Mobile phone market shows signs of fatigue; global mobile phone brands reduced to four or five

The sub-zero temperatures in Beijing have added a chill to the mobile phone manufacturers, who are now in the final stages of a reshuffle.

On December 27, the civil ruling of the Daxing District People's Court of Beijing showed that Smartisan Technology was applied for pre-litigation property preservation by Aoyin Technology (Beijing) Co., Ltd., and the court ruled to freeze Smartisan Technology's deposit of RMB 4.5 million in China Merchants Bank. This is another mobile phone manufacturer that has encountered a capital chain crisis after Gionee.

[[253773]]

According to the latest report released by the China Academy of Information and Communications Technology, in November 2018, the domestic mobile phone market shipped 35.37 million units, a year-on-year decrease of 18.2% and a month-on-month decrease of 8.2%. From January to November 2018, the domestic mobile phone market shipped 379 million units, a year-on-year decrease of 15.6%, and 39 new models were launched, a year-on-year decrease of 49.4% and a month-on-month decrease of 18.8%. When the "big situation" is not good, small and medium-sized brand manufacturers are more likely to become "cannon fodder".

At the 2018 "***一场" flagship mobile phone launch conference, Honor President Zhao Ming told reporters including *** Finance that there will be about four or five global brands in the future. The so-called globalization is not the success in a certain country or region, but the brands that have global influence or can achieve more than 5 to 10 points worldwide.

"What remains unchanged in future competition is that each opponent will become smarter, the follow-up time between technologies will be shortened, and new strategies and playing methods will be imitated by each other. Small brands and manufacturers may make some design changes with the help of industry solutions and some capabilities of chip providers, but the competition in technology is now not just about micro-innovation, but requires larger teams and systems to support innovation." Zhao Ming said that this is also the reason why the development of the entire mobile phone industry will become increasingly difficult in the future.

Mobile phone replacement cycle extended

In the sluggish smartphone market, every mobile phone manufacturer is trying to find ways to stimulate consumers' interest in changing phones.

From full screens to AI, to various Turbo "accelerators", under-screen fingerprints and TOF stereo depth lenses, the speed of popularization of new technologies is clearly accelerating.

According to a report by TrendForce's TrendForce Research Institute, as major Android phone brands have introduced under-screen fingerprint technology on a large scale, the penetration rate of fingerprint recognition in smartphones has continued to rise. It is estimated that in 2019, the share of ultrasonic and optical under-screen fingerprint recognition technology in the mobile phone fingerprint recognition market will increase from 3% in 2018 to 13%. In the next few years, the scale of the 3D sensing market will also show geometric growth, reaching US$10.89 billion by 2020 and US$18 billion by 2023. The penetration rate of the smartphone market is constantly increasing, from 2.1% in 2017 to 28.6% in 2020.

In the view of analysts, domestic mobile phone manufacturers are undoubtedly the main promoters of this wave of new technologies.

Take TOF technology as an example. In August this year, OPPO announced its latest layout in TOF technology at a media communication meeting. OPPO believes that in the upcoming 5G network, with 3D structured light, more application scenarios can be realized. For users, games will no longer be limited to the pleasure brought by the touch of fingers and screens, but a full-scale experience of seeing, touching, moving and creating.

TOF is the abbreviation of Time of Flight. It is a technology that continuously sends light signals to the target, and then the sensor receives the light signals returned from the target, and calculates the round-trip flight time of the transmitted and received light signals to obtain the measured distance. Compared with 3D structured light technology, which is more focused on close-range human recognition, TOF technology is more suitable for relatively long-distance 3D information collection, and has a wider range of applications and imagination space.

At the V20 launch event in Beijing on the 26th, Honor demonstrated more application scenarios equipped with TOF technology, such as body shaping and 3D somatosensory games. Honor President Zhao Ming even improvised a "dance" on the spot, and the virtual image YOYO achieved real-time motion function capture with the support of the TOF lens group and AREngine.

However, Zhao Ming also admitted that the current "rivals" in the mobile phone industry are doing similar things to each other. After a good technology is launched, it will be quickly followed up in three or even two months. The new strategies and methods will also be quickly learned. Many manufacturers have launched Internet brands, e-commerce brands, and even dual, triple, and quadruple brands. The better quality experience also makes the replacement cycle of mobile phones longer.

"The original mobile phone replacement cycle was 15 to 18 months, but now our phones are 24 months or even higher," Zhao Ming told reporters.

The market will still be full of variables next year

In the second half of 2018, China's smartphone market entered a turning point.

According to GfK data, market sales in the third quarter fell 18% year-on-year, sales revenue fell 9% year-on-year, and the domestic mobile phone market saw a "fall in both volume and price" phenomenon for the first time.

Another research organization, Counterpoint, also said that in the second half of 2018, the Chinese smartphone market has not rebounded, and the overall sales are not optimistic. Data shows that in the third quarter of 2018, although the overall market rose 6% month-on-month due to the stimulus of new product releases, it fell 13% year-on-year. This is the fourth consecutive quarter of year-on-year decline in the Chinese smartphone market. The weak macro-economy and the extended replacement cycle of consumers are the main reasons for the continued downturn in the overall Chinese market.

And this situation may continue into next year.

Luo Zhongsheng, who once served as vice president of ZTE and CEO of Coolpad Overseas, said that the head effect in the mobile phone industry is already very obvious, and the industry reshuffle is almost complete. Huawei, Xiaomi, OPPO, and vivo have a market share of more than 85% in China. With Apple's market share, all other mobile phone manufacturers have less than 5 points of market share. The four dominant players will continue for at least 2 to 3 years.

"Under the current situation, any small and medium-sized brand's excessive investment, excessive market goals, and too fast expectations of success are irrational and involve huge business risks. The most rational way is to stay dormant, survive, control scale, control expenses, and control costs, and make comprehensive arrangements in products, technology, markets, brands, and ecological chains. Waiting for opportunities is the fundamental thing." Luo Zhongsheng told reporters that in the next three years, the global mobile phone market capacity should decline by about 10%, but will still remain at a scale of about 1.3 billion to 1.4 billion. In other words, the mobile phone market is still a huge market.

Zhao Ming told reporters that the current mobile phone market may not necessarily be the most difficult time, but looking back, it may not feel like a difficult period. "In the middle of 2017, we foresaw that the development of Chinese mobile phones would encounter a bottleneck period, and we also saw that globalization was a chess game for the Chinese market. Without the global market, the development of the Chinese market would also encounter bottlenecks. If there is only the global market, there will be problems if the Chinese market does not have enough support. Therefore, Honor has increased its overseas investment since 2018." Zhao Ming expects that the overseas market will grow by more than 150% this year, and the overseas market will account for 20% to 30%. In the future, the proportion of overseas markets will be further increased.