Folding screens and 5G are just appearances. Mobile phone manufacturers have entered the era of "technology futures"

Seven or eight years ago, Internet brand mobile phones pioneered the futures model of "still out of stock half a year after release". Now, with "shipment volume" as the topic, executives are tearing each other apart online every day and never get tired of it.

After many years, it has become a new fashion to hold press conferences when new products have not yet been mass-produced and it is still unknown whether the technology can be implemented - this is technology futures.

The countless 5G mobile phones that are not connected to the Internet in the MWC exhibition hall and the folding-screen flagships of Huawei and Samsung hidden in cabinets are probably the biggest footnotes to this trend.

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1. How to define “technology futures”

It is difficult to define what constitutes a “technology futures”:

1. How long after an official announcement does a technology have to be put into mass production before it can be considered futures?
2. How much shipment can be considered as mass production in the strict sense;
3. What level of experience does a mass-produced machine have to reach before the technology can be considered mature.

Without accurate ranges for the three, it is hard to avoid being hurtful when we say a certain technology is a "futures". But 5G and folding screens are different. For example, no matter from which level, the folding screen phones Samsung Galaxy Fold and Mate X that may be sold in April and May this year can hardly be called finished products.

For example, the Samsung Galaxy Fold is 14mm thick when folded, has a 7.3-inch screen when unfolded, and has a battery capacity of 4,380 mAh;

The Huawei Mate X is 11 mm thick when folded, has an 8-inch screen when unfolded, and has a battery capacity of 4,500 mAh.

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For reference, the thickness of mainstream smartphones is about 8 mm, and the battery capacity of an 8-inch tablet is at 5500 mAh; whether it is the thickness in mobile phone status or the battery life in tablet status, folding screens are still some distance away from meeting the standards.

The structural changes brought about by the folding screen itself have a greater impact. Because it needs to be folded, Corning glass can no longer be used as a protective material for the screen surface (although Corning is developing flexible glass). Whether the temporary replacement plastic film + surface coating can meet the Mohs hardness of daily use, and endorse the surface anti-slip and body drop protection, these are not actual problems that can be replaced by the "tens of thousands of folds" advertised by manufacturers.

The yield rate of folding hinges and flexible screens is an important factor restricting product manufacturing. More than one report pointed out that the hinge, as an exposed, precise and repeatedly used mechanism, has become a difficult hurdle for folding screen mobile phones to overcome; and no matter Samsung, LG, BOE and other currently known folding screen manufacturers, they do not have high expectations for the yield rate and supply of screens.

If we refer to the current cost of over 10,000 yuan for mobile phones, we can almost conclude that foldable screens will not be popular within a year. Combined with reports from multiple analysts, the global shipments of this type of mobile phones in 2019 will be between 2 million and 3 million units.

As for 5G, judging from the plans of the three major domestic operators, the trial commercialization of 5G terminals will begin in Q3 2019, and a more complete platform experience will also be available a year later.

2. Cause of “futures” 1: Pressure from the stock market

Looking back over the past few years, the most representative of "technology futures" are folding screens and 5G, but it is not without precedent that concepts were released earlier than products, or even no finished products have been launched so far.

• Lenovo conceptually launched an independent 5G module phone last year, but the network experience has not yet been implemented;
• Meizu unveiled Super.mCharge's 55W fast charging at MWC in early 2017, but has not launched any products to date;
• It was also at that exhibition that OPPO launched the 5x optical zoom, and this year it officially launched the 10x hybrid optical zoom, but the mass production model will not be available until April;
• vivo launched the APEX concept phone in early 2018 and the second generation APEX at the end of the year; neither phone went into mass production, but vivo launched the NEX series with some new features in the same year, which can be regarded as one of the classic cases of brand transformation last year.

In this way, mobile phone technology PPT conferences have become the norm in recent years. The most direct pressure causing this situation is the shrinking market space.

According to IDC data, global smartphone shipments have decreased by 0.1% year-on-year to 1.4724 billion units since the spring of 2017. This is the turning point for the decline in smartphone shipments since the release of the first iPhone in 2007.

In 2018, the total shipments of the domestic mobile phone market were 414 million units, a year-on-year decrease of 15.6%. The global smartphone market sales were also declining. In the mobile phone stock market, most manufacturers now only talk about the market share when publishing data, and it has become a new trend not to mention the total shipments.

Lei Jun said at the beginning of the year, "Don't care about life and death, just do it if you don't agree", and executives of mobile phone manufacturers accidentally fired at each other on Weibo, which became a microcosm of the current situation of manufacturers this year. And "announcing what has not been released first" is definitely a way to attract attention.

3. Multi-brand strategy and brand premium ultimately make "technology futures" take shape

When shipments cannot grow naturally, "a manufacturer launches multiple brands to explore market segments" has become a new trend in 2018-2019. This trend has given "technology futures" a new reason to exist.

Take Xiaomi as an example: Redmi is independently positioned in the mid-to-low-end market, Black Shark is positioned in the gaming market, and Meitu is positioned in the female market; vivo successfully expanded its new technology flagship NEX last year, and this year it launched the iQOO targeting Internet users; OPPO will explore a new flagship product line with 10x optical zoom in April, and India's Realme is rumored to return to China this year; as for Huawei, Huawei Nova, and Honor, the three product ideas are already quite clear.

Games, Internet, photography, young users, and cost-effectiveness are the key words for the product lines that have emerged from last year to this year. The significance of this wave of operations is to clarify the previously unclear positioning and attract users that were not won in the past.

On the other hand, the parent brand withdrew from this environment and began to shape a new brand image. The biggest issue, of course, was to solve the problem that the Android camp had never solved since its establishment - brand premium.

"Open source, fragmentation, lack of deep integration between hardware and system", looking back at the Android flagships five years ago, we can still see these situations. So much so that today, among models of a certain price, "Android phones are still equated with poor experience".

At the same time, because Android phone manufacturers have experienced the stage of "selling low-end and mid-range products at low prices and competing fiercely for cost-effectiveness" both at home and abroad, the Android camp has never been able to achieve profit margins. In the past few years, Apple once accounted for more than 90% of global mobile phone profit data.

In the past two years, this data has been changing. The "Futures Conference" has played a certain role.

According to a report by data company Counterpoint, in the third quarter of 2018, Apple's mobile phone profits accounted for 62% of the global total profits. The profit ranking of Chinese mobile phone brands was Huawei (8%), OPPO (5%), vivo (4%) and Xiaomi (3%).

In terms of profit growth, Xiaomi (747%), Huawei (107%), vivo (24%) and OPPO (23%) were the smartphone brands with the fastest profit growth in the second quarter of 2018.

The rising cost of mobile phone materials in the past two years gave the Android camp a good opportunity to raise prices uniformly; but "technology futures", or brand transformation based on black technology and R&D investment, was also the reason for this round of premium.

According to incomplete statistics, the total shipments of Huawei's P20 series and Mate 20 series launched last year reached 20 million units, and the domestic starting price of both is 4,000 yuan; the starting price of NEX, which was just launched by vivo last year, is also 4,000 yuan, and the shipment volume exceeded 2 million units at the end of the year; OPPO stated in private that last year's overall performance was good due to the increase in gross profit, and the Find X with a pop-up design also contributed a lot.

"In the field of technological products, consumers will pay for real technology" is an unchanging truth. Domestic Android manufacturers can finally get good prices and good shipments in the flagship field.

Therefore, technology, even futures technology, has become a necessity for brand transformation.

4. Two-sided view of technology futures

At this point in time, it cannot be said that "technological futures" are a bad thing. Compared with the previous flagship phones that also relied on ODM, in an era where "body polishing technology" can be talked about for half of the press conference, investing in technology research and development is naturally a good thing.

For enterprises, R&D investment, on the one hand, proves their financial and technological strength; on the other hand, it is also the foundation for long-term development; for users, manufacturers' more active R&D and publicity can also bring more good products.

Furthermore, technology futures are also a process of "research and development". Because technology is not simply developed behind closed doors from proposal, transformation, to commercial use. Publicity, user education, and technical feedback all require time. And this market often does not wait for anyone.

Take unlocking as an example. From the launch of Apple's facial structured light to the launch of Samsung's ultrasonic under-screen fingerprint technology, the domestically promoted optical under-screen fingerprint has brought a completely new experience. Before that, people had long discussed "face unlocking or under-screen fingerprint".

As the main promoter of this technology, vivo has communicated with several under-screen fingerprint technology companies. At that time, no one had an answer to whether the under-screen route was reliable. In the end, Goodix and vivo invested huge manpower costs, R&D funds, and adopted a risk-sharing model to produce the current iteration. Today, even without facial recognition or ultrasonic technology, you still think that full-screen unlocking is not a difficult task.

It takes time for the technology to be iterated and for consumers to accept new features at the market level. If the original intention of futures is to land better products, then everything is worth affirming.

Special-shaped full screen, punch-hole screen, optical under-screen fingerprint, pop-up structure, TOF sensor, multi-fold optical zoom, 50W fast charging, 27W wireless fast charging, these new technologies have formed the development of the mobile phone industry in the past year or so. This is probably a romantic interpretation of "technological futures".

But it still has to be said that from the perspective of time and maturity, it may be too early to talk about foldable screens and 5G.