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After four or five years of rapid development, major smartphone manufacturers are facing the most difficult time in their history.
Samsung Electronics' performance continued to decline and its market share shrank; Apple's stock price fell 15% in less than a month; Lenovo's net profit in the first fiscal quarter fell 51% year-on-year due to the drag of Motorola's business; HTC, which has been mired in a quagmire, also announced a global layoff of 15%. The second quarter that just passed was also a nightmare for mobile phone chip manufacturers. Qualcomm recently released its financial report, with revenue down 14% and net profit down 47% year-on-year in the second quarter; MediaTek was also not immune, with revenue down 13% and net profit down 49.2% year-on-year in the second quarter.
It is worth noting that if the profits of chip manufacturers continue to decline, it is not ruled out that chip prices will increase in the future. For companies and small and medium-sized manufacturers with insufficient bargaining power and no cost advantages, this will accelerate elimination and market reshuffle.
The reasons behind this include the overall market trend of the industry, such as the gradual saturation of the smartphone market in Europe, the United States and China, the slowdown in growth, and the lack of an explosion in emerging markets such as India and Brazil; and the intensified market competition, where the mid- and low-end markets have long become a red ocean, and the gap between major manufacturers in the high-end market is narrowing. Of course, in addition to this, it is also related to the historical positioning and strategy of each mobile phone manufacturer.
Note 5's lack of innovation will not help Samsung recover
Samsung Electronics, which is experiencing a continuous decline in performance and shrinking market share, today released its latest Galaxy Note 5 and S6 Edge + smartphones in New York, USA, but the prices have not yet been announced.
From the perspective of product configuration, the two phones are almost the same. Both use a 5.7-inch 2K resolution screen, and the processor uses Samsung's own 14nm Exynos 7420 octa-core processor. In terms of camera, both use a rear 16-megapixel and a front 5-megapixel large aperture camera.
Compared with the previous generation, the two products do not have much innovation. They still continue Samsung's dual-curved screen, but the Galaxy Note 5 uses it on the back and the S6 Edge + uses it on the front.
In the past year, against the backdrop of Apple's larger-screen phones and the rise of China's "high-cost-performance army", Samsung Electronics' mobile phone business has fallen into a difficult situation. Some radical analysts even say that Samsung Electronics is becoming the next BlackBerry and Nokia.
Judging from the two products released this time, the gap between them and the previous generation is not long, so that the outside world feels that there is not much innovation. If the price is not adjusted in the future, Samsung Electronics’ downward trend may be difficult to stop.
In the second quarter global smartphone research report just released by market research firm StrategyAnalytics, although Samsung Electronics ranked first in the mobile phone sales list with 71.9 million units shipped and a market share of 21%, it has dropped by 4% compared with the 25% market share in the same period last year. In the Chinese market, Samsung once topped the list with a market share of 30%, but according to statistics from domestic agency Sino, Samsung's market share is currently only around 10%.
Samsung Electronics experienced explosive growth and began to reap the benefits of smartphones in 2012. That year, Samsung launched large-screen mobile phones such as Galaxy and Note, which were positioned in the mid-to-high-end market and laid the foundation for Samsung's core competitive advantage in high-end large-screen mobile phones. Until last year, with Apple launching the 4.7-inch iPhone 6 and 5.5-inch iPhone +, and domestic mobile phone brands focusing on the quality of large screens, Samsung's advantage in large screens was cut in half. Huawei's Mate 7, which competed with Samsung's Galaxy Note 4 at IFA last year, also brought great pressure to Samsung.
According to Huawei's official disclosure, as of May this year, the global sales of Huawei Mate 7 has exceeded 5 million units. In the first half of this year, as Huawei Mate 7 became popular in the market, many domestic mobile phone manufacturers set their sights on mobile phones priced at 3,000 yuan. The final price of Xiaomi Note top version and LeTV Max were locked at 2,999 yuan; mobile phone brands such as ZTE, OPPO and vivo also launched new models priced at 3,000 yuan in the first half of the year.
Under the double pressure from Apple and Chinese companies, Samsung's advantage in large screens is gradually being eroded. Samsung did not announce the total sales of Galaxy Note 4, but foreign media have revealed that the sales of Note 4 have dropped significantly compared to the previous generation Note 3.
In fact, the global mid-to-high-end smartphone market has become saturated. Data shows that global smartphone sales have increased by more than 20% in the past year, but most of the market share has come from the mid-to-low-end market. The high cost-effectiveness strategy of domestically produced products has lowered the threshold for high-end mobile phones from more than 5,000 yuan to 3,000 yuan.
Under the pressure of competition, Samsung Electronics is trying to break through with curved screens and humanized functions. Samsung Electronics Co-CEO Shin Jong-kyun emphasized that he hopes to lead the industry to develop curved screens. However, Samsung urgently needs to solve the problem of supply chain scale support brought about by curved screen technology, and the size of the curved screen market itself is also a huge question.
On the contrary, the chip business is becoming the biggest contributor to Samsung Electronics' profits. Both of the processors released by Samsung this time use the 14nm Exynos 7420 octa-core processor. For Samsung, the growth in chip business profits has partially offset the decline in its mobile business.
From a global perspective, almost all mainstream mobile phone manufacturers have their own chips, including Samsung and Huawei. And the rapidly rising mobile phone manufacturers are also actively deploying their own chips.
Lenovo's transformation pains: market share and net profit fell sharply
Lenovo is also in dire straits.
Lenovo Group released its first quarter results for the period ending June 30, 2015 yesterday. Lenovo's revenue for the first quarter was $10.7 billion, up 3% year-on-year; its net profit was $105 million, down 51% year-on-year. Lenovo Group's announcement on the Hong Kong Stock Exchange showed that it would cut about 3,200 non-manufacturing employees worldwide, accounting for about 10% of the company's non-manufacturing employees and about 5% of its 60,000 employees worldwide.
The financial report also showed that Lenovo sold 16.2 million smartphones during the quarter, up 2.3% year-on-year, but its share of the global smartphone market fell 0.5 percentage points to 4.7%; Motorola contributed 5.9 million units to Lenovo's total smartphone sales, down 31% year-on-year.
According to data from research firm IDC, Lenovo's mobile phone market share in China was 12.8%, 9.5% and 8.2% in Q3, Q4 of 2014 and Q1 of 2015 respectively, a continuous decline; according to data from IHS, Lenovo fell out of the top six in the mainland market in the second quarter.
Lenovo Group Chairman Yang Yuanqing used the term "double whammy" to describe the challenges Lenovo is facing during a phone call. While the new business has not yet gained a firm foothold, the old business cannot keep up in time. On the one hand, the PC market has declined sharply, and Lenovo's PC business has also declined. On the other hand, after acquiring Motorola and IBM X86 servers, Lenovo is still in a restructuring period and is still in reconstruction mode. It will take time to rebuild the business and turn it into a growth engine and profit engine.
Yang Yuanqing even compared the challenges this time to the huge losses Lenovo suffered after the 2008 financial crisis.
As for the mobile phone business, Lao Yao, a former Lenovo employee and Secretary General of the Mobile China Alliance, told Tencent Technology that Motorola was a good card, but Lenovo played it badly. On the one hand, Motorola's R&D strength is still strong; secondly, Motorola is definitely more advantageous than emerging manufacturers such as Huawei and ZTE in cross-patent licensing. However, Lenovo does not pay enough attention to R&D, which is the key to its poor mobile phone experience. Compared with Huawei, Lenovo's investment in R&D in the past 10 years is only US$4.4 billion, which is less than Huawei's R&D cost for the whole year of 2014.
In terms of channels, Lenovo over-relies on operator channels, abandons social channels, and fails to establish its own e-commerce channels. With operators drastically reducing subsidies this year, Lenovo's most dependent operator channels are no longer popular and are facing difficulties in shipments.
At the same time, Lenovo has been relying on the strategy of launching a large number of products to compete for the low-end market, which has made it difficult to change the perception of its low-end brand. It previously lacked the courage to cut off its arm to survive, which made it difficult to reshape its brand image.
Yang Yuanqing had anticipated this. "I told you several times last year that you need to wake up. I even said that you can't wake up even if you hit it with a hammer. You are too slow and are missing opportunities." Shortly after Lenovo's mobile business group announced a major personnel adjustment, with Chen Xudong replacing Liu Jun as president of the mobile business group, Yang Yuanqing said this at an internal communication meeting with the mobile business management team.
Lao Yao told Tencent Technology that the change of leadership in the mobile business group is a sign of awareness of the problem, but what is more important is to reshape the structure of the mobile phone business and seamlessly integrate Lenovo-branded phones with the acquired Motorola phones. This is because Chen Xudong needs to be more powerful and control more resources to complete the adjustment of the business structure.
In a phone call yesterday, Chen Xudong was quite satisfied with his performance in the past two months since he took charge of the mobile business. He said that he had been the fastest in reorganizing the entire business and should be able to meet the company's expectations of him.
Chen Xudong believes that the problem with Lenovo Mobile in the past was that it did not focus on the experience. Once it was launched, it had a bad reputation and it was difficult to recover. In his opinion, to become a mainstream mobile phone, it must first focus on the basic experience, and then carry out limited innovation and combination. This is the foundation of making a good mobile phone. Chen Xudong reflected that Lenovo's mobile phones were a bit over-innovative in the past, or innovated for the sake of innovation. Each generation of products had almost no connection with the previous products, resulting in each generation of products not being able to borrow the advantages of previous products.
For Lenovo, it will take a long time to regain its advantage in the mobile phone market. Xiaomi, Meizu, Coolpad, LeTV and other manufacturers will also face a complex and difficult competitive environment in the future. The reshuffle and turbulence in the mobile phone market are far from over.
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. |
