Does the hesitant Changhong still have a chance to return to the throne?

After the May Day sales frenzy, the domestic color TV market continued its downward trend in the first quarter of 2017, with both transaction volume and transaction amount still declining.

This year's Chinese color TV market is far more severe than previously expected. According to the first quarter data of 2017 domestic color TV market jointly released by China Electronic Video Industry Association and Aowei Cloud Network, the retail volume of color TV industry in the first quarter of 2017 was 11.79 million units, a year-on-year decrease of 5.2%.

Under the wave of Internet, the profit margin of color TV hardware has collapsed, and the profitability of content is still unclear, so TV manufacturers are struggling. With the new situation of consumption upgrading, almost all TV manufacturers such as Hisense, Skyworth, and TCL have focused their attention on large-screen high-end products.

And amid this general trend, there is one brand that remains unmoved amidst the overwhelming publicity for high-end televisions. This manufacturer is the former king of color TVs - Changhong.

From being the undisputed No. 1 in the country in the past, to falling out of the top three in the color TV industry, and now being squeezed out of the first-tier camp by Hisense, Skyworth, and TCL, what has Changhong experienced in the color TV market in the past 20 years, and what will await Changhong in the future?

From the Proud Swordsman to the Fall of God

In the 1980s, the Chinese color TV market began to rise, but due to the backwardness in technology, domestic TVs were always suppressed by Japanese brands. At that time, under the leadership of the ambitious factory director Ni Runfeng, Changhong used price as a breakthrough point and took the lead in charging against foreign brands.

By passing on benefits to consumers, reducing prices several times and proactively initiating price wars, Changhong has successfully blocked the sales momentum of foreign brands in China and stood out from domestic brands.

In the 1990s, Changhong's market share of color TVs surged from 16.68% to 31.64%, and peaked at 35%. At that time, one out of every three color TVs sold in the domestic market was a Changhong.

Then, with the rise of emerging display technologies, China's color TV industry also faced a new technological revolution. Driven by the high added value of flat panel displays, the industry's profits attracted a large number of investors. During this round of industry transformation and upgrading, Hisense took technology as an opportunity and a handle to successfully stand out in the industry, and led by Skyworth, rewrote the market landscape.

Judging from the leading color TV brands in China today, Hisense has accumulated ten years of experience in the laser field, and has achieved independent design, research and development, and has not only launched 4K laser TVs, but will also study dual-color laser TVs. Although Skyworth does not master OLED screens, it is also ahead of Chinese color TV brands in the production and manufacturing of OLED complete machines.

In contrast, after losing its dominant position in the color TV market, Changhong has become increasingly conservative in the accumulation of core technologies. While everyone is focusing on research and development, Changhong has turned its attention to the so-called artificial intelligence, which seems more "high-end".

Focus on voice search Changhong artificial intelligence non-intelligent

If the difficulties Changhong is facing nowadays are not only in the core technology aspect, I think the direction of enterprise development is also one of them.

Changhong, also a well-known domestic color TV brand, has chosen a development path that is completely different from traditional Chinese color TV companies such as Hisense and Skyworth.

Last year, Skyworth suddenly announced that it would launch a "buy hardware, get free content" promotion for its four series of color TV products. At the same time, it also disclosed for the first time that Skyworth would participate in content investment in the future. Skyworth's move can be understood as the first time that Skyworth, as a leading company in traditional color TV in China, has crossed over from the ultimate hardware track of creating display technology to the content production and investment that matches the large screen of TV.

In contrast, Hisense launched VIDAA, an Internet TV brand targeting high-end consumers and quality consumers, in the same year. When brands such as LeTV, Xiaomi, Baofeng, and PPTV were focusing on hardware loss-making and low-price brands, Hisense continued to build on its hardware display technology advantages and confidence to open up high-end competitive space for Internet TVs, giving Internet TVs a new positioning and industrial connotation.

However, Changhong is not in a hurry to draw conclusions on "soft" and "hard".

On July 28 last year, Changhong released the Qike TV, which Changhong defined as the third-generation artificial intelligence TV. The biggest feature of Changhong's promotion of this product is that it can quickly respond to voice searches within 3 seconds.

Changhong promoted it as "a big step for the world", but in fact, Changhong's voice search is not only far from the concept of artificial intelligence, but also its underlying core technology comes from another school. Just like Xiaomi and Hammer, Changhong's voice search service also comes from voice interaction service providers such as iFlytek.

Without the support of core technology, Changhong seems to have become a speculator in the color TV market. Another industry reshuffle is imminent, and it is unknown whether Changhong, which has lost its bargaining chips, can still participate in the next game.

From champion to second-tier player, frequent mistakes in senior decision-making are the main reason

The fall of a star often involves a thrilling story, and Changhong is no exception.

Back in 2003, when industry hero Ni Runfeng handed over the baton of Changhong to Zhao Yong, Zhao Yong probably never dreamed that his subsequent series of actions would completely bring Changhong into a desperate situation.

Obviously, when it comes to strategic control, Zhao Yong is not qualified for the position of CEO.

Changhong began to make drastic reform attempts after he took over the position of chairman. In order to solve the series of messes caused by Ni Runfeng's price war, Zhao Yong decided to use money as the criterion instead of considering the technological development trend. This was also the reason why Changhong chose plasma panels on the grounds that LCD panels were more expensive.

Subsequently, Zhao Yong's strategic failure of his 6 billion yuan gamble on plasma became a fatal blow to Changhong.

But Zhao Yong's "foolish" actions were not limited to this. With more and more market development opportunities, Changhong could no longer focus on one field and began to seek diversified development.

Changhong's diversified tentacles cover a wide range, including black and white appliances, mobile phones, real estate, kitchen and bathroom, etc. However, the results are contrary to expectations, and each of Changhong's business segments is not outstanding. The plate has become bigger, but the physical strength has not improved, and the revenue has increased, but the profit level has not increased.

According to the financial report, Changhong's most profitable business in 2014 was real estate, with a total profit of nearly 500 million yuan, but its color TV business suffered a loss of 130 million yuan. This was the beginning of Zhao Yong's third decision that led Changhong into a desperate situation.

Under the impact of the Internet wave, the concept of "smart home" began to emerge. Changhong also gradually realized that intelligence is an unstoppable trend.

In 2014, Changhong launched its smart transformation strategy and launched the "smart home platform under the smart community", with smart property and smart health as its main businesses. Unexpectedly, Zhao Yong sold Guohong Communications, which was one of Changhong's pillar industries for entering 3G.

After more than half a century of development, Changhong experienced its glory in the 1980s, but now it has gradually fallen into a trough. Behind this, the decision-making errors of the top management cannot escape the blame.

Does the hesitant Changhong still have a chance to return to the throne?

Changhong had many opportunities in the past, but due to wrong decisions made by senior management, Changhong is still in a half-dead state today.

As for the future, does Changhong still have a chance to return to the "front-line battlefield"?

Compared with its competitors, Changhong, once a giant, is still facing difficulties in turning around due to institutional reasons. The long-term price war and the decline in sales have led to a shortage of R&D funds, and Changhong is cautious about investing in new technologies. It is unlikely that Changhong will make any breakthroughs in core technologies in the short term, and can only survive by hyping the concept of artificial intelligence.

Will the future technology direction be OLED or electroluminescent quantum dots? Changhong, which bet on plasma in the LCD era, has no ability and no intention to make another gamble. But at the same time, Changhong has also taken the initiative to give up the ticket to the next game.

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.