In 2020, the mobile phone giant will be reinstalled and "launched"

In the spring of 2020, the online channels of the mobile phone industry were once again "bet on".

I remember that the sudden appearance of Xiaomi mobile phone in 2011 made Internet mobile phone an important outlet, and then the online channel of mobile phone also became a hot commodity in the industry. For a time, many mobile phone manufacturers that dominated the offline market began to rush into the online market. In the following years, the online market gradually became saturated, and the new retail strategy became a new hot spot. Mobile phone manufacturers began to re-deploy offline channels.

Whether it is new retail or online marketing, February and March of each year are very important time nodes for mobile phone companies. The flagship products of major brands in the first half of the year are often officially unveiled at this time.

Just one year ago (February 20, 2019), Xiaomi Mi 9 was officially released; on February 28, the Chinese version of S10 was officially released; on March 2, iQOO was officially released; on March 6, Meizu Note9 was officially released; on March 8, Black Shark 2 was officially released; on March 19, vivo X27 was officially released; on March 26, Huawei officially released the P30 series…

Every time a new product is launched, it is accompanied by a grand press conference, and the scale is getting bigger and bigger, with celebrities, fans, and dealers coming to support it. But this year, the battle situation faced by many mobile phone companies will be different.

Online release will become the "standard" this spring

Under the epidemic, avoiding crowds has become a consensus among the people. Therefore, online releases will become a common choice for mobile phone companies in the near future. At present, Honor has officially announced that the first press conference of the new year will be held online. In addition to Honor, there are reports that new product launches of brands such as Black Shark and Xiaomi will also be moved online.

On February 2, Black Shark CEO Luo Yuzhou solicited suggestions for online press conferences on Weibo. According to digital blogger @数码闲聊站, other new phones scheduled to be released in February will basically be held online.

For mobile phone companies, it doesn’t matter whether new products are released online or offline. In the past, when offline press conferences were held, only a few fans were able to go to the scene, and the vast majority of followers still watched through online live broadcasts. It has long been a common practice for relevant platforms to simultaneously broadcast press conferences.

The only difference now is that the heads of mobile phone companies such as Lei Jun and Zhao Ming have to switch from facing the live audience to looking directly at the live camera. In this regard, relevant communication industry experts told Dongdong Notes: "Online releases will not have much impact, but when all companies release online at close intervals, there will still be some challenges for the innovation of the press conference format. In addition, from another perspective, the cost of switching press conferences from offline to online may be relatively lower, and the format of the press conference will not hinder the market performance of the product."

Obviously, online releases test companies’ innovation in presentation format and their online marketing capabilities. However, under the epidemic, the tough battle for mobile phone companies is not online releases, but changes in sales and supply chain markets.

In the past year, the two focuses of mobile phone companies have been 5G and new retail.

In terms of 5G communication technology, with the rapid implementation of related infrastructure construction, leading mobile phone companies have also released new 5G phones. The live broadcast of the construction of Wuhan Huoshenshan and Leishenshan hospitals, which tens of millions of netizens have followed online in recent days, has also adopted 5G networks.

In addition to the technical level, the new retail in the offline market is the top priority for mobile phone companies. In the past, the most direct manifestation of the new retail strategy was the opening of a large number of offline mobile phone experience stores (retail stores) across the country. Under the epidemic, these physical stores opened in key commercial areas are undoubtedly the most directly affected.

So, how will the already sluggish global mobile phone market respond to the negative impact of offline stores?

Online efforts, offline contraction

On February 1, Apple officially announced that it would temporarily close 42 retail stores in mainland China until 24:00 on February 9. In addition to retail stores, it will also close all offices and call centers in mainland China. In this regard, some media analyzed that although the closure of retail stores will not have a substantial impact on Apple's annual revenue, it may cause the delay of up to 1 million iPhone sales.

In addition to Apple, smartphone companies such as Samsung, Xiaomi, and vivo have also stated that they will temporarily close some offline direct sales channels.

We might as well use Apple's 1 million mobile phones as a benchmark to calculate the possible losses of various physical channels. Currently, Apple has a total of 42 Apple stores nationwide. Since Apple stores have one of the best sales per square meter in the industry, domestic brands have a significant gap in sales per square meter in offline retail channels. However, in terms of quantity, they are basically dozens of times or even dozens of times that of Apple. Even if the offline direct sales channels of domestic brands are not completely closed, the sharp drop in customer flow and sales losses caused by the epidemic are likely to far exceed this "1 million units."

Previously, the analysis firm Strategy Analytics released a report stating that global smartphone shipments in 2020 will be 2% less than expected, and smartphone shipments in the Chinese market will be 5% less than expected, especially in the first quarter, with shipments expected to decline by more than 30%.

In addition, Tianfeng Securities analyst Ming-Chi Kuo also predicted that due to the impact of the epidemic, domestic mobile phone shipments during the 2020 Spring Festival will decline by about 50-60% year-on-year, which will lead to a high inventory of 50-60 million units in the current channels. Annual shipments are expected to decline by 15% to 310-330 million units.

In this regard, a relevant communications industry expert told Dongdong Notes: "Although the online channels of mobile phones in the mobile Internet market have grown very rapidly, judging from the data of the past few years, the proportion of offline channels is still higher than that of online channels. The offline channel market has been most directly affected by this epidemic. The decline in shipments in the entire mobile phone industry is certain, but the specific figures are still difficult to determine."

The source stressed that whether it is 15% or 30%, it is a very large number. "If such a huge decline really occurs, the impact on the entire mobile phone market will be very serious."

Be prepared for a protracted war

Lei Jun once expressed a point of view to the outside world: "In the mobile phone industry, only those who die from overeating will die, not those who starve to death. Inventory determines the life and death of mobile phone manufacturers." As Lei Jun said, high inventory turnover has always been the core competitiveness of mobile phone companies.

The smartphone industry has developed to a point where the supply chain system is already stable and mature. Brands rely heavily on upstream and downstream supply chains in terms of both technological innovation and mass production. What worries industry insiders is that the epidemic is not only affecting the retail end, but also the vast majority of labor-intensive supply chain companies will also be affected to varying degrees.

Previously, a number of smartphone component suppliers and related OEM companies including Foxconn, Inventec, and O-Film have stated that the resumption of work after the holiday will be postponed to February 10.

Xiaomi Group Vice President Lu Weibing previously revealed on Weibo: "The impact this time may be relatively large. In the short term, it is the impact on consumption, in the medium term, it is the impact on supply chain coordination, and in the long term, it is the impact on purchasing power."

As Lu Weibing said, the "consumption impact" of consumers' reluctance to go out has begun to emerge, and if this situation continues, mobile phone companies will have to make adjustments. The closely related supply chain will also make corresponding adjustments. At this time, the mobile phone industry is tested on the ability of all parties to coordinate: how to ensure supply without large-scale inventory backlogs under the continuous adjustment of supply and demand.

After crossing this level, the final test is not only facing the mobile phone industry itself, but also has a more far-reaching impact on ordinary consumers. Any mobile phone company with a long-term vision must make a clear judgment on how to deal with the changes in consumer purchasing power in the long term? What positive responses should the company make at the product and marketing level?

In this regard, relevant communication industry experts told Dongdong Notes: "The most important task for leading mobile phone companies at present is to digest inventory while expanding online channels and doing a good job in online marketing. In short, facing the current market situation, any company must be prepared for a protracted war."

【Conclusion】

When the catering and tourism industries have already faced huge challenges, all industries will have to face the next challenges and difficulties. On the positive side, mobile Internet, including remote office and teaching applications, will continue to generate strong demand, and the maturity and popularization of 5G technology will also bring about a wave of phone replacement, which is an important opportunity for the mobile phone industry in the first half of this year.

Of course, no matter how the external environment changes, the ultimate competitiveness of enterprises still depends on products, and product strength is the basis of all competition. Especially when offline channels are blocked and online channel competition intensifies, only mobile phone brands that come up with sufficiently excellent products have the possibility of standing out.