 offline stores. But other manufacturers want to establish high-end brands and expand market share, but also inevitably can not be separated from the offline channel.

“Currently, the online channel accounts for about 30 percent of total smartphone shipments in China, which means that the remaining 70 percent of smartphones are sold offline. And in this part of the offline market, Xiaomi’s current share may only be about 7%.” Wang Xiang, president of Xiaomi Group, said during the 2021Q1 earnings call that good deployment of offline channels and improving the efficiency of offline channels is one of the three things that Xiaomi insists on doing.

It is reported that as of April 30, 2021, Xiaomi’s total number of retail stores in mainland China exceeded 5,500, and is expected to complete the goal of “one Xiaomi House in every county” by the end of the year, with the next step being to move into the townships.

Liu Zuohu, CEO of OnePlus, pointed out in his internal letter released in December 2020 that he would make a big push into offline, and revealed that OnePlus has covered 31 provinces and 240 cities in China, and the growth rate of offline stores has reached 316%. at the launch event in March, he stressed again that the development of offline channels is one of the priorities this year, and the team of offline channels has been expanded to over 1,000 people.

There is no doubt that the competition in the high-end market is gradually white-hot, but manufacturers to build high-end products must not be a pile of parameters or configuration, to build a high-end brand is a systematic project. A new round of high-end cell phone market competition, has just begun.

Cell phone manufacturers, the future to fight what?
Yu Chengdong, who has been nicknamed “Yu Dazui”, explained the current changes in the cell phone market bluntly in his circle of friends at the end of April, perhaps with a certain amount of gambling. It is clear that after years of development, the competition in the cell phone market is still brutal.

In the fully competitive cell phone market, the major domestic manufacturers to tell a good high-end story still need time. Lin Mo, a senior engineer at Xiaomi, expressed his opinion on the pulse that the main thing to build a high-end brand of cell phones is to have their own characteristics. Whether product power or marketing promotion, are only the basis for building high-end, and to build features need huge time and money costs to increase the threshold, high-end brand is not a day can be made, but by the generation of products to build up.

In the hardware competition more and more homogeneous situation, cell phone manufacturers are more and more competition lies in the fight software, from hardware development to software and hard parallel. Sun Yanbiao believes that the current competition in the cell phone industry is to have an independent operating system that can connect up more terminals in the era of Internet of everything.

Although the major cell phone manufacturers are increasing offline channels, but by the epidemic, the development of online channels and other factors, offline channels are also very difficult days, the channels are also looking for products that can be profitable outside the phone, IoT products that can bring high profits to the channel is also the key to the development of cell phone manufacturers.

A cell phone industry observer believes that the next three years, the cell phone industry global market share ranking or will be, Samsung, millet, Apple, OPPO, vivo, glory, Huawei although able to launch flagship new products in stages, but the impact of the chip is still difficult to be resolved in the short term. And glory is currently in the reorganization stage after the independence.

Although a number of industry players have their own views on the evolution of the future market pattern, but most are more optimistic about Xiaomi. “Xiaomi still has certain ecological advantages.” Sun Yanbiao said.

In addition, in the past six months, cell phone manufacturers have been rumored to enter the “car circle” of the news. First, Xiaomi announced plans to invest $10 billion in the next 10 years in the intelligent electric vehicle business, the first phase of investment of 10 billion yuan; soon after, Huawei announced that the main focus of intelligent car technology solutions; recently, OPPO was revealed to have been in the preparation of car-making matters, OPPO founder Chen Mingyong led the team, intensive research on the intelligent car industry chain.

Sun Yanbiao believes that currently in the automotive field, the technology of the car frame is already very mature, the design of the car intelligent cabin has become one of the key factors in the future development and innovation of the car. The design of the car intelligent cabin is a kind of ecological integration, and cell phone manufacturers have certain advantages in this regard. In the long run, outside the cell phone business, car-making will also provide new growth drivers for cell phone manufacturers.

At the same time, he also pointed out that the gold content of building cars is higher than that of cell phones, and the news of cell phone manufacturers building cars has itself a certain pulling effect on the building of high-end brands of cell phones.

Innovation is fundamental to the development of the industry, with the difficulty of breakthroughs, cell phone industry innovation is increasingly difficult. And in Huawei because of the chip led to business hindrance, as well as the 5G replacement tide of dividends still exists, the major cell phone manufacturers only grasp this opportunity to step up to a new level.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/huaweis-territory-divided-by-who/
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