China’s mobile phone sales fell 28%. LeTV and Coolpad have disappeared. Who will be the next to disappear?

Recently, the China Academy of Information and Communications Technology under the Ministry of Industry and Information Technology released the "2018 March Domestic Mobile Phone Market Operation Analysis Report". The report shows that from January to March 2018, China's smartphone shipments were 81.37 million units, a year-on-year decrease of 26.1%. Among them, the shipment of domestic brand mobile phones was 75.864 million units, a year-on-year decrease of 27.9%.

Next, will mobile phone shipments increase in the second quarter? I think that not only will it be difficult to increase, but there will also be a major reshuffle, and some mobile phone brands will disappear.

Market share is concentrated in five major brands including Huawei and OPPO

In January this year, data released by international market research firm Counterpoint Research showed that in the 2017 Chinese smartphone manufacturer shipment ranking, Huawei, OPPO, vivo, Xiaomi and Apple ranked in the top five, with a combined market share of 77%. In 2016, this figure was 67%.

The concentration of market shares is directly related to the decline of LeEco, Coolpad, Gionee and Meizu. The disappearance of LeEco phones has provided a huge opportunity for Xiaomi phones. Gionee suffered from a tight capital chain due to blind investment and suffered a large number of layoffs. It is still waiting for capital rescue.

Meizu also announced layoffs, with about 10% of its employees laid off in 2017 and more layoffs in 2018. This shows that competition in the mobile phone market is already very fierce, and the further concentration of brands in the hands of the top five will intensify the difficulty of competition.

The top five brands will compete mainly in overseas markets. Whoever wins the overseas market will continue to increase shipments. Therefore, both Huawei and Xiaomi are frantically expanding into markets such as India, which is also a reflection of a sense of crisis.

In the second quarter, mobile phone shipments still struggled to recover

According to a latest statistical report released by Canalys, the total annual shipments of smartphones in China in 2017 were 459 million units, down 4% from 2016. This is also the first time that the total annual shipments of smartphones in China have declined.

If 2016 is included, mobile phone sales have declined for seven consecutive quarters. In March 2018, vivo, OPPO, Xiaomi, Huawei, Meizu, and even Hammer all released new phones. These phones all use 18:9 full screens, imitating the iPhone X's notch design, and all claim that the notch is narrower than the iPhone X.

Mobile phone companies are flocking to produce mobile phones with notch screens, with almost no differentiation. At first glance, they all look exactly the same. Can such mobile phones arouse consumers' purchasing interest? Obviously, it is difficult.

Because consumers will not change their phones just for an ugly notch screen. First of all, the hardware configuration of mobile phone processors, memory, screens, cameras, etc. has reached a bottleneck. The hardware configuration of the full-screen mobile phones in the second half of 2018, and even the new mobile phones released in early 2018, is still very trendy and runs smoothly.

Secondly, there are no new breakthroughs in mobile phone software, communication networks, and applications. The iPhone replaced Nokia as the leader thanks to the birth and popularity of 3G networks. The rise of Samsung and Huawei depends on the popularity of 4G networks.

5G network has not yet appeared, and mobile OS and applications have not undergone revolutionary changes, so hardware does not need to be upgraded. The most hyped thing now is artificial intelligence mobile phone, but it is more gimmick than practical.

Lenovo and other mobile phone companies are trying desperate measures to develop blockchain phones, and their speculative approach is unlikely to succeed.

5G licenses may be issued in 2020, but it will not be popular until at least 2025. Whether 5G can bring about a major change in mobile phones will determine the replacement of mobile phones. Therefore, the mobile phone market is now at its most difficult time. Entering emerging countries such as India, Southeast Asia, Russia, and Africa, where smartphones are becoming popular, may be the only way for all mobile phone companies.