Free hardware no longer explores the root cause of the price increase of domestic mobile phones

In recent years, the domestic mobile phone industry has undergone great changes, including the emergence of mobile phone brands and the constant reshuffle and elimination within the industry. Driven by the Internet thinking, the market share of mobile phone brands such as China Cool Union that rely on traditional operator channels for profit has been rapidly divided. Internet brands such as Xiaomi, Meizu, Xiaolajiao, and Qingcong have risen rapidly, relying on streamlining offline store costs and saving channel expenses to reduce mobile phone prices, attracting consumers' attention with super high cost performance. Consumers have benefited, and the growth of the smartphone market has also been rising steadily.

Unfortunately, the good times did not last long. The idea advocated by LeTV mobile phones, that hardware is free and services subsidize hardware, can be said to have given a shot of ripening to the development of domestic mobile phones. On the one hand, high-cost-effective mobile phones are emerging in an endless stream, and domestic mobile phone manufacturers are also forced to make a loss with LeTV. On the other hand, the fierce growth of the mobile phone market in the past few years has led to the saturation of the mobile phone market today. The rapid changes in the mobile phone market environment have also made capital injections unstable, hindering the sustainable development of mobile phone manufacturers.

Therefore, despite the rapid development of domestic mobile phones, it is obviously unrealistic to want to go further without their own factories and patented technologies. Facing many challenges, what was owed must be paid back. The era of free hardware is gone forever, and domestic mobile phones will usher in a collective price increase.

▲Xiaomi mobile phone price increase announcement

I won't mention many brands like Qingcong, Xiaolajiao, and IUNI that have been washed ashore by the Red Sea. Xiaomi, which we are familiar with, is a vivid example. The first generation of Xiaomi phones quickly opened up the market with the two selling points of Qualcomm's 1.5GHz dual-core processor, 480x854 high-resolution capacitive screen, and an ultra-low price of 1,999 yuan. You should know that the iPhone 4S at that time was priced at 6,000 or 7,000 yuan, and the flagship phones of other overseas brands were at least around 5,000 yuan. For mobile phone enthusiasts, high-end configuration and low price combined with the highly flexible MIUI system is simply a blessing.

Since the MIUI forum has accumulated many Xiaomi fans, coupled with word-of-mouth publicity among fans, Xiaomi mobile phones have been very popular, and it was really hard to get one. In the process of corporate development, Xiaomi has divided into multiple product lines to promote sales growth. Data from IHS shows that in the ranking of China's smartphone sales in 2014 and 2015, Xiaomi ranked first with a market share of 14.97% and 16.5% respectively, surpassing well-known manufacturers such as Huawei, Apple, and Samsung. During this period, Xiaomi was like a balloon, filled to its most inflated state.

▲IHS data: Xiaomi's market share in 2015 was 16.5%

But if you look at the results of the 2016 mobile phone sales rankings, you will find that Xiaomi is no longer at the top of the list in terms of shipments. Today's Xiaomi is well aware that cost-effectiveness alone cannot form long-term user stickiness. Secondly, brand power is also very important. Due to its early positioning and product reasons, Xiaomi phones have long been labeled as good value for money in the minds of users. When former Xiaomi users have the ability or want to try higher-end products, they naturally think of Apple and Samsung. At this time, Xiaomi can no longer meet the needs of this group of people.

Therefore, we can see that Xiaomi increased advertising last year, signed spokespersons, promoted Xiaomi Home, and launched high-end concept phones such as Xiaomi MIX. The purpose of this series of practices is nothing more than one, which is to change everyone's traditional understanding of Xiaomi mobile phones. Lei Jun wants to tell everyone that Xiaomi allows ordinary consumers to enjoy the charm of technology, rather than being a cheap brand that relies on small profits and quick turnover. In fact, Lei Jun's original intention has not changed, but the original Xiaomi did not widely penetrate this concept into the eyes of consumers. It can be seen that when a company has been labeled with a recognized label, if it wants to upgrade this label, it must make up for what it owed in the past.

The reason why Xiaomi is brought up before discussing the topic of why domestic mobile phones have increased in price is that Xiaomi reflects the common phenomenon of domestic mobile phone brands. That is, after the capital winter and market saturation, the road of relying on spending money to increase sales has basically come to an end. What needs to be done now is to go back on the road and find out the shortcomings and make up for them.

What gaps need to be filled? I think there are three levels: products, marketing, and services.

Having excellent products is naturally the basis for the latter two. Even if a popular mobile phone is equipped with flagship-level configuration and a low price, it is difficult to arouse consumers' desire to buy. Marketing is what many manufacturers value after OPPO and vivo became successful. As the saying goes, even good wine needs a bush. To give a slightly one-sided example, if you just got a card at a mobile store, and there is an OPPO or vivo mobile phone store next to it, plus the clerk's eloquent sales pitch, would you still consider going home and waiting online on time to try your luck? Service is actually the link that best reflects brand stickiness. If the user's mobile phone has problems during use and can be solved in a timely manner, and the user has a satisfactory experience in the process of solving the problem, then the user will have a much better impression of the brand.

▲OPPO and vivo have a solid offline channel foundation

Which of the three points mentioned above does not require a lot of expenses? But these are exactly what the previous Internet mobile phone brands lacked. The direct means for mobile phone manufacturers to make profits is hardware profits. Without sufficient hardware profits as support, they naturally cannot maintain their long-term development. Therefore, a general price increase of mobile phones this year is inevitable.

If we look at it from another perspective, from an objective point of view, there are many other factors that lead to the price increase of mobile phones. For example, the price increase of components provided by upstream suppliers, the depreciation of the RMB exchange rate, the increase in domestic consumption levels, the improvement of the premium ability of domestic brands, etc. But even if these problems appeared three years ago, I still believe that Internet brands like Xiaomi will appear, so these factors cannot be the fundamental reason for the price increase of domestic mobile phones.

Recently, I have seen many friends on the Internet complaining about the price increase of domestic mobile phones. In fact, after saying so much, the author is not making excuses for the price increase of domestic mobile phones, but just telling you that this is an inevitable product brought about by the development of the domestic mobile phone industry. As consumers, we have enjoyed the dividends brought by free hardware in the past two or three years. Now this era has become a thing of the past. After many reshuffles, the mobile phone brands that can make it to the end all have their own unique product selling points and brand advantages, and the homogeneity phenomenon is getting better. Therefore, in the new year, domestic mobile phone manufacturers are bound to bring us more amazing products.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.