Three major trends in smartphones in 2022: shrinkage, price cuts, and squeezing

At the beginning of last year, Huawei, once the leader of the domestic mobile phone industry, saw its shipments plummet due to complex factors, and it also gave up its top spot in the Chinese mobile phone market. Faced with this huge market share, other smartphone manufacturers thought they could expand their opportunities, but judging from Huawei's performance at the end of the year, it is no surprise that Huawei's outrageous performance has given Apple, its biggest competitor, a big advantage.

Since the release of the iPhone 13 series of mobile phones, it has topped the sales crown in the Chinese market many times. At the same time, the older iPhone 12 series also relied on its price advantage to sweep the market in traditional promotional seasons such as 618 and Double 11, leaving a number of "Android flagships" unable to resist.

(Data as of November 3, 2021)

At the beginning of 2021, based on the fact that vivo, Xiaomi, and OPPO were the monthly champions in the first quarter of the Chinese mobile phone market, we concluded that "the Chinese mobile phone market will usher in an era of rotation", but it is obvious that the current situation has become "Apple has won and is the only one standing out". In 2022, the Chinese smartphone market has returned to the situation of "fighting the boss" many years ago. How will Chinese mobile phone manufacturers respond to the "big boss" Apple?

Here, Xiaolei boldly predicts that 2022 is not a crucial year for decisive battles, and the overall competition landscape will not change much compared to the second half of 2021. But at the same time, 2022 is also a critical year. In this year, some technologies will complete the process from "exploration" to "maturity", and at the same time, the reserves of mobile phone manufacturers in areas such as chips will become increasingly perfect, laying the foundation for future outbreaks. In short, 2022 is a year for Chinese mobile phone manufacturers to accumulate strength.

The "chip war" will enter the halftime stage

Although one of the annual themes of 2021 is "chip shortage", in fact, the smoke of the chip war in the mobile phone industry has been burning from the beginning of the year to the end of the year. At the beginning of 2021, Xiaomi took the lead in announcing the latest work of the Pengpai chip C1, which focuses on image algorithm enhancement; Coincidentally, the vivo self-developed chip V1, which debuted in the fall, also focuses on image algorithm enhancement. At the end of the year, at the OPPO Future Technology Conference, the self-developed chip "Mariana X" officially debuted, and its main function is still to enhance the image algorithm.

In just one year, the top three domestic mobile phone manufacturers simultaneously announced or released self-developed chips, among which Xiaomi and vivo installed them as soon as they were announced, which is very efficient. In Xiaolei's opinion, the domestic leading manufacturers rushed to launch self-developed chips in 2021. In addition to coincidental factors such as R&D progress, they are more targeting the opportunity of the absence of benchmark models in the high-end market, hoping to use the label of "self-developed chips" to boost and impact the high-end market.

Unfortunately, judging from the data, the results are unsatisfactory. The "Buff" of the self-developed chip is effective, but not obvious.

According to data released by Strategy Analytics, the ranking of the Chinese smartphone market in Q3 2021 is vivo, OPPO, Honor, Xiaomi and Apple, and the gap between them is not too big; the data for the Chinese market in Q4 2021 has not yet been released, but global data released by Canalys pointed out that Apple has become the world's best-selling brand, mainly due to the hot sales of the iPhone 13 series in the Chinese market.

(China market data for Q3 2021)

By studying the market data, it is not difficult to find that no matter in Q3 or Q4, the ranking of domestic mobile phone brands does not seem to be affected by self-developed chips. Most consumers still choose mobile phones based on inertial thinking. Otherwise, it cannot explain why OPPO, which has not yet launched products with self-developed chips, can rank second and Honor ranks third, both surpassing Xiaomi; it cannot explain why Apple was able to perform so well in Q4 and make the iPhone the global sales champion.

(2021Q4 global market data)

Xiao Lei believes that the reason why self-developed chips have failed to significantly help mobile phone manufacturers to impact the high-end market is also very obvious: insufficient added value and insufficient appeal to consumers.

From the above, we can see that the self-developed chips launched by Xiaomi, vivo and OPPO are all focused on the imaging level. When they were promoted, their technological content was not as good as Huawei's HiSilicon Kirin SoC. As we all know, how can a small ISP-level chip compare with the SoC, the brain of a mobile phone, in terms of technological content?

On the other hand, although it is advertised that self-developed imaging chips can enhance the imaging capabilities of mobile phones to a certain extent, with the substantial upgrade of the industrial chain and the great improvement of hardware level, the lower limit of the imaging capabilities of conventional flagship mobile phones is already very high. In the eyes of most consumers, the improvement in picture quality or experience brought by self-developed chips is probably not very obvious.

It is not difficult to see that although the major manufacturers launched their own imaging chips due to demand, everyone with a discerning eye knows that it is a stopgap measure. If they have the ability to directly launch commercial self-developed SoCs, why would they only be satisfied with ISP-level small chips?

How will mobile phone manufacturers adjust when the self-developed chips are not as eye-catching as expected? Xiao Lei believes that they will become more low-key in 2022, and may not even release any new self-developed chips, and quietly "hold back their big moves."

In fact, this is also the reason for the chip R&D cycle. Although domestic leading manufacturers are capable of launching self-developed chips, they are naturally no match for traditional chip giants in terms of R&D strength. It is obviously unrealistic to require them to maintain the rhythm of "annual update" to launch chips.

Based on various circumstances, Xiao Lei estimates that the enthusiasm for self-developed chips in the industry will be greatly reduced in 2022. There may be some progress and news revealed, but there may not necessarily be new products updated step by step. But at the same time, mobile phone manufacturers' investment in chip research and development will not decrease, and may even continue to grow. Although 2022 is unlikely to be the day of the decisive battle in the chip war among major manufacturers, it is also a critical reserve stage. When the troops are strong and the time is ripe, the chip war between domestic mobile phones will break out. At this time, manufacturers with poor chip performance or even no self-developed chips may really fall behind.

There is no "new technology", but there is a "new price"

Judging from the situation in 2021, it seems that the industry has completely entered an innovation bottleneck, and there is no eye-catching innovative technology at all. Xiao Lei recalled that almost no feature in 2021 can be called "new", whether it is the hotly discussed folding screen or under-screen camera, they are all technologies that have already appeared, but they have become more mature in 2021.

In 2022, this trend will continue. The "freshness" on smartphones will mainly come from "old friends" such as folding screens and under-screen cameras. It is estimated that it will be difficult for us to see any new breakthroughs in the design or form of mobile phones in the short term. On the other hand, after the industrial chain matures, the cost will inevitably drop further. Whether it is folding screen mobile phones or under-screen camera machines, we will see more of them, and the prices will drop.

Judging from the situation of foldable screen mobile phones in the past few years, the price of terminals has been declining, while the maturity of key technologies such as screens and hinges has been increasing. Take the three foldable screen new phones released not long ago, OPPO Find N, Huawei P50 Pocket and Honor Magic V as examples. The starting prices of these three products are all below 10,000 yuan. At the same time, they are equipped with water drop-shaped hinges and UTG glass, which makes foldable screen products further lower and are close to the pricing range of mainstream high-end flagship phones.

According to online leaks, the supply chain cost of foldable screen mobile phones will continue to decline in 2022. The vertical foldable screen mobile phone launched by OPPO in the future is likely to be priced close to the 5,000 yuan price range of conventional flagship mobile phones. Since then, the price decline of foldable screen mobile phones has been completed.

As for another "cutting-edge technology", the under-screen camera, it has generally had a bad start: although flagship phones such as Xiaomi MIX4 and mid-range phones such as ZTE AXON 30 have already used under-screen camera technology, their performance in terms of quantity and market share is relatively average.

There are two main difficulties with under-screen camera technology. First, the "screen door effect" has improved significantly but still cannot be eliminated. Currently, mobile phones using under-screen camera technology are obviously not as good as conventional products in terms of selfies. Between "full screen without openings" and "more practical and better front camera", I believe most people will choose the latter. Second, under-screen camera technology can only be used with 1080P screens, and the effect is obviously degraded on 2K or even 4K resolution screens. There is no commercial plan yet.

In general, the best carrier for the high-end technology of under-screen cameras is currently mid- and low-end mobile phones, because consumers who buy these phones, on the one hand, will not insist on high-resolution screens, and on the other hand, they have lower psychological expectations for selfie effects and will not be overly picky about imaging effects.

In short, the two technologies of folding screen and under-screen camera will still shine in 2022, and with the reduction of terminal prices and the improvement of product lines, the popularization of products will inevitably be accelerated. Unfortunately, from the current information, it seems that we will hardly see too many new things in 2022. If we have to say, can we look forward to the iPhone with a "pill" hole?

I won't be surprised by "squeezing toothpaste"

As for the third trend, there have been some discussions on the Internet earlier. Some netizens found that compared with the crazy stacking and "involution" of smartphones in early 2021, the series of flagship phones released in early 2022 seemed a bit mediocre in terms of configuration upgrades.

Why do I say this? Combining some of the latest released new flagships, such as Xiaomi 12, OnePlus 10 Pro, etc., we can see that so far, almost only the SoC of the new flagships has been upgraded following the pace of the supply chain, but other peripheral configurations such as screens, cameras, etc. can almost be said to have stood still, and the overall improvement is far less than in the past few years.

In fact, both the industry and consumers have noticed this trend, and topics such as "the configuration of smartphones will be worse in 2022" or similar topics frequently appear on some article platforms. Xiao Lei believes that the progress of smartphones at the hardware level is probably almost at an end. Even if major brands are "squeezing toothpaste" on mobile phone hardware throughout 2022, Xiao Lei will not be surprised at all.

Although squeezing out toothpaste on mobile phone hardware is a helpless move, the market changes brought about by this phenomenon may exceed our imagination: For those manufacturers who focus on hardware cost-effectiveness, how will they survive in the future? It is more difficult to gain a differentiated advantage in mobile phone hardware. How can mobile phone manufacturers impress consumers?

Perhaps, some established logic in the smartphone market may also be overturned in 2022.

Xiao Lei believes that at a time when the general improvement in hardware standards is not obvious, it is inevitable for mobile phone manufacturers to actively or passively turn to exploring "brand premium". Some manufacturers that have focused on the value of "hardware cost-effectiveness" in the past have suffered losses, so those manufacturers that have accumulated a certain brand premium will naturally gain an advantage.

In the market, Apple is naturally the most obvious brand premium and the most appealing mobile phone manufacturer in the market. On the other hand, although the iPhone entered the "toothpaste squeezing" stage earlier in terms of performance, it is undeniable that its core performance still has an absolute advantage in the industry. On the domestic manufacturers side, Huawei, OPPO and vivo in the first tier also have obvious brand premium advantages. Although Xiaomi is relatively weak, it is still far ahead of the second-tier manufacturers. This situation is obviously more unfavorable for mid- and downstream manufacturers.

In other words, it is difficult for mid-tier manufacturers to see any hope of a turnaround in the new year. Although manufacturers such as realme and iQOO can continue to accumulate strength with the power of their parent group and stage a "dark horse" counterattack, not all small manufacturers have such a backer.

Seeing this, the previous acquisition rumors of manufacturers such as Black Shark and Meizu seem to become reasonable. Under such a trend, it may be the best policy to withdraw.