Recently, the statistics agency has released China and the global smartphone market shipment statistics report, of which Huawei’s performance is quite eye-catching. And this eye-catching performance has triggered the Chinese mobile phone industry domino effect. Huawei’s third-quarter market share report for china and the global smartphone market, released by market research firm Canalys, jumped 66% year-on-year as shipments in China’s smartphone market fell 3 percent overall.
With global markets growing by only 1% year-on-year, Huawei’s year-on-year growth has also reached 29%, far outpacing other handset makers in the top five, leaving the outside world with little to see the negative impact of Huawei’s “physical list” in the US and more like a beneficiary of the disaster. Of course, this benefit is more from the unexpected, reasonable surge in sales in the Chinese market.
One of the effects: China’s market Xiaomi is the most injured, the price is replaced by OV
In China’s smartphone market as the main competitive feature, Huawei’s surge naturally means a collapse in friends. To be sure, China’s smartphone market during the same period was in stark contrast to Huawei’s surge, with other leading handset makers OPPO, vivo and Xiaomi suffering sharp declines of 20 per cent, 23 per cent and 33 per cent respectively. In the end, Huawei came close to OPPO’s 17 million units, Vivo’s 17.5 million units and Xiaomi’s 8.8 million units combined with 41.5 million units.
In fact, for mobile phone manufacturers, the reduction in shipments is on the one hand, more importantly, this decline in market share is at the expense of output value (reduced quantity and reduced prices) at the same time appears quite helpless and terrible.
The industry remembers that in the first half of this year, OV and Xiaomi both made strategic changes to their brands, including OPPO’s introduction of Realme, which debuted in India last year, to the Chinese market, the launch of the Reno sub-brand, vivo’s launch of the sub-brand IQOO, and Xiaomi’s split Xiaomi and the Redmi brand. Their core purpose is only one: to focus on price/performance.
Want to come as a smartphone co-owner, they are also expected to Huawei mobile phone this year in overseas market development uncertainty, is bound to greatly increase the size of the Chinese market, in the face of whether in the product itself, brand or marketing resources are dominant Huawei, the only way to ensure that the impact can be reduced only in a cost-effective way. But the truth is that, even so, in the third quarter of this year, instead of sustaining their shipments, they are in a growing slump, especially Xiaomi.
As we all know, price/performance has always been at the heart of Xiaomi’s mobile phone business growth, both in the past and after the brand split. However, with the aforementioned OV in the Chinese market cost-effective force, Xiaomi’s tried and tested cost-effective has been replaced by OV.
Take The August 2019 Android Phone Price/Performance List, released by Ann Rabbit. In the 500 to 1499 yuan price period, the top 10 mobile phones, Xiaomi and Redmi a total of 3 on the list, OV a total of 3 on the list, including the vivoZ3 more than Xiaomi and Redmi, including all 3 mobile phones, The RealmeX youth version, released this year after the introduction of the Chinese market from India, surpasses two phones, Xiaomi and Redmi. It should be noted that the RedmiNote7 Pro is ranked bottom of all 10 cost-effective handsets.
According to the “Southern Metropolis Daily” reported in October this year by the Nandu appraisal laboratory jointly released by Skieer vision information “mobile phone brand word-of-mouth list” shows that in terms of price-performance word-of-mouth, vivo ranked first, beyond this year’s Xiaomi split out of the main the ultimate cost-effective Redmi, OPPO is beyond Xiaomi.
Of course, with the implementation of OV’s main price-performance strategy this year, its previous “high price and low ratio” model of maintaining revenue and profit growth has also ended. Still, OV has failed to stop its decline in sales in China, in the same predicament as Xiaomi.
Effect 2: OV blood-fighting Indian market growth millet bottleneck period comes ahead of time
History is always repeated in the ICT industry. Similar to Xiaomi’s return to life in 2017 through the Indian mobile phone market, the Indian market has become a blessing for OV. While the CHINESE mobile phone market has fallen sharply, the Indian mobile phone market is booming.
In the third quarter, according to Counterpoint Research, vivo’s market share in Indian smartphones jumped to 17% in the quarter from 10% a year earlier, while OPPO’s market share remained unchanged at 8% despite the lack of change a year earlier, but shipments increased 12 year-on-year. %。
It’s worth noting that its sub-brand Realme has performed well, with a rocket share jumping from 3% in the same period last year to 16% this year, bringing OPPO-Realme’s market share in Indian smartphones to 24%, not only surpassing the second-ranked Samsung, but also just 2% from the number one Xiaomi.
The industry knows that for Xiaomi mobile phone business, the Indian market has to some extent exceeded the Chinese market, especially in the Chinese market, including organizational structure, brand split and other strategic adjustments have not been effective, or even accelerate the decline, is bound to become the core of supporting Xiaomi mobile phone business development, once the flash lost, the consequences are unimaginable.
But the house leak is like the overnight rain. Given the high-pressure competition faced by OV in China’s mobile phone market, in order to ensure the stability of sales, the Indian mobile phone market will also become one of its second-largest after China’s core market, coupled with the Indian mobile phone market to drive the threshold of price-driven growth is not high, for revenue and profits are not transparent and no pressure ov, It’s easy to crack down on Xiaomi with a price-performance strategy.
If Xiaomi in India’s mobile phone market is about to face the market natural attribute growth bottleneck, this quarter’s OV attack, foreshadowing Xiaomi’s growth bottleneck in the Indian mobile phone market will come ahead of schedule. By then, China’s mobile phone market will stop falling, India’s mobile phone market growth has stagnated, or even do not rule out a decline, Xiaomi mobile phone business will face a huge crisis.
So is the boom in India’s smartphone market a blessing or a curse for OV?
As mentioned above, India’s smartphone market is still a price-performance, or low-cost-driven growth market for quite some time now and in the future.
In the fastest-growing realme, Realme C2, Realme 3i and Realme 5 were the main drivers of their third-quarter sales, according to Counterpoint Research, and almost all of these models were thousands of dollars, with the best-selling Realme 5 on the line The 3GB-plus-32GB version costs only 9999 Indian rupees (about 985 yuan). As for the realme C2 series, the price range is Between 5999 Indian rupees (about 580 yuan) and 7999 Indian rupees (about 770 yuan); The 3i series sells for 7,999 Indian rupees (about 800 yuan) to 9,999 Indian rupees (about 1,000 yuan).
So cost-effective, is said to have overtaken the red rice. And since the Indian market is also the core of Xiaomi mobile phone, the future Xiaomi will inevitably die at all costs of this market, OV and Xiaomi at the expense of revenue and profit of the price-performance war will be intensified, then, if OV in the Chinese market still can not stop the decline, may repeat Xiaomi’s development path.
Effect 3: Huawei China market continues to add code OV, Xiaomi China market has a strategic turnaround opportunity is slim
The so-called evil of the blessing depends on, the blessing is the curse. This analogy can’t be more appropriate for Huawei phones.
I don’t know if the industry remembers Lenovo Liu Chuanzhi’s remarks in 2009 that Lenovo was already on the brink. Lenovo was plunged into crisis at the time because of the global financial crisis and the strategic failure of Lenovo’s global expansion too quickly. To this end, Liu Chuanzhi put forward a strategy to return to the Chinese market, the Chinese market once again as Lenovo’s home base, and finally made Lenovo through the crisis.
Today’s Huawei, while different from Lenovo’s troubles, has all the result of slower growth due to uncertainty in overseas markets, and it seeks to fill gaps in the Chinese market. Huawei did, and in just four quarters (the high growth rate was nearly two quarters), it jumped its smartphone market share in China from 24.9 per cent to 42.4 per cent. YoY growth rate of up to 66%.
What’s more, Huawei’s handsets are already nearly as much as OV and Xiaomi combined in China. In the third quarter of 2019, Huawei shipped 66.8 million units in the global smartphone market, and Huawei’s handsets in China already accounted for 62% of its global shipments (in fact, in the last quarter, Huawei’s handsets in China accounted for 63.5% of its global shipments. %)。 Just a year ago, Huawei’s handsets shipped only 48% of its global shipments in China.
Earlier, industry analysts said in a report that Huawei’s market share in the Chinese market would increase from 35-40% in 2019 to 45-50% in 2020. More industry insiders believe that, according to this momentum, the future share of Huawei’s mobile phones in the Chinese market reached 70%-80% is not impossible.
Let’s not discuss whether the industry’s claims are overblown, so let’s first look at Nicole Peng, vice president of Canalys, on the performance of Huawei’s handsets in the Chinese market: Huawei has opened a huge gap with other manufacturers. Its share is 25% higher than the quarter’s runner-up vivo. Huawei’s dominance gives it enormous power to negotiate supply chain and increases its market share among channel partners.
He also said that given Huawei’s close relationship with operators in 5G network deployment and its strong control over key components such as 5G chipsets compatible with local networks compared to local counterparts, Huawei has the ability to further consolidate its dominance, which gives OPPO, vivo Xiaomi puts a lot of pressure on them, and they find it hard to make any breakthroughs.
Nicole Peng’s comments highlight Huawei’s future leadership in supply chains, channels, technology, and more because of its soaring sales in the Chinese market. But we need to add that Nicole Peng ignores a unique advantage that Huawei has equally important in the Chinese market over these leading positions, which is that this year the U.S. has added Huawei to its list of entities, and the unique positive amplification effect on its brand has been created in the domestic market.
In response, Counterpoint Research also mentioned Huawei’s third-quarter performance in china. The so-called time, land, people and, want to come to China is not to give up this blessing of the opportunity, and in the future continue to add to the Chinese market.
So the question arises, if Huawei continues to add to the Chinese mobile phone market, will OV and Xiaomi have a chance?
Effect FOUR: OV, Xiaomi should take the future timely risk-taking strategy adjustment Huawei’s conscience at risk
Before we talk about whether OV and Xiaomi have a chance, we might as well introduce a small episode that was already in place in the second quarter of 2019, when Huawei was a big part of China’s mobile phone market. Interestingly, on the day of the report’ release, Huawei also held a performance launch, in the press conference, the South China Morning Post reporter asked: Huawei mobile phone is a big, conscience will not hurt?
The industry has different interpretations of this. And we believe that the South China Morning Post reporter’s question is the intention that Huawei in China’s mobile phone market is a big, quite a bit like the little Mire jun said: go their own way, let others have nowhere to go! Is it really good for the competition and market of China’s smartphone industry that Huawei’s company is a big one at the expense of other Chinese handset makers? This was more evident in the third quarter of this year. What about the truth?
Looking at the global smartphone market, Huawei came in second with 66.8 million units of shipments and 17.6% of the market share in the third quarter, compared with 32.7 million units (8.6%), according to Counterpoint Research. 29.5 million units (7.8 per cent) ranked fourth and sixth.
It’s worth noting that OPPO sub-brand Realme came in seventh place with 10.2 million units (2.7 percent) in the same quarter, citing a surge in sales in India and Indonesia. Don’t look down on this ranking, which has been in place for just over a year, its global smartphone sales and rankinghave past the established Motorola.
More interestingly, in evaluating the performance of the manufacturers in the quarter, Counterpoint Research has largely put opPO, vivo, OnePlus, Realme and other brands together to evaluate the bbK group. Point Research analyst Shobhit Srivastava points out that Stephigh Group has BRANDS such as OPPO, Vivo, OnePlus and Realme, with three seats in the top 10 (about 19.1%), with a total share of more than 20% Above. The three brands shipped around 72.4 million units in the third quarter, surpassing Apple (44.8 million units) and Huawei (66.8 million units) and close to Samsung (78.4 million units), and the BBK family, which has taken root in the local and aggressively expanded international markets, is expected to achieve higher overflights in the future.
The review slot of Point Research is really meaningful and fascinating. If this is based on this rating, shipments of Huawei’s (including glory) smartphones, which are so fast growing in China’s mobile phone market, will be shipped to the global market, compared with the combined number of brands such as BBK’s OPPO, Vivo, OnePlus and Realme. Obviously there will be no feeling that the South China Morning Post reporter’s Huawei conscience for the Chinese mobile phone market will not hurt, but instead, we see Huawei may face another strong opponent in the future, still need to work harder. What’s the reason?
As we all know, Huawei’s mobile phone business is far more uncertain in overseas markets than BBK’s brand because of its particularity (both by market and non-competitive factors).
In terms of global markets, OV and Realme are now firmly in India, the world’s third-largest smartphone market, and Southeast Asia is also the world’s largest smartphone market, the world’s second-largest smartphone market and the highest value market for smartphones, and The One Plus (One Plus) entered last year. Allegedly the momentum to the good. OpPO Reno Ace is now registered in the U.S. and is expected to be available in the U.S. market by the end of this year, according to a recent report from Dutch technology media LetsGoDigital.
By contrast, Huawei has little chance of entering the U.S. smartphone market in the short term, apart from a clear gap between india and Southeast Asia.
As for Huawei’s most important overseas market, Europe, OPPO has applied for 13 product names, according to Letsgodigital. 2Z, 3Z, 4Z, 5Z, 6Z, 7Z, 8Z, 9Z, 10Z, 20Z, 30Z, 40Z and 50Z. These applications are listed in category 9 with instructions, including mobile phones; smartphones; smartphone software; headphones; battery chargers, etc.
At this point, I believe the industry should understand why Huawei also need sand in China’s mobile phone market to continue to add the real reason! After all, with the fierce competition in the market, if the BBK system in the Chinese market can not effectively contain the sharp decline, its future is likely to carry out strategic brand integration, in order to enhance the overall competitive efficiency of the collaboration, and to compete with Huawei. Huawei, on the other hand, now has the best policy to gain the largest market share in the most uncertain Chinese market.
What if THE BBK-department’s OPPO and vivo, including all of its sub-brands, would eventually turn around through the strategic brand consolidation that ventured into, and even threaten Huawei, what if it was for Xiaomi?
In fact, as early as this year, Xiaomi split the Xiaomi and Redmi brand, we have written an analysis of the risks of this strategy, in short, after the split, Xiaomi and Redmi brand through the most valuable price to reflect each other’s obvious separation.
But the fact is, since the split, the price of the Redmi brand located in the ultimate price/performance ratio is rising (trying to cover the high and low end of the market), the price covers 699 to 2699 yuan, the result is quickly in the most cost-effective 500 to 1499 yuan this price segment lost to OV, in contrast, Xiaomi brand in the price also did not reflect the original split will focus on advanced technology research and development, and based on the positioning of the high-end market, such as the latest Xiaomi 9 Pro 5G mobile phone 3699 yuan, for the current China has released the lowest price of 5G mobile phones, the main cost-effective intention is still obvious.
The market is the most objective criterion for testing the correctness of the strategy. The sharp 33% drop in Xiaomi’s shipments in China in the third quarter, and the narrowing of the gap due to the attacks on OV and Realme in India(including a decline in its market share from 27% to 26%), is certainly a problem with Xiaomi’s strategy.
However, compared with OV and Huawei, Xiaomi’s unique IoT (high revenue) and Internet business (high margin) growth still provide redundant space for Xiaomi’s future mobile strategy. By separating Xiaomi from Redmi for example (at least it should allow Redmi to take back the value for money advantage from OV), for example, instead of pursuing ASP growth alone, it is focused on the chinese and Indian markets, particularly India.
The outside must first be in the interior. For Huawei, this year’s sharp increase in china’s mobile phone market to give opponents the lethal, including the sharp decline in the volume of competitors, product strategy changes and the resulting competition between friends, the market effect of the profit, so that Huawei is bound to continue to add yards in the future, especially in the “outside” still have variables, “Anendi” it’s a top priority. It is not a matter of conscience pain not pain, it is a pain to the end.
Unity is strength. In the face of Huawei’s near-crazy attack on China’s mobile phone market, if ov can not effectively contain its sharp decline in this market in the future, then the brothers of the SAME BBK system OV, Realme, OnePlus through integration into one, the domestic market to avoid rolling each other, as far as possible to narrow the gap with Huawei. Overseas markets, especially in India, repeat Huawei’s dominance in the domestic market, the pressure on Xiaomi, sweeping Southeast Asia, will be Samsung pulled down, stabilize the three major markets, the United States, European markets have the development of the backing, while from the overall shipments will give Huawei great pressure.
Extra-terrestrial compensation for in-ground losses. It’s a problem to sell or make a profit. However, for the positioning of Internet companies, hardware profit margin of no more than 5% Xiaomi choose the former as a veritable. What’s more, IoT and Internet businesses with revenue and profit sources are back in the bottom of the mobile phone business, boosting sales and increasing users, and Xiaomi still has hope to compete with Huawei and OV.