How can domestic mobile phones survive without the aphrodisiac of operators?

On September 17, the news that Coolpad laid off 10% of its employees in 2 hours went viral on the Internet. Coolpad explained that it was not a layoff, but a change in channels - Coolpad and its channel partners invested 1 billion yuan to build a joint venture, and due to work needs, the company planned to send 10% of its employees to the joint venture. As a result, some employees were unwilling to do so and revealed to the public that Coolpad was laying off employees at a rapid pace.

Coolpad's channel reform is a self-adjustment under the general environment. In the past two or three years, Coolpad has achieved rapid growth and has become a first-tier domestic mobile phone company. Its domestic market share even exceeds Huawei and ZTE, and is on par with Lenovo. In terms of domestic 4G mobile phone market share, Coolpad has topped the list for many consecutive months.

However, only the fish knows whether the water is hot or cold. All domestic mobile phone manufacturers, including Coolpad, have sacrificed profits in the past to gain market share. Their shipments have gradually increased, but they have not made much money - a large number of low-end phones have led to their gross profit being too low, and the brand premium cannot be shown.

It can be said that China Cool Alliance was created by China Mobile, China Unicom and China Telecom using "aphrodisiacs". Telecom operators' "aphrodisiacs" are "arsenic" to mobile phone manufacturers. Once you become too dependent on operators, you will suffer from chronic poisoning. In particular, when operators reduce procurement subsidies, China Cool Alliance will be greatly impacted, and in serious cases, it will become sluggish. In this situation, it is particularly important to change the channel strategy in advance and reduce dependence on operators.

Ren Zhengfei awakens Huawei's terminals

Earlier this year, Huawei's godfather Ren Zhengfei said at a lunch meeting of the consumer BG management team, "Making 30 yuan from a mobile phone, what kind of high-tech is that?"

Ren Zhengfei believes that Huawei's e-commerce brand has an element of opportunism. He warned the Consumer BG team not to compare themselves with Xiaomi, and not to compare their own advantages with others' disadvantages. The key is to put profits first, and making money is the real skill.

Under Ren Zhengfei's "knocking", Huawei's terminal business turned around in time, cut low-end products, and recently launched mid-to-high-end products such as Mate7 and P7. P7 has achieved good results, with sales exceeding 2 million units in two months, and the newly launched M.ate7 has received high praise from the industry.

When the P7 was released, Huawei Consumer BG CEO Richard Yu said that operators often use low-end phones to attract users, and if mobile phone manufacturers follow the operators, they will eventually drag themselves down. In his opinion, over-reliance on operator channels and pushing a large number of ultra-low-end products will lead to a road of no return.

Huawei has suffered losses before. Earlier, it did OEM in overseas markets and cooperated with foreign telecom operators to launch a large number of white-label mobile phones without Huawei's logo. The Huawei logo could only be seen on the battery. At that time, Huawei's mobile phone shipments were large, but it led to Huawei's mobile phones not making any progress for a long time, and it lowered Huawei's brand, and once faced the risk of being sold.

Following the operators, life was passable when the weather was fine. However, as the operators' user growth slowed down and even turned negative, subsidies were significantly reduced this year. This is very unfavorable for mobile phone manufacturers such as Huawei, ZTE, Lenovo and Coolpad that rely more on operator channels.

If Huawei continues to follow the pace of operators, its future situation will be very embarrassing. That is why Richard Yu recently stated that he would reconsider the relationship with operators and no longer cooperate with operators to promote low-end mobile phones. In the second half of the year, Huawei began to focus on e-commerce channels and compressed operator channels, cutting more than 80% of models and retaining only high-quality models. Low-end models that cooperated with operators were mercilessly killed by Huawei.

ZTE is trying to heal its wounds

Compared with Huawei, ZTE discovered the crisis earlier and took the lead in adjusting its strategy at the end of last year.

Among domestic mobile phones, ZTE was once a banner, and it has been the leader of domestic mobile phones for many years. Its mobile phone shipments have been among the top 5 in the world a few years ago. In 2011, the author had a face-to-face communication with He Shiyou, the then head of ZTE Mobile. He cared too much about shipments, and the goal he shouted at the time was to enter the top 3 in the world in 3 years. He believed that if the shipments could not be increased, there would be no brand to talk about.

Due to its obsession with shipments, over-reliance on operator channels, and long-term lack of R&D investment, ZTE's mobile phones have made slow progress in the past few years, and its brand image has given people a low-end impression. In 2012, ZTE could not produce a product priced above 2,000 yuan, and the highest price on JD.com was 1,799 yuan.

How can domestic mobile phones survive without the aphrodisiac of operators?

In the second half of last year, the troubled ZTE realized the seriousness of the problem and replaced He Shiyou, the hero of ZTE mobile phones, with the younger Zeng Xuezhong and reorganized the mobile phone team.

In order to meet the customized needs of operators, ZTE once produced a large number of ultra-low-end mobile phones. This approach greatly consumed resources. Ye Weimin, senior vice president of ZTE, admitted that ZTE's mobile phones had taken some detours in the past, and the simple approach hurt the company's brand premium. Data shows that ZTE's operator-customized mobile phones reached 176 models last year, and it did not form a high-quality product line, and many models had low shipments.

After Zeng Xuezhong came to power, he cut off a large number of models, leaving only competitive models. This year, the position of ZTE's sub-brand Nubia mobile phone has been strengthened, especially on March 29, when Peng Liyuan accompanied Xi Jinping to visit Germany to watch the China-Germany Youth Football Friendly Match, a photo taken with a white mobile phone appeared on the Internet, arousing the curiosity of the Chinese people. This mobile phone with excellent craftsmanship is the "Nubia Z5 Mini", which is called the "Mother of the Nation Mobile Phone".

ZTE's Grand S series has become a new benchmark. During his state visit to Tajikistan on September 12, Chinese President Xi Jinping presented the Grand SII to Tajikistan as a state gift. Grand SII is a flagship launched by ZTE in April this year. Whether it is photography or sound effects, it has a high level and has its own characteristics in terms of security.

Although ZTE's mobile phone market share is declining, this is the pain that ZTE must go through. ZTE has lost too much homework in the past few years, and it needs time to make up for it. As long as the direction is right, it will continue along the existing path and strengthen its high-quality products, and ZTE is expected to stand up again.

Coolpad's temporary change of formation

Compared with Huawei, Coolpad is more dependent on operator channels. Among domestic mobile phones, Coolpad is the only one that treats operators as users. This is related to Coolpad's rise. In the early days, it mainly focused on the CDMA market and its products were all customized by operators.

Coolpad has won the trust of operators by cultivating operator channels. In recent years, Coolpad has been the most active in promoting 3G and 4G mobile phones among all mobile phone manufacturers. While other mobile phone manufacturers were waiting and watching, Coolpad went all out to seize the industry's first opportunity.

There are also disadvantages to cooperating with operators - you have to revolve around the operators, and it is difficult to give full play to your own style and personality. In the long run, its brand image will often be diluted. In the case of Coolpad, although its products have a high market share, its profitability and brand reputation are average.

Coolpad's revenue in the first half of 2014 increased by 54.8% year-on-year to HK$14.934 billion, but its profit was only HK$412 million. The outside world believes that as the subsidies from operators decline, it will be even more difficult for Coolpad to make money in the future if it does not change. In 2014, the terminal subsidies from the three major telecom operators will be reduced by 10 billion yuan. As the smartphone market gradually becomes saturated and the growth rate slows down, Coolpad is forced to not rely too much on the three major operators.

The channels are mainly divided into operator channels (mainly represented by Huawei, Coolpad, ZTE and Lenovo), social public channels (mainly represented by OPPO, Gionee and VIVO) and e-commerce channels (mainly represented by Xiaomi, Honor and Coolpad Dashen). OPPO, Gionee and VIVO have the most solid channels, penetrating into third- and fourth-tier cities. They have strong market adaptability and high gross profit. This also shows that social channels are of great significance to mobile phone manufacturers.

Although Coolpad has invested in social channels for several years, it has not made any major breakthroughs, especially in third- and fourth-tier cities, which gives people a "lame" impression in terms of channel construction. In view of the complex market situation of operators, Coolpad announced that it would jointly invest 1 billion yuan with channel partners to establish a joint venture company, with both parties investing and participating in the shares to share weal and woe.

At present, domestic mobile phones are basically fighting in the mid-to-low-end market, and the price war is intensifying. Although domestic mobile phones are booming, and the shipments of Huawei, Lenovo, Xiaomi, and Coolpad are among the world's top, this feast of benefits actually has little to do with Chinese manufacturers. Apple and Samsung have grabbed more than 90% of the profits in the global mobile phone industry. "Coolpad used to launch more than 50 products every year, but now it focuses on the Grand View series, S series and K series. It will cut about 30% of low-end products and allocate more resources to mid-to-high-end products." Coolpad Vice President Cao Jingsheng said that the main purpose of establishing a joint venture this time is to enhance the strength of Coolpad's social channels, sell more mid-to-high-end mobile phones, and improve the company's profit margin. Specifically, Coolpad will transfer about 10% of its employees to the new joint venture, and focus on the distribution of Coolpad's mid-to-high-end products. Regarding the arrangement of employees, Cao Jingsheng said that for some employees who are unwilling to go to the joint venture, Coolpad will compensate and deal with them in accordance with national laws and regulations.

However, whether Coolpad's high-end brand can be recognized by social channels is a big problem. In the past, Coolpad's high-end brand was mainly promoted through operator channels. How can Coolpad and its newly established joint venture solve this problem?

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.