Apple takes 80% of global mobile phone profits: How can the home appliance industry achieve both volume and profit?

Home appliance manufacturers all say that "you can't have your cake and eat it too", because you can't have both scale and profit. However, Apple not only swallows up 80% of the profits of the global mobile phone industry, but is also the second largest mobile phone sales company in the world. So, how can home appliance companies learn from Apple's good example?

In the eyes of Chinese home appliance and electronics companies, there seems to be a tacit understanding and consensus: "You can't have your cake and eat it too." To win by mass manufacturing, you can only sell at a low price and sacrifice profits; to occupy a high-end position, you have to sell at a low price, so you still don't make money.

Who says you can't have both scale and profit? The latest quarterly report released by Apple Inc. recently shows that the company's net profit is $8.7 billion, accounting for 80% of the global mobile phone profits. In response, many home appliance companies say that Apple is unique in the world's business community and there is really no way to learn from it. So, can home appliance companies learn from Apple and achieve both volume and profit?

one

Recently, Apple released its third quarterly report: iPhone sales of 41.026 million units, net profit of $8.717 billion, a year-on-year increase of 12%. This quarter, Apple's share accounted for 11.4% of global mobile phone shipments, ranking only behind Samsung.

Such financial reports are not only envied by Chinese companies, but also very eye-catching on Wall Street in the United States. In the global mobile phone market, Apple can be said to have achieved a double harvest of scale and profit.

Compared with Apple phones, domestic mobile phone brands are in a slightly awkward situation. Although the market sales share has increased rapidly, Huawei, OPPO, vivo and Xiaomi have ranked third to sixth respectively, and the market share has reached 69%, but the profit is still low. Data shows that in the first quarter, Apple accounted for 83.4% of the total profit of 12.11 billion US dollars in the global mobile phone market. Together with Samsung, the two took more than 90% of the profits in the smartphone market. At the same time, the profits of Chinese mobile phone brands are less than 2.5%.

Smartisan Technology, which has been making mobile phones for five years, still has to rely on financing to turn losses into profits. However, since the iPhone was launched in 2007, it has been the leader in the mobile phone industry. So far, the sales volume of iPhone has exceeded 1.2 billion units, with a total profit of US$321.02 billion, or about RMB 2.157 trillion. Not only are hardware products highly profitable, but Apple's services and accessories are also "profit cows."

In the latest quarter, Apple's service business earned $7 billion in revenue, up 22% year-on-year and 3% from the previous quarter. That is to say, even if iPhone sales decrease in the future, Apple can still make money by allowing users to download new apps, new games, music, cloud services, etc. from the App Store. And in the future, the profitability of this business will become stronger and stronger.

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Building a high-end brand and selling high-end products with high prices and high sales will of course lead to higher profits. This is something that many Chinese home appliance and electronics companies think is impossible, but Apple has done it.

This also reminds Chinese home appliance companies that scale and profit are not in conflict. It is not that consumers cannot afford to spend money or are unwilling to spend money, but whether the product is worth the high price. Especially with the upgrading of consumption level, home appliance companies have broad prospects for transformation to high-end products. In the future, they can support half of the industry. As long as they find the right way, they can have both large scale and high profits.

The most important thing is product innovation. The iPhone is considered to have redefined mobile phone consumption habits. From then on, mobile phones are no longer just a communication tool for making calls, but have become a device that integrates entertainment, communication and even office work. Moreover, compared with many brands that have several or even dozens of product models, Apple has conquered the market with only a few models, which shows the global appeal of high-end brands and products.

For example, in the current Chinese color TV market, the panel is LCD, OLED? Or quantum dots, curved? No matter which panel is chosen, the hardware has not been profitable. The TV forces, mainly Internet TV brands, try to make profits by introducing traffic through content, and do not hesitate to lower product prices. Facts have also proved that consumers do not buy it at all, and it is just a flash in the pan. On the contrary, Apple products are not cheap, but consumers are still willing to pay for its service business. The key lies in differentiated and personalized products and high-end and high-value brands.

Fortunately, more and more home appliance companies have realized that the path of low-end, large-scale manufacturing will definitely become narrower and narrower. Only by transforming to high-end and exploring the maximization of profits under a certain scale of development can we gain the power of long-term development. For example, under the trend of intelligence, many home appliance companies have taken advantage of this opportunity to accelerate the pace of transformation, have achieved considerable results, and have begun to experience the market profits brought by high-end transformation.

Of course, the transformation process is inevitably accompanied by pain and hardship, and the Chinese home appliance industry has just started. In the future, including product innovation, technology research and development, manufacturing system upgrades, etc., the resistance and challenges to be faced are certainly not small, but since Apple's success has told us that the path of transformation to high-end is right, then it is worth it for Chinese home appliance companies to persist and absolutely not change course midway.

I believe that home appliance companies will be able to reap the rich dividends of transformation to high-end markets, and the Chinese home appliance industry will truly become a world powerhouse.

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.