Smartphones in the first quarter of shipments hit a record in history, the brand is facing a reshuffle

Photo courtesy of Oriental IC

The market is saturated and overall sales are falling

Smartphone brand faces reshuffle

The “cold wave” of the smartphone industry, which was driven by factors such as weak market demand and weak innovation. Since March last year, there have been no signs of recovery and it is still continuing. According to the latest data from the Ministry of Industry and Information Technology, in the first quarter of 2018, domestic smartphone shipments reached 81.87 million units, a sharp drop of 27%, the largest drop in history.

"Cold wave" continued, the domestic smart phone brand also ushered in a severe test, ZTE, Coolpad and other brand mobile phone sales continued to shrink, Jin Li was exposed due to the capital chain crisis layoffs out of stock, Meizu also appeared in the third consecutive year of large-scale layoffs. There are indications that the pace of development of the smart phone industry has slowed down, and the domestic smart phone brand may enter a more intense stage of competition, and the industry is accelerating the reshuffle.

Cold wave sweeping

According to public data, mobile phone coverage in China's cities has exceeded 97%, and 72% of Chinese urban consumers have smartphones, even exceeding the smartphone usage rate in developed countries such as Europe and the United States. This means that after a rapid development in recent years, China's smartphone market has become saturated.

Since last year, the performance of the domestic mobile phone market has been far below expectations: the annual sales of less than 500 million units, the first decline in history, and a decline of 7%.

Since 2011, smartphone hardware has been rapidly iterated, and has experienced the "nuclear warfare" of the processor, the resolution of the screen, the pixel battle of the camera, and the memory war. But nowadays, “innovation is weak” has become an indisputable fact for the entire industry, and it is difficult to have revolutionary innovation in the short term.

With the innovative technology cycle of smart phones becoming longer and longer, the frequency of people changing machines is also declining, and the whole industry is beginning to enter the inventory game stage. The brands have changed from being big cakes to fighting for cakes.

In terms of the domestic market, although Huawei, Xiaomi, OPPO, and vivo have stabilized the top four domestic smartphones, and Apple, it has occupied more than 90% of the domestic market share. However, the "cold wave" swept through, and none of them were spared. OPPO, vivo and so on have reduced the order size, and some manufacturers have shrunk orders by more than 10%. Apple and Samsung have also joined the chopping team.

Some analysts pointed out that the current round of smart phone "cold wave" is not the individual brand, but the entire smart phone industry.

Shuffle acceleration

Under this stock market game, Huawei, Xiaomi, OPPO and vivo, which are located in the first camp, must first be encroached on the market share of Jinli, Meizu, ZTE, Lenovo and Xiaojiao in the second camp.

At present, in the second camp of the domestic smart phone industry, the annual shipment can exceed 10 million, only Meizu and Jinli. Surprisingly, the war has not yet ignited, and Jin Li has already collapsed.

According to relevant media reports, Jin Li has been in a financial crisis since last year, owing 8.6 billion yuan to the bank, arrears of suppliers' payment of 4 billion yuan, and accumulated debts exceeding 10 billion yuan. Not long ago, the relevant person in charge of Jin Li admitted through social media that Jin Li has indeed fallen into a capital chain crisis. At present, there is news that Jin Li will cut off 50% of its workforce in an attempt to save itself.

Another heavyweight Meizu in the second camp, the status quo of life is not optimistic, this year has been the third consecutive year of layoffs, the proportion of layoffs is about 10%. Other brands such as Lenovo and ZTE are on the edge of the market, and it is difficult to hear the sound in the market.

The current domestic smart phone brand, the competitive landscape has become more and more obvious: the giants of the first camp accelerated the integration of the market, and the second and third camps of the lost team were accelerated.

The latest data shows that up to now, Huawei, Xiaomi, Apple, vivo and OPPO five mobile phone manufacturers have occupied more than 90% of the entire market, and this figure was 79% last year. This means that if there is no new outbreak point in the future, the living space of the second and third camp smartphone brands will become smaller and smaller.

Who is up and down?

In the future competition of the smart phone industry, who can take the lead, who will be eliminated by the market? It is not only technical innovation, but also strategic layout.

In recent years, Chinese mobile phone manufacturers have continued to take root in India, Europe, North America and even Africa as the domestic market becomes increasingly saturated and competition continues to intensify. Millet, Huawei and other manufacturers that have stabilized the domestic market have already started, and they are strong overseas. Since the third quarter of 2017, Xiaomi has become the number one Internet mobile phone brand in India with a market share of 57%. OPPO in the Southeast Asian market, Huawei has achieved a good record in the European market.

Judging from the current weak domestic industry, this year's domestic smartphone brand is still in the overseas market. However, in the domestic market, the strong first-tier mobile phone brands want to gain new large increments, and only continue to erode the market share of the second and third camp brands.

On the other hand, the arrival of the 5G era will bring a new round of technological innovation and development to smartphones.

In early April, China Mobile opened the first 5G phone in China, which means that the 5G era is really coming. China Mobile's partner in building the site is Huawei, which uses 5G end-to-end commercial products with independent intellectual property rights, including Huawei 5G wireless access network, 5G transmission network, 5G core network commercial equipment, and Huawei just released. 5G CPE commercial terminal based on 3GPP standard.

China Mobile and Huawei also verified the access capability of 5G new air interface to multi-channel 4K ultra-high definition video, and docked and preliminary verified applications including industrial robots, industry video and smart medical. According to reports, 5G commercial terminals are expected to be launched in the second half of 2019. At that time, a new round of reshuffle wars will be launched in the smart phone industry.

"The technical threshold of 5G is higher than that of 4G. Although the domestic ranking is high, but the manufacturers such as OPPO and vivo rely on the frequent release of new machines and the replacement of spokespersons to make eyeballs, once the technology falls behind, the crisis is also a minute." Kang Wei believes that in the future, smartphone manufacturers will develop towards polarization and accelerate the reshuffle of the entire market.

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