What exactly do the cool people in conspiracy theories want to do?

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Coolpad is a powerful company, and China Cool Alliance is not a false name. Its actions cannot be to tease a certain company.

In my opinion, after accepting a sum of money from 360 and establishing a joint venture with 360, Coolpad accepted another 2 billion yuan of investment from LeTV and accepted the latter as the second largest shareholder. This should be a move by Coolpad to reshape its industrial chain and business model. Of course, it is also two financing actions.

I think the main reasons that prompted Coolpad to change are:

1. Direct cause: contraction after aggressive layout

Since the beginning of 2014, Coolpad has been somewhat aggressive in its layout in the smartphone market, especially in the 4G market. It ignored the changes at the operator level. When subsidies were drastically reduced, Coolpad's traditional advantageous channels were blocked. It is said that this led to a large amount of inventory. This was indeed a common phenomenon in the first half of last year. At that time, there was a voice of smartphone saturation in the market. Machines priced below 1,000 yuan began to emerge. In the second half of the year, some even ran away from the supply chain.

Coolpad mobile phones have three channel models: 1. Coolpad itself uses operator channels; 2. Dashen belongs to its own e-commerce platform; 3. ivvi belongs to a social channel, which you can see in retail stores.

Among the three channels, 2 and 3 both imply great cost pressure. When 1 is blocked, 2 and 3 will face even greater pressure. The Internet and social marketing are not Coolpad's strengths, and it needs to resolve operational risks.

2. Indirect competition reasons: Xiaomi and others’ impact

Advantageous channels were blocked, new channels were not developed, and Coolpad's brand effect was weakened. The overall competitive pressure was getting heavier. When Xiaomi and Redmi came out, the market was in mourning. With the strengthening of brands such as Huawei, the entire market has put greater pressure on traditional mid- and low-priced brands. Coolpad lost its voice last year. Its brand's pulling effect on its entire system was suppressed.

Coolpad urgently needs to create a strong presence in Haikou to export its advantages in design, solutions and supply chain.

This is actually the pressure from Yulong Communications. LeEco and 360 have been colluding with it and Coolpad last year, but there has been no clear result. My judgment is:

1. Coolpad cannot stick its own straw in the back. Because, in the market, there are not many mobile phone companies like it that are highly vertically integrated from design, manufacturing, branding to channels. Samsung and Huawei are considered, but Huawei has also transferred orders in OEM and established cooperation with Foxconn. Xiaomi has completely transferred manufacturing and focused on both ends of the smile curve.

Coolpad needs to divest or transfer its non-core advantages. For it, this means the channel system that is integrated with the brand. Transferring the channel is equivalent to transferring the brand operation.

The cooperation with 360 is such a model. Zhou Hongyi's Internet spirit is obvious. Coolpad's e-commerce channels and brand layout are handed over to 360, which should be more reliable than Coolpad. 360 is indeed in urgent need of an entrance, which is the background for the establishment of the joint venture.

2. However, unlike 360, which is really engaged in product development, LeTV is eager to enter the mobile phone field with the intention of serving capital operations. LeTV has its own independent brand and is unlikely to be content with the cooperation model of 360 and Coolpad. It is definitely more willing to obtain the resources of Coolpad's overall supply chain, which is more stable. Achieving capital cooperation at the Coolpad Group level and becoming the second largest shareholder will be more valuable to the operation of LeTV mobile phones.

Although LeEco formally enjoys about 8% of Qihoo's equity (of course, it cannot be calculated directly in this way), and although Zhou Hongyi issued a threat on Weibo, I don't think Jia Yueting is copying 360. He doesn't need to. The two companies actually have some kind of cooperation context, which is self-evident.

However, in form, LeTV stood above 360 ​​Qihoo, which really seemed like the outcome of a conspiracy.

I don't believe this. I think that behind this conspiracy theory, what is actually reflected is the limited core competitiveness of Chinese mobile phones. Coolpad has become a hot commodity in the mobile phone industry mainly because its model works, not because it is better than Huawei in some aspects.

It is hard to find a company similar to Coolpad in the Chinese market. Born in the soil of South China, it is lucky that it did not completely follow the market, move towards excessive horizontal division of labor, and stick to one link. Although most of its mobile phones are mid-range and low-end, Coolpad has gained a foothold with its entire system.

But after all, it is a new situation, and the brand concentration in the mobile phone market is still not high. Coolpad's system integration capabilities are mainly reflected in the front and middle ends of the smile curve, and the back end is not its forte. Its cooperation with 360 meets its demands.

The cooperation with LeEco may reflect a deeper sense of crisis. Because LeEco's position as the second largest shareholder may be enough to influence its decision-making and the transfer of core interests. The huge risk is that companies like LeEco have a strong learning ability and they should not be willing to rely on others to develop. LeEco is also a highly vertical model. In the future, it should vigorously lay out its own supply chain system.

That is to say, for Coolpad, the cooperation with 360 is nothing more than channels and brands, while the cooperation with LeTV is really the giving up of core interests. It is hard to say how the future will evolve, and it is possible that they will become competitors one day.

At a delicate time, Coolpad, 360, and LeTV seem to be somewhat conspiratorial. 360 in particular feels passive. In fact, it is also foreseeable that Zhou Hongyi should strive to obtain the controlling stake of Qihoo. He has already increased his stake and raised the price, and may have to pay more in the future. This seems to be a lot of pressure at a time when 360's privatization requires a lot of money. The timing chosen by LeTV has strengthened the impression of conspiracy theories.

I prefer to think about this topic from Coolpad's perspective. I think this is an open strategy and a move to adjust its business model. I think it will focus more on front-end design, solutions and supply chain output in the future.

Even so, I still feel that Coolpad is not optimistic enough in three aspects.

1. Although the cooperation with LeEco and 360 is different, it will overdraw its technology accumulation and industrial resources. Especially in terms of technology and products, it is very likely that the products of Coolpad, LeEco and Qihoo will become homogenized. Although the hardware is becoming more and more standardized, if there is not much difference in the solutions, Coolpad will damage its future and lead to vicious competition in the market.

2. Although the change in Coolpad's business model will broaden its shipping channels, it will also increase its future R&D costs and force it to fight with giants such as Foxconn.

3. In the absence of chip design capabilities, Coolpad will be completely exhausted by the time LeTV and 360 rise.

I have a feeling that Coolpad may enter the application processor field in the future, or complete a new round of vertical layout through reverse integration. However, this step may be very dangerous, as it will offend past partners, such as Qualcomm and MediaTek.

This is speculation. But I do think that after Coolpad gives up its core interests and gets a large amount of cash, if it cannot move to the front end, its value will continue to be diluted. Of course, if it does not want to play in the field in the future, then the cooperation with LeTV will be full of mysteries. At that time, Zhou Hongyi's deterrence may take effect.