OPPO and vivo outperform Huawei: a victory of pragmatism

In 2016, while the overall structure of the global smartphone market improved and stabilized, the internal structure of the regional market changed more drastically than before. The domestic smartphone market has entered an era of great changes, and the four major domestic brands of Huami, Ou and Vivo are showing signs of taking turns to take the stage.

In the just-concluded third quarter, data from multiple data research institutions showed that OPPO and vivo replaced Huawei to take the first and second place in China's market share that quarter.

Behind this change, the further signal released is that consumers' demand for products has shifted from sounding good about parameters to actually being good with them. Innovation guided by consumer demand is the innovation that can truly be recognized by the market. Against the backdrop of major changes, innovation guided by consumer demand will become a new trend in industry innovation.

1. The smartphone market in the third quarter experienced growth amidst both changes and constants

Judging from data from multiple sources (HIS, CounterpointResearch, IDC), the global smartphone market in the third quarter continued its development trend since the first quarter of this year, with the top five still occupied by Samsung, Apple, Huawei, OPPO, and vivo.

Taking IDC data as an example, Samsung is still far ahead in overall shipments, while domestically produced products are developing rapidly. Huawei, OPPO, and vivo all shipped more than 20 million units in the third quarter. In terms of global market growth, Huawei, OPPO, and vivo have become the minority that have achieved rapid growth in the market. Data shows that these three manufacturers achieved year-on-year growth rates of 23%, 121.6%, and 102.5% respectively in the quarter, far ahead of the 1% growth rate of the global overall market share.

While the global market is growing slowly and its ranking is stable, the domestic smart market landscape presents a completely different picture, with growth momentum far exceeding the global average and more intense competition.

Overall, the shipment volume of smartphones in China reached 115.1 million units this quarter, a year-on-year increase of 5.8%, outperforming the market. OPPO and vivo made a comeback this quarter, surpassing Huawei and becoming the first and second place in the Chinese market for the first time. Data shows that in the third quarter of this year, OPPO and vivo shipped 20.1 million and 19.2 million units in the Chinese market respectively, accounting for 17.5% and 16.7% of the domestic market share.

2. What does the counterattack of vivo and OPPO indicate?

It is indeed surprising that OPPO and vivo can overtake Huawei this quarter. Although whether this trend can continue remains to be seen in the fierce competition among domestic brands. However, the signal released by this counterattack is enough to excite the market. First, it proves that OPPO and vivo have become Huawei's most troublesome opponents in the domestic mobile phone market, and Huawei, the domestic big brother, is not unchallengeable; second, it proves that in the face of consumer demand, technical patents are not a universal key, and innovation in the face of consumer demand has become more important.

As I said in my previous article: "Patent technology is important, but its role in supporting is often overestimated in reality and often becomes a means of publicity. In fact, whether technology patents can guarantee the long-term prosperity of enterprises and whether they can promote products to far surpass competitors is debatable. There is always a wall called user demand between technology products and consumer choices. If the products made cannot meet the needs of consumers and hit the G-spot of consumers, then no matter how strong the technology is, it will be useless. Products are a competition of technology, but it is a more meaningful competition of technology."

After all, if any patented technology is to be transformed into a product, it must ultimately be aimed at consumers.

From the perspective of actual consumer demand, in the era of consumption upgrading, consumers purchase products with a focus more on their core needs rather than just buying parameters or technology.

Compared with the short-term hormone stimulation brought by crude configuration stacking, innovation that meets core needs and solves real pain points can gain lasting favor from consumers. The trend brought by this market change is that technological innovation that can meet the core needs of consumers and is consumer-demand-oriented will become the real innovation direction.

3. Innovation driven by consumer demand has become a new trend in the industry

As for the winners of this current battle, we don’t see blind hardware stacking on their products, nor are they designed for running scores, but what you can see is that they have a clear target understanding and core definition for their products, and their product research and development and innovation can quickly meet the core needs of their target user groups.

For example, vivo initially used high-frequency music applications as a breakthrough point, and used HiFi technology of customized chips to solve the pain point of poor sound quality of smartphones under Qualcomm chips, forming its own unique advantage; then it occupied the high ground of domestic photography with its camera product Xshot; under the rigid demand of selfies by the whole people, it also promoted its self-developed 16 million soft light selfie to target users. During this period, it kept up with the industry trends, and never fell behind or even led the industry trends in full metalization, thinness, large screen, high definition, fingerprint recognition, large running memory and storage. For example, it was the first domestically produced to use a dual-curved screen and 6G running memory.

It is precisely this focus on meeting consumer needs at different levels rather than blindly piling up hardware that led vivo to be awarded the "2016 China Most Innovative Enterprise Award" together with IBM, Inspur Group, Microsoft and other companies at the 2016 China Innovation Summit and the annual China's Most Innovative Enterprise Awards Ceremony.

In addition to vivo, the five major international giants are actually moving towards the trend of R&D and innovation guided by consumer demand.

As an example we see:

In order to meet the needs of the Chinese market, Samsung has specially launched the Galaxy C series of products developed specifically for the Chinese market. In terms of its product system UI, its design is also closer to the usage habits and needs of Chinese consumers, such as the launch of the quick red envelope grabbing function, beauty selfie, etc.

Apple cooperated with Tencent Mobile Manager on iPhone 7 to launch the function of identifying, reminding and blocking nuisance calls;

Huawei, which was surpassed this time, is also an active member of this transformation. We can see that in the face of the rigid demand of young users for selfie beauty, Huawei also launched the Huawei NOVA smartphone specifically for the young market and focusing on selfies to meet the needs of young consumers, changing its previous masculine and rough atmosphere...

It can be said that the top five companies in the industry are all upgrading their products and innovating in research and development based on consumer demand. The common transformation of the top five companies has announced to the industry that innovation based on consumer demand will become a new trend in the industry.

Last words

On the surface, the smartphone market is entering a dead end of innovation bottlenecks, but the market has not become calm because of this. On the contrary, the market changes have become more turbulent. In this competition for the first place, it is not surprising that one party takes the stage after another.

However, it is important to note the changes in consumer demand trends and use them to guide the direction of R&D innovation.

Judging from the transformation of the five giants mentioned above, in the period of consumption upgrading and stock replacement, innovation methods oriented towards consumer demand are replacing the previous useless and showy innovations, and the R&D and innovation of smartphones are entering a new era centered on practicality.

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.