From 4G to 5G, who can advance step by step in the Chinese mobile phone market?

The picture comes from "Yiou.com"

Apple's innovation is weak but its sales are still strong; Huawei's products are far ahead, but it has lost the European and American markets due to US sanctions; Apple's weakness and Huawei's restrictions have given Samsung an opportunity; Xiaomi's market in China is weak and its overseas market is growing, but it still hasn't gotten rid of its low-end image; OPPO and vivo are moving more steadily...

At the 5G era, the mobile phone industry is undergoing a transformation. Looking back, at every turning point in the industry, there are multiple factors that influence the direction of a company or a brand, including its own technology and innovation, as well as how to keep pace with the market, and of course, the performance of competitors.

In the third quarter, major manufacturers launched new products in a lively manner, increasing the pace of new product releases, and their product lines became richer and more comprehensive. Among them, Apple and OPPO have not yet released 5G mobile phones, while Huawei, Xiaomi, and vivo have already launched more than two 5G mobile phones, and some 5G mobile phones have already reduced their prices to less than 4,000 yuan.

Dongdong has read a lot of data recently. For example, Tmall’s data shows that 75% of users who are interested in 5G at this stage are male. China Unicom’s data shows that if 4G and 5G of the same model are released at the same time, most people will choose 5G phones, and 4G phones will be unpopular. According to the data of the China Academy of Information and Communications Technology, the total shipments of the domestic mobile phone market in August were 30.875 million units, of which 5G phones accounted for only 219,000 units, far less than 1%...

It can be seen that at this stage, the consumer psychology of users is also very complicated. Most users are still in a waiting-to-buy mentality for 5G. Huawei, Xiaomi, and vivo have taken some advantages in 5G, and Apple and OPPO are also safe. It is still difficult to say who will truly win 5G.

Apple changes its "character", from "innovation endorsement" to "cost-effective trump card"

September is the month when all manufacturers release flagship and high-end phones intensively. Apple is of course one of the main highlights of this month. As a result, Apple's new phones are quite disappointing, and consecutive generations of new phones have made users feel that they lack innovation. The absence of 5G in the iPhone 11 makes its future even more uncertain, but its way of lowering the selling price can be regarded as a major change. The purpose of reducing prices is to "save the market" and maintain market share before 5G phones come out.

In fact, not only did the price drop, but the price of this generation of Apple's new phone fell on the day of its release. The information obtained by Dongdong Notes from the channel is that Apple deliberately lowered the price. Obviously, Apple, which has always been arrogant, has now had to use the "price" lever.

After the release of Apple's new phone, Xiang Changfeng, co-founder of Zhuanzhuan and general manager of the 3C business group, predicted: The price reduction of iPhone 11, the counterpart of iPhone XR, is an obvious cost-effectiveness improvement, which should help Apple regain some market share; and the launch price of iPhone 11 Pro at US$999 is consistent with last year's counterpart iPhone Xs and 2017's counterpart iPhone X, and the Max version still costs over ten thousand, which seems to bring sales pressure to Apple.

In line with his prediction, Apple, which has lost its innovative label, has also seen users’ interest in its high-end products waning—if you must buy one, buy a cheaper one. Apple has adjusted its orders for the iPhone 11 Pro Max, reducing them by about 10% from the previous level, mainly because the price is too high and users have little motivation to upgrade. At the same time, the orders for iPhone 11 and iPhone 11Pro have been increased.

After the release of the iPhone 11 series, the prices of previous Apple phones dropped. Currently, the price of iPhone XR on the official website has dropped to 4,799 yuan, and the 64GB iPhone8 is as low as 3,499 yuan. On third-party channels, the price of 64GB iPhone XS has dropped to 7,299 yuan, and the price of 64GB iPhone Xs Max is 7,899 yuan.

After the iPhone 11 was launched on the market with a low price strategy, it performed well in terms of sales data, which also indirectly boosted the activity of Apple models in the second-hand mobile phone market. The "2019 Third Quarter Mobile Phone Market Report" (hereinafter referred to as Q3 "Zhuanzhuan Mobile Phone Market") released by the second-hand trading platform Zhuanzhuan shows that the platform search volume and transaction volume of some second-hand iPhone models have also jumped simultaneously.

At the same time, the transaction prices of second-hand iPhones such as the new iPhone Xs and iPhone Xs Max on the Zhuan Zhuan platform have also increased to varying degrees. The iPhone Xs Max has increased by as much as 600 yuan. Analysts at Zhuan Zhuan Premium Research Institute said that Apple's declining innovation over the years has also made older models more popular, and the second-hand market for Apple has become increasingly hot.

Although the prices of some second-hand Apple phones have risen, we can also see a clear trend: older Apple phones with high cost performance are more popular. The above Q3 Zhuanzhuan mobile phone market shows that the value retention rates of iPhone XR, iPhone Xs and iPhone Xs Max, which have the same notch screen as the new iPhone, are all over 50%, at 61.5%, 55.2% and 59.9% respectively. Since iPhone X was Apple's product two years ago, although its value retention rate is only 48.9%, its performance and configuration are not inferior to the new models. Therefore, second-hand iPhoneX is the most popular among users because of its price advantage.

Analysts at Zhuanzhuan Youpin Research Institute said that the high value retention rate of iPhone XR is mainly due to its more practical configuration and cost-effectiveness. Among the three models released last year, although iPhone XR has some "concessions" in configuration, it is also equipped with A12 processor. In actual use, the performance has not declined too much, and its price is the most affordable compared to the other two products of the same period. Therefore, for Apple fans, if they cannot buy a new Apple phone in the short term, iPhone XR is also a good choice.

To be honest, whether it is the data of new phones or second-hand phones, we can see a trend: In the past, users were more concerned about what innovations Apple has, but now they are more concerned about Apple's price. When Apple is labeled as "cost-effective", isn't it a kind of sadness?

Apple's fate is still unclear, and it looks like a very distorted state. When the new machine was released this year, users complained that there was no innovation and that Apple was lagging behind. In addition, this generation of machines is also the first time that Apple has released a new machine at a price reduction. Except for a few colors, it still broke the price as soon as it was sold. From these perspectives, it seems that Apple has entered a downward channel. But on the other hand, amid the complaints, the sales of this generation of machines exceeded expectations, and Apple has been increasing production orders. At the same time, it also drove up Apple's stock price, and its market value once returned to the top position in the world.

However, Apple is probably not only worried about the high opening and low closing prices of the iPhone 11 series. The encirclement and suppression of domestic mobile phone brands still makes Apple "besieged on all sides" in the Chinese market. Q3 "Zhuanzhuan Mobile Phone Market" shows that in the third quarter, domestic mobile phone brands continued to release low-end and mid-range models in July and August to "seek market share with price", but in September they intensively launched various flagship models and 5G new phones to comprehensively seize more market share.

We have to admit that Apple's failure to release a 5G phone is not entirely because it believes that 5G is not mature or the timing is too early, but it is an indisputable fact that Apple has not mastered the 5G chip. The industry generally expects that 5G phones will be released more frequently in the first half of next year, and the price of 5G phones will be around 2,000 yuan, which will accelerate the popularization of 5G. If Apple follows the traditional release rhythm and releases the first generation of machines in September next year, it is very likely to miss the opportunity.

Dongdong believes that price is the last lever Apple can use when innovation is lacking. Although the sales of this generation of machines are still good, if the mediocrity continues, the role of price leverage will eventually fail.

Domestic brands compete for 5G market share, but value retention rate needs to be improved

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In July, August and September, domestic mobile phone manufacturers held press conferences very frequently. According to the Q3 "Zhuanzhuan Mobile Phone Market", domestic brands mainly focused on releasing mid- and low-end phones in July and August. For example, Xiaomi chose to launch the Xiaomi CC9 with a starting price of 1,799 yuan in July and the Redmi Note 8 series with a price of 999 yuan in August. In September, domestic brands set their sights on the 5G mobile phone market. In addition to the highly anticipated Huawei Mate 30 5G version, vivo also released the NEX 3 5G with a starting price of 4,998 yuan. Xiaomi released two mobile phones at once, the Xiaomi 9Pro 5G version and the Xiaomi MIX Alpha.

Previously, Zhuanzhuan analysts believed from platform data analysis that "the wave of 5G mobile phone replacement will not come too early", and this prediction was verified today. Operators' 5G network deployment has just begun, and network coverage is still poor. The three major operators announced in the third quarter that they would postpone the release of 5G packages to October.

For this reason, users are very interested in 5G mobile phones, but they are slow to adopt them. Although a large number of 5G mobile phones have been released, they have not injected vitality into the mobile phone market, and the overall new phone market is still weak. According to data from the China Academy of Information and Communications Technology, the total shipments of the domestic mobile phone market reached 30.875 million units in August, a year-on-year decrease of 5.3%. All parties believe that at least until the first half of next year, mobile phones will still be a competition in the stock market, and the peak of phone replacement may really start in the second half of next year.

As a new thing, it is inevitable that the price will be high, and due to the limitation of spare parts, some models have a small supply. This also leads many users to choose to try it on second-hand platforms. The Q3 "Zhuanzhuan Mobile Phone Market" shows that in the second-hand mobile phone market, models such as Huawei Mate 20 X, vivo iQOO Pro, ZTE Axon 10 Pro, and vivo NEX 3 5G have received a high degree of attention. vivo IQOO Pro 5G, Samsung Note10+ 5G, and vivo NEX 3 5G version have become the top 3 models in 5G mobile phone transaction rankings. From this data, we can see that the rush of manufacturers to launch 5G mobile phones has more or less a pulling effect on the brand, and it has occupied a place for 5G in the hearts of users. At the same time, among the many manufacturers that have released 5G, Xiaomi's 5G products have not attracted much attention in the market because they were released late.

After a round of intensive releases of new phones, sales of major brands' second-hand phones and second-hand markets have also become active. However, unlike the price increase of some second-hand Apple phones, domestic phones, whether second-hand or second-hand, have generally shown a downward trend in prices (as shown below). For example, the Q3 "ZhuanZhuan Mobile Phone Market" shows that the price of a new Huawei P20, which has a very good reputation, is 2,599 yuan, but on ZhuanZhuan, the second-hand price is only 1,880 yuan, a drop of 28%.

As can be seen from the figure below, only two models have seen an increase in price, one is the Xiaomi 9 second-hand mobile phone, and the other is the vivo iQOO second-hand mobile phone, while the others have declined significantly. In terms of value retention, Huawei Mate series and Xiaomi digital series are better.

In the second-hand mobile phone market, users generally pursue cost-effectiveness. From the Q3 "Zhuanzhuan Mobile Phone Market", it was found that second-hand Xiaomi mobile phones became the number one domestic mobile phone transaction volume, and Xiaomi 8 became the top 10 hot search models.

Overall, the second-hand mobile phone market is still dominated by mid-to-high-end models. The domestic flagship models with high transaction volume on the Zhuanzhuan platform are also domestic flagship models released in the past two years, such as Xiaomi 8, vivo X21, Honor 10 and OPPO R9.

In this regard, analysts at Zhuan Zhuan Premium Research Institute believe that high-end models not only have high residual value, but are also more cost-effective after removing the premium, so this new model of second-hand domestic models is generally popular.

However, Zhuanzhuan analysts also pointed out that although domestic brands have returned to the high-end market, the improvement in the mobile phone market has not been obvious. From the perspective of mobile phone consumption, high performance is not the only pursuit of consumers. More Chinese consumers are still sensitive to price and still focus on cost performance when purchasing mobile phones. Therefore, second-hand high-end mobile phones with great price advantages have become a new choice.

Here, Dongdong would like to add a point of view: residual value (value retention rate) is a data that manufacturers should pay special attention to. We know that when users buy new products, they often consider the value retention of this product.

One of the important reasons why Apple has been selling well for a long time is that its products retain their value. Second-hand mobile phones can be sold at a relatively reasonable price. At the same time, the value retention rate can also indirectly prove the quality of a brand and product. Through the residual value, we can see the value of a brand.

From this point of view, there is still a certain gap between domestic mobile phones and Apple. In the past two years, Apple has declined and its brand tone has lost its innovative color, while domestic mobile phones have made continuous breakthroughs in technological innovations such as photography, AI, video, and fast charging, and their reputation and brand awareness have been continuously improved.

In fact, some domestic mobile phones have surpassed Apple in terms of performance, but brand recognition still needs a process of sedimentation and accumulation. This also requires long-term and continuous efforts from domestic brands.

In fact, brand building often lags behind technological capabilities. So Apple should also be wary of the fact that although the brand influence is still there, users have begun to lose confidence and patience. If Apple cannot show some sincerity, brand awareness will further decline. Apple, the future variables will also be one of the biggest variables in the industry.

The popularity of second-hand mobile phone transactions and the residual value of mobile phones can show the changes in a brand's value, which is also a key indicator on the eve of 5G. Through the price trend and demand heat in the second-hand market, we can reflect on its brand value and its competitive position when 5G is launched, and make a more accurate prediction of market competition.