360 has little chance of success in returning to its old business of mobile phones

According to media reports, Qihoo 360 has announced a strategic alliance with Coolpad, investing $409.05 million in Coolpad to establish a joint venture, in which Qihoo 360 will hold a 45% stake. As we know, as early as 2012, 360 cooperated with mobile phone manufacturers to make special phones, and once had a war of words with Xiaomi, but soon announced that the special phones were aborted. What are the chances of 360 returning to the old mobile phone business?

We know that from the perspective of the needs of both parties, Coolpad and 360 both have the need for cooperation. From the perspective of 360, seeing that Xiaomi and BAT are currently doing well in the mobile terminal, Zhou Hongyi, who has always refused to admit defeat, is envious and wants to make a difference. According to the third quarter report released by Qihoo 360 this year, the ceiling of its PC user number has been reached, and the growth of mobile security software users will also reach a peak. 360 urgently needs to find new business growth points to break through the current bottleneck.

In addition, 360 has quietly laid out its chessboard in the smart hardware field in the past two years, such as 360 Smart Key, 360 Router, Portable WIFI, Child Guard, Air Guard, etc. So from 360's perspective, 360 needs a hardware platform. For example, it can achieve deep links through deep bundling with Coolpad and integrate its own software business with smart hardware projects to break through the current growth bottleneck, while seeking to achieve profitability through differentiated software services.

In addition, we know that Xiaomi's software and hardware integration model has been very popular in recent years. Xiaomi has built its own content services and cloud service systems such as address book, email terminal, cloud storage, application store, desktop theme, etc. through MIUI. Xiaomi's model based on deep system integration is extremely exclusive. The author mentioned earlier that the core businesses of BAT are all positioned at the rigid needs of users. They have deep roots in their respective fields of search, social networking, and e-commerce to form an ecological magnetic field, which has strong stickiness and irreplaceability. The Xiaomi model cannot isolate the software business of BAT. Security software that lacks strong user stickiness will cause a fatal blow once it is isolated from the system level. For example, if Xiaomi and other manufacturers use the MIUI system to circle enough users to form a scale advantage and create a closed kingdom, once 360 ​​and other related software businesses are isolated from the system level and replaced with mobile security software such as Kingsoft, it will undoubtedly cause a huge impact on 360. 360 must seek an entry at the hardware level to break through this future risk.

Coolpad has long been focusing on the mid-to-low-end battlefield, emphasizing cost-effectiveness, which is consistent with Zhou Hongyi's tone. In the China Cool Alliance, Coolpad is not as good as Huawei in terms of brand influence, chips, supply chain bargaining power, patents, etc. Its sales volume in overseas market channels such as the United States is not as good as ZTE. Huawei and ZTE's main businesses such as telecommunications equipment are magnificent, and Lenovo's PC business is also very dazzling in addition to mobile phones. For ZTE, Huawei, and Lenovo, terminals are part of their key businesses, but for Coolpad, the mobile phone business is everything. Therefore, Coolpad is relatively more anxious and tries to seize various opportunities to seek breakthroughs. For example, Coolpad began to impact the high-end market by playing the security card, and also launched strategies such as free warranty after the mobile phone is rooted. As a security manufacturer, 360 can strengthen Coolpad's security attributes through cooperation such as deep customization of the 360 ​​series security software at the hardware level, which is also in line with Coolpad's need to impact the mid-to-high-end market by playing the security card.

According to industry insiders, some of 360 Mobile Guardian's loyal fans can be converted into Coolpad Dazen mobile phone users, but imagination is beautiful and reality is bleak, because the pain points of mobile phone fans do not overlap with those of users who install a certain software.

360's core businesses, including 360 antivirus software and 360 mobile security, are more "tool"-based. 360's core business is security. As mentioned earlier, compared with the core businesses of BAT, 360 does not have irreplaceable user stickiness in security business. Whether it is PC security or mobile security, it has not formed a core competitiveness that cannot be overturned by competitors. Compared with other related security vendors, 360 is more of a free model to overthrow and occupy users, but it has not formed an irreplaceable core advantage in terms of technology, business model or user business.

In addition, in my opinion, although mobile phone security is a demand of users, it is not a pain point in choosing a mobile phone. Under the current mature smart phone regulation system, mobile phone users' brand awareness is increasing, and security software is not a core consideration when choosing a mobile phone. It is very difficult to break through the current solid market wall in an attempt to make a secure mobile phone that attracts consumers' attention.

In addition, in terms of security, we know that the most well-known mobile phone company focusing on security is BlackBerry. According to relevant data, BlackBerry ranks first in a series of evaluation standards such as system security, application security, and verification, and Apple's iOS ranks second. The reason why BlackBerry phones have a high influence in terms of security is that their system level is based on security. Although Coolpad can deeply customize 360's security software at the hardware level, in the absence of autonomy at the operating system level of domestic mobile phones, the gimmick of secure phones is far greater than reality.

In addition, we know that for the hardware industry, based on Moore's Law, hardware performance increases, costs and configuration prices decrease, and the later you enter the market, the more you lose. For 360, the ultimate goal is to achieve a free smartphone with zero profit.

According to the author's summary of Zhou Hongyi's keynote speech at the launch of the new book "Zhou Hongyi's Autobiography: My Internet Methodology", the author found that Zhou Hongyi believed that the failure of making mobile phones was mainly due to the fact that traditional enterprises must first castrate themselves before transforming to the Internet, and 360's failure in making mobile phones was due to the temporary severance of cooperation with its partners, without the courage to cut off its own vested interests. Zhou Hongyi said, "I suggested that he make a mobile phone with the same dual-core configuration, which is not inferior to Xiaomi. Xiaomi sells for 1999, and I only sell for 999. What a shocking thing to subtract one 1!"

It can be seen from this that Zhou Hongyi’s so-called Internet thinking is nothing new, that is, competing for cost-effectiveness with the same configuration and making money by software. But if Zhou Hongyi still insists on this thinking today, it is obviously no longer applicable. You must know that Amazon’s kindle model is very difficult and has suffered the largest annual loss this year. Although Xiaomi has proposed "not making money from hardware" and relying on content and services to circle users and build an ecosystem, the reality is that Xiaomi mobile phones account for more than 90% of Xiaomi’s profits, and Xiaomi boxes, TVs, Xiaomi accessories and peripheral products account for a negligible proportion of the annual revenue. Although Xiaomi is selling at cost, the small profit of mobile phone hardware is still its main source of profit.

In addition, Zhou Hongyi's so-called Internet thinking, in fact, still has not deviated from the thinking of "escorting user security" and "users first", which is to seize the commanding heights of users in the name of security. In addition, although Coolpad has relatively mature quality control and its supply chain management capabilities are also improving, its positioning is still in the second- and third-tier low-end markets. Coolpad Dashen and Xiaomi are also very similar in model, such as using profits to exchange market price-performance ratio to copy the low-end back-end. In fact, as the mobile phone industry and users themselves become more and more mature, this model has become increasingly difficult to implement. We have seen that the development of domestic mobile phones is to show their swords to the mid-to-high-end market, and competitive factors such as patents and core technologies, hardware processes, operating systems, and brand premiums are all unavoidable.

I have a point of view that still needs to be reiterated here, that is, under the mature rule system of smart phones, if we still don’t get out of the Xiaomi model of low price, cost-effectiveness, hunger marketing, and combination of software and hardware, then success is very slim. In my opinion, if we only make mobile phones from the perspective of our own Internet layout and integration of our own business, the essential purpose of making mobile phones has been biased, that is, starting from our own layout, not from the essential needs of users. The reason why domestic mobile phones have been slow to enter the high-end market is that mobile phone manufacturers have made a fuss about various points such as Internet thinking, cost-effectiveness, and feelings, but there has been no major breakthrough in the core aspects dominated by international giants such as high-end technology, operating system and software and hardware ecology, supply chain system, and brand premium. Naturally, they cannot control the right to speak. At present, returning to the old business of mobile phones is of great significance to 360's layout, but the current smart phone market has passed the wind and the dividends have been lost. In the absence of new models, methods and highlights, 360 has not much chance of winning.

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.