In recent years, with the surge in brands and models in the Chinese smartphone market, competition has become increasingly fierce. After the rapid development of the mobile phone market in recent years, the scale of the domestic mobile phone market has become increasingly saturated, and the overall shipment volume has continued to decline. On October 30, market research firm Canalys released a report on the third quarter market share of China's smartphone market. The report shows that in the third quarter, China's smartphone market shipments reached 97.8 million units, a slight increase from the 97.6 million units in the previous quarter, but still down 3% from the same period last year. Among them, vivo shipped 17.5 million units, and its market share fell to 17.9%. Compared with the same period in 2018, vivo's mobile phone sales fell sharply by 23%. Compared with the sharp drop in vivo's mobile phone sales, Huawei continued to maintain sales growth and seized a lot of vivo's market share. It can be said that more and more young people are giving up choosing vivo mobile phones, and vivo has gradually been abandoned. The aftermath of "high price and low configuration" Nowadays, people are learning more and more about mobile phones while playing with them. It is precisely because consumers know more about mobile phones that they know vivo’s biggest routine “high price and low configuration”, which is to sell at a higher price with a lower configuration. This is vivo’s most typical marketing strategy. Vivo's previous practice of selling MediaTek's mid-range U at the price of Qualcomm's high-end U, hiring young celebrities as spokespeople and providing overwhelming publicity and advertising, has forced Vivo to price its phones high due to its high-cost marketing model. So after each new phone launch, you can always see comments online saying "vivo has high prices and low specs". For a long time, vivo's mobile phones have been negatively labeled as "high price and low configuration". Because of this, vivo phones have rarely mentioned cost-effectiveness, and vivo consumers rarely buy phones for their configurations. Therefore, the selling point of vivo phones has never been cost-effectiveness, but rather appearance, HIFI, and photography. However, with the changes in the market, HIFI is no longer popular. Vivo, which lacks cost-effectiveness and a flagship, released a smartphone, vivo iQOO, on March 1, focusing on the high-end market. It hopes to get rid of the label of "high price and low configuration" with IQOO. But just when everyone thought that vivo was starting to take the cost-effective route, vivo released the latest model of the S series - vivo S5 on November 14, focusing on appearance and photography. The new phone's initial price starts at 2,698, and it invited popular young actor Cai Xukun as its spokesperson to target the female market. Except for the high-looking perforated screen on the front, the other designs of this vivos5's hardware configuration are really mediocre. In terms of camera, as a mobile phone focusing on photography, the vivo S5 is very disappointing. The quad-camera on the back uses a combination of 48-megapixel main camera + 8-megapixel ultra-wide-angle + 5-megapixel depth of field + 2-megapixel macro, and the 32-megapixel single camera on the front is even worse. Judging from the parameters alone, this level is obviously not enough. In terms of performance, the Snapdragon 712 processor is equipped with 8+128G of large memory, which seems too redundant for such a processor. In terms of battery life, the vivo S5 has a built-in 4100mAh battery and supports 22.5W fast charging, and its performance is not outstanding either. For a mobile phone like this that has no highlights except its appearance, there is absolutely no need to buy a mid-range performance mobile phone at a flagship price unless you want it for aesthetics or to pursue the star effect. Jianghu Lao Liu's team believes that vivo's current situation seems to have not completely gotten rid of the label of "high price and low configuration". With the influence of the early market, vivo's current "aftermath" is that it is difficult to gain consumers' trust even with "high configuration and low price". At the same time, it also reduces consumers' expectations for products, causing more and more people to abandon vivo. Speeding up 5G cannot hide its shortcomings As market competition becomes more brutal, all major flat-panel brands hope to take advantage of the 5G era to break the situation and seize more 5G market share. According to the data on China's 5G mobile phone market share released by IDC in the third quarter of 2019, vivo, Samsung and Huawei took the top three spots and accounted for 92.8% of the market share, among which vivo had the largest share, exceeding 50%. As for vivo's market share advantage in the 5G mobile phone market, it actually doesn't make any sense. The Huawei Mate30 series 5G mobile phones are priced from 4,999 yuan, Samsung's Galaxy Note10+ 5G is priced at 7,999 yuan, and the Galaxy A90 5G is priced at 4,999 yuan. vivo's iQOO Pro 5G version is priced at 3,798 yuan and the NEX3 is priced at 5,698 yuan. In terms of price, vivo's biggest competitive advantage compared to Huawei and Samsung is that it is cheap. At the same time, there is a big problem that vivo's vivo NEX 3 and iQOO 5G only support NSA (5G non-independent networking), not SA (5G independent networking), and both use external 5G baseband chips. The Ministry of Industry and Information Technology has made it clear that from January 1, 2020, 5G terminals applying for network access should, in principle, support both independent networking and non-independent networking (SA and NSA), but vivo's two 5G mobile phones are not dual-mode 5G. Without timely support for 5G dual-mode, low prices will not provide vivo with lasting competitiveness in the 5G market. However, apart from mobile phone companies like Huawei that have the ability to design 5G chips, the only one left is Samsung. However, Huawei currently does not sell Kirin chips to the outside world, so vivo can only seek help from Samsung. On December 16, vivo released the vivo X30 series, which uses a 6.44-inch ultra-small hole XDR screen on the front, equipped with a Samsung Exynos 980 processor, integrated with Mali-G76 MP5 GPU, and supports SA/NSA modes (5G dual-mode). Many users said that the vivoX30 series is a Samsung mobile phone resurrected in a shell. The screen, SoC, storage, and CMOS are all from Samsung, and the Samsung Exynos 980 is still in the previous generation in terms of manufacturing technology. There are concerns about heat and power consumption, and the CPU and GPU performance are also worrying, and it does not support 5G millimeter wave technology. The vivo X30 series is positioned as the "5G professional imaging flagship model", which is the biggest innovation of this phone. VIVO x30 uses a camera module, 800w ultra-wide-angle plus 1300w periscope lens, which is better than some ordinary mobile phones. But in fact, the general public doesn’t care so much about the camera function, so for the price of more than 3,000, the advantage compared with other brands of mobile phones is really not very obvious. Jianghu Lao Liu's team believes that although vivo currently has an advantage in the 5G market, without real technology, the short-term lead relying solely on price advantage will not last long. Competition in the 5G market will only become more and more fierce, and the competition in the future will still be about core technology. For the vivo X30, the first "true 5G mobile phone", its sincerity is mediocre. Only when it has truly excellent technical core and configuration, the ability to take pictures will be icing on the cake, and consumers will pay for it. Offline "cake" competition is fierce The sharp drop in vivo's sales and popularity reflects the cruel reality of the fierce competition in the current mobile phone market and the increasingly saturated market. While competition is fierce, user demand has become saturated. The frequent appearance of new phones in the market is difficult to impress consumers. Therefore, not only has vivo's sales volume declined, but the sales of most manufacturers have also declined. Offline data also clearly reflects this feature. According to public data statistics, the overall sales volume of offline channels in September fell by 15.25% compared with the same period last year, and vivo fell by 27.97% year-on-year. Among the market shares of various mobile phone brands, Huawei accounted for 40.66%, an increase of 9 percentage points over the same period last year; vivo accounted for 13.25%, ranking second, a decrease of 2.4 percentage points over the same period last year. Huawei has maintained an outstanding growth rate under such circumstances. The reason is that Huawei has continuously increased its investment in mobile phone research and development and used technology to retain users. This is difficult for vivo to do as they are good at publicity and marketing, which is indeed not feasible now. Vivo's strong sales volume previously lay in its sales channels. In the early days, all major brands were competing fiercely online, but Vivo has been focusing on offline stores, from first-tier cities to various towns, and has mastered powerful channels, and eventually spread offline stores all over the country. But now, as online brands have gradually stabilized, major brands have begun to eye the offline market. In recent years, Huawei has been focusing on offline business, especially in third- and fourth-tier cities, opening stores, most of which are located near vivo. This has not only created huge competitive pressure on vivo, but also "grabbed people" with more competitive products. It has even launched a nova series of mobile phones specifically for taking pictures to attract young women in the mobile phone market. In terms of cost-effectiveness alone, its cost-effectiveness is better than that of vivo. Jianghu Lao Liu's team believes that as more and more brands join the offline competition, especially in recent years as the mobile phone market has become saturated and more and more consumers understand the configuration of mobile phones, etc., the rise of Huawei is bound to swallow up vivo's share. It is inevitable that vivo will lose its sales advantage, and the competition for the market will only become more intense. With the overall smartphone market in a downturn, competition in the smartphone industry will only become more and more fierce. Brand premiums will be difficult to increase, and domestic users generally consume at the mid-range level. The high-end market for high-configuration phones has always been dominated by Huawei and Apple. Vivo's price-performance ratio is indeed not high. Even if it has configurations, the price has gone up. Therefore, vivo needs to rethink its strategy in the cost-effective mobile phone market. If it wants to maintain its position, it can only go further, otherwise it will be abandoned by more people. Jianghu Lao Liu is a TMT industry observer, social e-commerce industry analyst, and well-known IT commentator. |
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