Although domestically produced mobile phones have developed rapidly in recent years, they have not brought about qualitative changes in industrial development. Behind the attack on half of the country, technology, profit, and brand are still the three pain points in the hearts of domestic mobile phone manufacturers.
More and more manufacturers are beginning to make breakthroughs, and these changes are reflected in the 2014 Mobile World Congress (MWC2014). Among them, it seems that Huawei is the most subversive.
Upon arrival at Barcelona Airport, Huawei’s advertisement appeared in front of us. The next week, from the big screen of the venue to the streets of Barcelona, ​​you can see Huawei's logo. "The network in the 4G era is a big breakthrough compared with the 3G era. Terminal manufacturers must also change randomly." Huawei's consumer BG (Huawei Terminal) CEO Yu Chengdong said that Huawei's mobile phone market currently has a global market share of about 5%, with Apple. There is still a big gap between 13% and Samsung's 33%. "I hope to achieve a market share of around 15% in a year or two, so that we can reach a safe area."
"Connect with young people"
On February 23, Huawei released a number of new products on the day before the opening of MWC. In addition to the 7-inch tablet glory X1, the release of the TalkBandB1 smart wearable bracelet has become the highlight. It is understood that TalkBandB1 is priced at 99 euros in Europe and can be used with the glory X1, in addition to recording sports and regulating sleep. Can be a Bluetooth mobile phone and has a call function.
According to industry opinion, at this stage, the meaning of smart wearable devices for manufacturers is more or more than actual needs.
Zeng Wei, director of communications consulting for Zero Research Consulting Group, believes that Apple and Google, as industry leaders, have been slow to develop on wearable devices. It is precisely because of the uncertainty of product form that “the most urgent task is to solve the user experience first. Some of the most basic bottlenecks, such as energy consumption, charging, and interaction, rather than the concentration of smartphones."
Yu Chengdong’s response is also very conservative: “This is just a test of water.†He revealed that the profit margin of the accessories is higher than that of the mainframe. The TalkBandB1 price of 99 euros in Europe is more profitable to Huawei than the glory X1 of 399 euros. The rate is higher.
In addition to wearable devices, Huawei is also seeking cooperation in other areas. On the last day of MWC, Huawei Consumer BG announced a strategic partnership with Perfect World in the field of video games. At the CES show in January this year, Huawei's first model was also launched in China's first micro-game console Tron, which is scheduled to be launched in the Chinese market in the second quarter.
Liu Jiangfeng, president of Huawei Glory, said, "All the machines we launch may not make money. What we want is the connection with young people, which is the purpose of our cross-border cooperation."
Leverage high-end profit margins
This year's MWC, there are 99 Chinese companies exhibiting, only about 70 last year. Except for ZTE, Lenovo, and Jinli, most of the other exhibitors have no name. Domestic brand mobile phones have been concentrated in the low-end market in recent years, but most of them are in the low-end market. The overseas market has almost no influence and the profitability is close to freezing point. According to IDC data, Apple captured 56% of the market's profits in 2013 with 15% of shipments. In order to improve profit margins and branding, domestic mobile phone manufacturers have to extend to the middle and high end.
In 2013, Huawei's terminal sales revenue was US$9 billion, a year-on-year increase of around 25%. It was one of the few smartphone manufacturers that made money in 2013, but the profits came from overseas business. Yu Chengdong said, "Huawei's average terminal shipment price has increased by about 30% per year. We hope to get the average unit price."
Huawei is also making a big push overseas. According to Huawei's official data, the countries with the largest shipments are China, Spain, Germany, Italy and the United Kingdom. However, in the US market, Huawei only accounts for 22% of the market.
Xu Zhijun, Huawei’s rotating CEO, said in a speech at MWC that a series of more powerful mobile phones will be launched in the United States to expand its business in the United States. He said that this year he hopes to increase the sales of Huawei mobile phones from 80 million in 2013 to 100 million in the world, which is about 8% of the global market share. Regarding how to achieve the goal, Yu Chengdong said that the first is to introduce good products, improve the stability, performance, user experience, etc. of the mobile phone, and bend over the road in 4G.
Yan Zhanmeng, senior analyst at IDC China, believes that China's smartphone market will continue to grow substantially in 2014, but it will drop more than 63.6% in 2013. The wave of equipment upgrades brought about by the 4G era, or the time when Chinese companies overtake the corners.
The brand still needs to "replenish the class"
After the issuance of the 4G license, China Telecom and China Mobile have jointly established sales plans for 36 million and 100 million 4G mobile phones. Many insiders believe that this will provide huge opportunities for domestic brands such as Huawei, Lenovo and ZTE. But it is really necessary to seize the opportunity, in addition to the continuous innovation of product technology, but also need to "remediate classes" in the brand influence.
Yu Chengdong revealed that traditional channels account for 80% of Huawei's share, and e-commerce channels are only 20%. “E-commerce is also focused on our efforts. Partners generally don’t return more than 10 points, so we can do retail at wholesale prices.â€
In addition to improvements in the channel, Huawei terminals are undergoing a “millet-like†transformation, and the independence of “glory†is the experimental field. After Liu Jiangfeng was appointed as the president of the glory division, he hoped to explore e-commerce sales through the Internet model. Liu Jiangfeng believes that the core is to strive for the "cool" attribute of glory, to use the product rather than the peripheral operations to find the target user group, to wash away the consumer's impression of Huawei's B2B "serious". According to him, in 2014, Huawei's glory goal is to achieve a profit of 100 million US dollars, sell 20 million mobile phones, and strive to double every two years. "We hope that after two years, Xiaomi will go back and learn glory and imitate glory."
Huawei’s terminal chief marketing officer Shao Yang revealed that Huawei’s internal consensus is that Huawei’s mobile phone is facing Samsung’s Apple, and glory is responsible for fighting against Xiaomi. In the competition with Apple Samsung, the key to winning is to win in chaos. In the LTE era, no one can make the ultimate product at one time. In the next few years, the competition of LTE will be very chaotic, which is for Huawei. Said to be an opportunity."
According to Tan Yanming, senior consultant of Deutsche Telekom China, in the second stage, if Huawei wants to compete with Apple and Samsung and increase the product premium space, it needs to be further differentiated from Huawei's role as a traditional equipment provider to gain consumer awareness.
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