Return of the industrial spirit: Is the bubble of Internet mobile phones beginning to burst?

After Xiaomi's market share dropped sharply and its valuation plummeted, LeEco's financial crisis has pierced the last layer of the bubble of Internet mobile phones. The low-end consumer groups have begun to show aesthetic fatigue of routines after being repeatedly baptized by the marketing feasts driven by capital, such as "born for fever", "feelings", "AK47" and "ecology". This fatigue directly affects consumer decisions.

According to TrendForce's data on China's smartphone market in the third quarter, OPPO, vivo and Huawei ranked the top three in the domestic smartphone market share, accounting for 49.9% of the market share, almost half of the country. Xiaomi, which ranked first in the same period last year, fell to fourth place with a market share of only 8.7%, a year-on-year decrease of 42.3%.

In the third quarter of the global market, Huawei not only took up the banner of domestic mobile phones and entered the top three in the global market, but the hot sales of the Mate 9 Porsche Edition also made it begin to make a breakthrough in the high-end market. In comparison, Xiaomi also fell out of the top six in the global market.

When Xiaomi’s mobile phone market was weak and it tried to make up for the growth dilemma through diversification, LeTV, which was better at making PPTs and marketing, was once mistakenly regarded as an enhanced version of Xiaomi. However, reality always slaps one’s face cruelly. LeTV, which wanted to play with the ecosystem from the beginning and spent money in a way that outsiders could not understand, was hurt because the diversification front was stretched too long after shouting the slogan of selling 100 million ecological mobile phones. After Guo Deying, the founder and product soul of Coolpad, left, Coolpad, which was taken over by LeTV, handed in a dismal report card of 3 billion losses this year.

The sharp contrast between the strong rise of old brands such as Huawei, OPPO, and vivo, and the collective failure of Internet mobile phone brands such as Xiaomi, 360, Hammer, and LeTV, is not only a simple potential conversion in the mobile phone market, but also a vivid report card of industrial spirit and capital-led entry layout.

Internet phones are confused by the "aphrodisiac" left by copycat phones

The counterattack of Internet mobile phone brands in recent years is due to the low threshold after the highly IT-oriented mobile phone industry chain, on the one hand, and the once large and fragmented mid- and low-end copycat phone market, which provided sufficient space for market integration.

During the peak period of the knockoff market, Samsung and other first-tier regular companies were terrified. Thousands of knockoff phone manufacturers, big and small, sold 228 million units a year worldwide, with an annual growth rate of 43.6%. Tianyu, known as the king of knockoff phones, once had a market share of more than 6%.

Unlike many current Internet mobile phone brands that are good at internal fighting but not good at external wars, the golden age of Shanzhai mobile phones has also achieved remarkable results in overseas markets. Among them, Shenzhen Jiwu Communication ranked ninth in global mobile phone sales in 2010, surpassing many domestic mobile phones such as ZTE and Huawei. Its sales in India are second only to the leader Nokia. In Kenya, Chinese Shanzhai mobile phones occupy half of the local mobile phone market. In 2011, the sales of Shanzhai mobile phones reached a record high of 255 million units.

In the process of upgrading the mobile phone market from feature phones to smart phones, the four major camps of Symbian, Windows Mobile, Linux and Palm were relatively closed, and their independent development with different interface experience styles has never formed a trend to drive the market, which also left enough time for Apple iPhone to become popular. The completely open source Android system has once again lowered the threshold of smart phones to a new low.

Compared with IT companies like Meizu that have transformed from consumer digital products and continued to focus on mobile phone hardware, Lei Jun, who has worked on traditional software and tried his hand at it through MiTalk, obviously understands the huge market potential of smartphone consumption upgrades and the dual benefits of mobile Internet terminal entrances.

It is not aimed at short-term profit, it understands online channels and user psychology better, it does not have too much marketing expenses to be forced to focus on event hype, it has learned Apple's routine more thoroughly, it has extended the payment period in the name of online reservation, and it operates with ultra-low inventory. A mobile phone brand with Internet thinking has played enough tricks and naturally became the focus of the market.

For many veterans in the mobile phone industry who still think in terms of industrial products, they all use the same batch of components, the same motherboards, and the same foundry. The supply chain system accumulated over the years is much more complete than Xiaomi's. The quality and cost performance of their mobile phones are not lower than Xiaomi's. However, they became the outcasts of the market in a short period of time. Many copycat mobile phone brands have collapsed before they have time to see Xiaomi's model clearly.

In order to gain market share and become a hardware gateway to the mobile Internet, the mid- and low-end market is undoubtedly the most fertile and lowest-threshold market. In the traditional strategy of flooding the market with products, Xiaomi provides a "correct" choice for young people who cannot afford high-quality smartphones, a cultural added value with a trendy label, catering to the psychology of young people who have no money but still want to appear to have a bit of pursuit and taste.

Thousands of knockoff mobile phone companies are operating independently, only know how to make products, and still rely heavily on traditional channels to pursue high gross profits. The market characteristics are extremely fragmented, and there are almost no cities to speak of. Xiaomi stood at the forefront of the new media dividend, cultural change dividend, and e-commerce channel dividend, and easily completed the takeover of the knockoff mobile phone market, and also created another "phenomenal" growth in the Chinese mobile phone market.

IDC data shows that in 2015, Xiaomi's market share reached 15% at its peak, with 67.5 million smartphones sold throughout the year, ranking first in the domestic mobile phone market and sixth in global smartphone sales. This performance surpassed Tianyu, the king of low-end knockoff phones, and Gionee, a favorite in overseas markets.

Xiaomi's takeover of the copycat phone market has had a direct chain reaction of bankruptcies of copycat phone companies and foundries, and the shrinking transformation of traditional multi-level distribution channels. Huaqiangbei, once the capital of copycat phones, has long lost its former prosperity and has become much more desolate.

However, this viral fission model that relies on online marketing and e-commerce channels immediately lost its nutrients and showed signs of fatigue after the growth dividend of the smartphone market gradually disappeared. In addition to Xiaomi, Internet companies such as Alibaba, 360, JD.com, Baidu, and LeTV have all tried to make mobile phones. Even a layman like Luo Yonghao has launched a "crosstalk phone", but it is difficult for a second Xiaomi to appear. On the one hand, Lei Jun is the most serious about making mobile phones and is more demanding on details, so Xiaomi has grabbed the first-mover advantage. On the other hand, all Internet companies are not good at making hardware products. Everyone is doing marketing, personalization, and differentiation in channels and experience. It can be said that they have the same positioning, the same target group, and the same routines. Under the fission growth model of Internet channels, Xiaomi's preconceived first choice status makes it difficult for latecomers to have a larger market opportunity.

The market gap left by the revolution of copycat phones is a feast for Internet mobile phone brands, and it is almost the last lunch. After the growth dividend fades, those who join in the fun will be eliminated, and the focus of competition in the mobile phone market will return to the product itself. The innovation of product functions and application scenarios determines the starting point of the next market dividend. Driven by capital, a large number of Internet companies seek speculative development of short-term arbitrage through business model changes, which is destined to be unable to bear the loneliness of polishing products. The next wave of elimination of Internet mobile phone brands will surely burst the bubble of this capital feast.

The spirit of industry is good and lonely

When traditional mobile phone manufacturers such as Lenovo, TCL, Coolpad, ZTE, Huawei and Gionee were struggling to move forward under the fierce two-pronged attack from Internet mobile phone brands and foreign brands, almost no one would have expected that Huawei, which is the least adept at the consumer products market, would be able to break through the siege, take up the banner of domestic mobile phone brands again, and begin to compete with Samsung and Apple in the high-end mobile phone market.

Seeing the current booming performance of Huawei's mobile phones, how many people still remember that before 2008, the mobile phone business was regarded as a burden by Huawei internally, and it was prepared to be sold as a whole, but failed due to the economic crisis. "Since it can't be sold, just calm down and do it well." After Ren Zhengfei set the tone for the terminal business, Huawei's wolf culture is not short of capable people who are willing to join the company, and even more so, it is not short of execution.

Three years ago, I watched Yu Chengdong learn from Meizu Huang Zhang and Xiaomi to interact with netizens on Weibo at 1 a.m., fire at his own team through Weibo, and start to express radical opinions to attract attention. It was full of latecomers following suit. These actions did not improve the outside world's impression that Huawei would not be a consumer brand. What outsiders cannot see is Huawei's continued high investment in terminal R&D, insisting on making its own chips, emphasizing the control of underlying core technologies, and building a strategic framework to shape the core differentiated competitiveness of products. Huawei's investment in R&D is almost the sum of domestic mobile phone brands.

OPPO and vivo, two brother mobile phone brands that were once not popular in the mainstream market in first-tier cities, also showed their true colors after the tide faded. Many people's impression of OPPO and vivo is that few people around them use them, but they can always see their advertisements in the hottest satellite TV entertainment programs, hot events, Spring Festival and other hot focus moments. Taking pictures, curved screens... The promotional appeal points are simple and clear, and the advertising creativity is very emotional around young people. When I go back to my hometown and pass through the prefecture-level cities and counties, I see OPPO and vivo's exclusive stores and cooperative stores everywhere.

OPPO and vivo are the only mobile phone companies after Huawei that have clear business strategies and can persist in the long term. They target young users, stick to offline channels for many years, and continue brand marketing, insisting on doing what they are best at. As the dividends of online channels are running out, the comprehensive competitiveness of this mid-range market has begun to stand out.

According to the latest data from IDC, the shipments of OPPO and vivo doubled in the third quarter of this year. OPPO replaced Huawei's 18 million units with 20.1 million units to become the new champion of the Chinese mobile phone market in the third quarter. Unlike Internet mobile phone brands that focus on the mid-to-low-end market, OPPO and vivo have always focused on the mid-range smartphone market of 2,000-3,000 yuan. Driven by the new round of consumption upgrade demand, the sales volume of smartphones priced between 2,000 and 3,000 yuan has reached 45.7%.

After gradually losing their online advantages, Internet mobile phone brands have fallen into collective anxiety. In today's era of information channels and information explosion, consumers are becoming more rational and their ability to identify routines is increasing. If the product itself does not provide added value in terms of quality and functional experience, it is difficult for the simple emotional value superposition to gain premium ability. The decline shown by Xiaomi in 2016 is a concentrated reflection of this change.

Zhou Hongyi lamented that he was late to the mobile phone market. Meizu showed its mediocrity after receiving investment from Alibaba. Luo Yonghao's Hammer phone really became a crosstalk. LeEco's ecological mobile phone seemed to have lost itself in its own ecosystem. In the final analysis, the Internet model can hardly bear the loneliness of making hardware. The competition for market share in the low-end market is also difficult to support the continuous investment of Internet mobile phone brands in R&D.

There are no secrets in the mobile phone industry chain. After the bonus period, the saturated competition has returned the focus to the product. A good product must be a game for the paranoid. In this flat era with no shortage of money, traffic, talents, or concepts, speculators are always looking for the next outlet. Only the spirit of industry has the strategic determination to polish the product.

Cell phones are dying

The combination of mobile phones and super apps has obvious double-edged sword characteristics. In China alone, in an online virtual society consisting of 1.3 billion smartphone users and 1.05 billion mobile Internet users, mobile phones, as the only connector between individuals and the online virtual society, have improved the efficiency of information acquisition and social services on the one hand, but have also significantly weakened the connection between individuals and the real society and life scenes on the other hand, which has had a strong impact on the traditional social form.

The negative effects brought about by the single-level entrance monopolized by mobile phones are being amplified geometrically with the expansion of the mobile Internet ecosystem. Individuals overloaded with information are imprisoned by various online social categories and kept in captivity by big data. They begin to like being labeled and generally enter a state of greed and delusion when faced with the filling of interest content. On the bus, on the subway, while walking, while driving, at the dinner table..., the interest-based business ecosystem linked by the mobile phone entrance is constantly competing for all the fragmented time of users.

Blindly catering to human nature has aggravated the convergence of groups and the separation of personality and thinking. The significant compression of information asymmetry space has caused interpersonal communication to depreciate rapidly, and the anxiety about self-existence has exceeded any previous period. In the urban jungle where buildings are getting taller and taller, the population is concentrating faster, while the strangeness and loneliness between people after being separated and filled by information flow are deepening.

Professor Xu Kaiwen of Peking University recently conducted a survey showing that 40.4% of Peking University freshmen, including undergraduates and graduate students, believe that life has no meaning. I am just living according to other people's logic. The most extreme of these is to give up on myself.

The single-level entrance monopolized by mobile phones, driven by efficiency and aggregated interests, has roughly reconstructed people's mainstream life scenes, weakening people's motivation to think actively and shape their own personalization. This group anxiety, driven by commercialization and artificially created through technological changes, is obviously in conflict with the human nature of living in groups and individual diversity. The extreme development of mobile phones and the mobile Internet ecology connected to them has leaked out the destructive power of human nature, which also doomed its terminal monopoly to be unsustainable.

The goal of technological change is to extend human nature, and the collective anxiety caused by scene aggregation and information overload will inevitably usher in a strong rebound after reaching a critical point. In the future, the entry of portable smart terminals connected to the Internet ecosystem will move from single-level to multi-level, and the trend of penetration from multi-scene aggregation to independent scenes is irreversible.

Amazon has taken the lead in making breakthroughs in this regard. Its Echo smart speakers and voice assistant Alexa have begun to gain popularity in the European and American markets. Alexa's design was inspired by the computer in Star Trek, and Amazon hopes to create a computing interface in the field of artificial intelligence. The interactive experience provided by the combination of voice system, smart speakers and cloud gives users a more adaptable choice.

The combination of Echo and Alexa is shaped to be more humane. Compared with a mobile phone, it is more like a family butler. It remains silent when you don't need it, and waits for your activation at any time when you need it. Through dialogue and communication, it controls all smart terminals in the home, from alarm timing and bed calls to home appliance management, anti-theft system management, car remote start, and in-car temperature control. Alexa helps you connect to the physical world. You need to communicate with it, interact with it, and think about your needs when giving it instructions. Compared with the one-way interest-based information flow that maximizes your fragmented time, Alexa allows you to manage and participate in family life scenes more conveniently.

Similar to smart homes, smart cars are also becoming the next important scene entrance. Smart connected cars integrate on-board sensors, controllers, actuators and other devices, and integrate 5G communication and network technologies to achieve intelligent information exchange and sharing between cars and people, cars, roads, and backgrounds. They have complex environmental perception, intelligent decision-making, collaborative control and execution functions, and can achieve unmanned driving.

After being completely liberated from driving, people's time efficiency and lifestyle in the car will change fundamentally. With the support of rich intelligent sensing hardware, more comprehensive in-vehicle intelligent systems, and real-time network interconnection capabilities, smart cars will bring people a more integrated lifestyle. A trip that can be taken at any time, a conference call while driving, real-time multimedia information push, daily schedule reminders, home smart terminal status reports, playing games, watching movies... Compared with mobile phones, smart cars will bring another change in travel and lifestyle.

The rapidly emerging new generation of intelligent hardware products such as VR, AR, and brainwave controllers are also building new experience scenarios for people. In the future, based on the wide-area wireless coverage and high-speed information channels of the global interconnection achieved by 5G communication technology, the Internet of Things formed by various intelligent terminals will more conveniently introduce the online ecology into various major life scenarios. The days when mobile phones, as the only portable intelligent hardware, monopolized the online traffic entrance will be gone forever. Perhaps in less than ten years, we will look at mobile phones like we look at the former BP machines now, and they will soon complete their historical mission.

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.