Doomed to fail? Why do home appliance manufacturers repeatedly encounter obstacles in their mobile phone business?

Preface: Traditional home appliances have become very profitable due to price wars and brand wars. In the context of 3C integration, the relatively lucrative mobile phone industry has become the target of many mobile phone manufacturers. After a few years, domestic mobile phones have experienced ups and downs, with mixed feelings. The revenue of mobile phones is difficult to stand alone, but it is a pity to abandon it. Under the lukewarm environment, this spring dream continues.

The mobile phone industry has never lacked new players, ever since domestic smartphones became popular in 2011. Five years have passed, and the market is still a piece of cake that has not been eaten up. In addition to the original traditional mobile phone manufacturers, such as ZTE, Huawei, Nokia, Motorola, etc., a large number of Internet manufacturers and even traditional home appliance companies are also coming in to share a piece of the pie.

In May 2013, Konka released a smartphone named "Van Gogh", which focused on high-definition visual experience.

In early 2014, after making a "billion-dollar gamble" with Lei Jun, Gree's head Dong Mingzhu announced that Gree would enter the mobile phone market.

In early May 2015, after Gree announced its entry into the mobile phone market, Changhong General Manager and Changhong Communications Chairman Liu Tibin announced that “the world is so big, the mobile phone market is so big, Changhong must go and see it!”

In addition, well-known home appliance companies such as Haier, TLC, and Skyworth have already entered the mobile phone industry earlier.

But why have these brands of mobile phones failed to succeed after years of testing?

Gree Electric's operating income in the interim report of 2015 dropped sharply by 13.4%, while its net profit remained the same year-on-year. However, its net profit after deducting non-recurring gains and losses dropped sharply by 18%. This ended Gree Electric's long-standing myth of unexpectedly high growth. Qingdao Haier achieved a year-on-year flat net profit despite a 10% drop in revenue. Konka admitted that it had lost nearly 200 million yuan when it released its financial statements at the end of 2015. And Changhong was expected by financial companies to lose 1 billion yuan after a huge loss in the first quarter of 2015.

It can be seen that the new year of various home appliance companies has not been smooth. The emerging mobile phone sector has not been able to reverse the losses of the companies. So why have these traditional home appliance companies remained unknown after entering the mobile phone industry?

1. Slow pace and missing channels.

In 2011, when China's smartphone market began to grow rapidly, many manufacturers began to reap the benefits of making smartphones. With high profit margins, Huaqiangbei's OEM factories and even knockoffs made a lot of money. At this time, the home appliance industry seemed to be hesitant about whether to enter the mobile phone industry. This one to two-year period of hesitation caused home appliance companies to miss the "golden period" of smartphone development.

Secondly, the lack of channels also made the home appliance industry slow in the development of mobile phones. In the early days of the popularization of smart phones, the best and fastest way to develop was undoubtedly to cooperate with operators and then distribute them to the market on a large scale. In this regard, traditional mobile phone manufacturers headed by "China Cool Union" firmly controlled this channel, and traditional home appliance manufacturers found it difficult to intervene. Although home appliance manufacturers headed by Hisense and Haier also signed underwriting contracts with operators, not only was the volume pitifully small, but the timing was also slightly late.

2. Unclear market positioning and indecisiveness

After entering the mobile phone market, the traditional home appliance industry has not found its own suitable market positioning. It often blindly follows the trend and does whatever is popular in the market, lacking products that can be remembered by the market and consumers. During 2012-2013, Hisense once grabbed some orders from operators, but due to the lack of characteristics and insufficient brand influence compared to "China Cool Union", sales were not good. In April 2012, 360, together with TCL and Haier, launched 360 special machines named "AK47" and "Super Battleship", hoping to compete with Xiaomi. However, the bland appearance design and insufficient optimization of the operating system also made the two models drowned in the vast sea of ​​machines.

Traditional home appliance companies do not seem to have made up their minds to make a difference in the mobile phone industry. The delays in decision-making and brand strategies, as well as the imperfections in marketing and after-sales services, doom them to failure. The underlying reason may be that the main profit point of these companies is still in the home appliance industry. If they invest heavily in the mobile phone industry, they will be happy if they win, but if they lose, it may affect their original performance.

3. Constraints of previous successful models and oppression from emerging Internet companies

The success of traditional home appliance manufacturers lies in the fact that they learned foreign technology and then achieved success by reducing sales prices and improving competitiveness through low costs in the supply chain and production links. This is similar to the policy of Lenovo in China, which focuses on the "trade, industry and technology" approach: first open up the market with price and sales, and then focus on production processes and internal core technologies. This is understandable in the home appliance industry, which is slow to innovate, and the success of these companies has also proved the feasibility of this model. The traditional home appliance industry is immersed in the original successful model, and it is nothing more than a pipe dream to want to apply this model to the mobile phone field.

First of all, as an emerging industry, the smartphone is far less sophisticated than traditional home appliances. The constantly evolving innovations make up the differences between mobile phones of different brands and also form the driving force for consumers to buy them. Ordinary mobile phone products may not be eliminated by the market, but they certainly won’t have too many sales. Traditional home appliance manufacturers have less accumulation in communication technology and cannot compete with the original old mobile phone manufacturers: they cannot compete with the emerging Internet manufacturers at the software level. The lack of core technology makes it difficult for mobile phone products launched by traditional home appliance manufacturers to succeed.

Moreover, the low-cost advantage that traditional home appliance manufacturers focused on building through supply chain and production links has also been ruined by today's Internet manufacturers. In the absence of other profit points, especially software, traditional home appliance manufacturers who can only rely on hardware to make money are obviously unable to keep up with Internet manufacturers in terms of cost performance.

Conclusion: The domestic mobile phone market is already a market with increasingly fierce competition. It is not easy for any brand to gain a foothold. It is even more difficult for traditional home appliance manufacturers to succeed in the mobile phone industry after losing various advantages. It is believed that traditional home appliance manufacturers should do a better job in their own home appliance products, integrate the current consumer demand for smart home appliances, and improve their competitiveness and gain a place after continuously improving their own innovation and technology accumulation. After all, the next step of Internet manufacturers has already aimed at the direction of smart home.

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.