Terminal Wars: Xiaomi's Model Is Not Huawei's Cup of Tea

Recently, Huawei confirmed to the media that Zhu Ping, who returned from overseas, will replace Wang Weijun as the president of Huawei Terminal China, and said that Zhu Ping had already started to familiarize himself with the business in China in March. Huawei Terminal, which mainly sells smartphones , has had frequent personnel changes recently. In addition to Zhu Ping being appointed as the new president of China, Huawei also appointed Xu Zhiqiang as the president of Huawei Terminal's US business. Prior to this, Huawei also appointed He Ming as the general manager of the US business.

Although Huawei explained that these personnel changes were all due to normal reasons, Wang Weijun retired due to health reasons, and the personnel changes in the United States were normal rotations (it is customary for Huawei cadres to rotate every two to three years), there are still analysts who link it to the previous "instructions" of Ren Zhengfei. Previously, Ren Zhengfei, founder and president of Huawei, pointed out at a lunch meeting with the management team of Huawei's Consumer BG: "Huawei's Consumer BG should insist on taking its own path, I am who I am! Don't blindly benchmark Apple , Samsung , and Xiaomi ! I hope that the Consumer BG will not bubble itself up after victory, and don't go astray. So e-commerce companies should not talk about sales, but how much profit they can make."

It is still difficult to say how much the appointment of Zhu Ping, who is familiar with the higher-end overseas market, has to do with Ren Zhengfei's latest speech on "profit over sales", but as the helmsman of Huawei, Ren Zhengfei's every instruction has a huge impact on the development direction of Huawei's terminals. The independence of the "Honor" brand is intended to balance the products of e-commerce and public channels and solve the conflict between Honor and other Huawei products. Honor has definitely succeeded in sales by "fighting to the death" with Internet mobile phone companies such as Xiaomi and Meizu in the e-commerce channel with an independent "Honor" brand, with 4 million units sold in half a year. But in terms of results, now it seems that after a trial on the Internet, after the actual calculation, it has not met the requirement of "making money". Ren Zhengfei is actually dissatisfied with the low-profit "Xiaomi model", "only 30 yuan for a mobile phone", "hype online, sell at a higher price offline" (Huawei Terminal CEO Yu Chengdong), this kind of play is not Huawei's cup of tea.

The "Xiaomi model" of small profits but quick turnover is currently successful, but whether it will ultimately succeed is still controversial, because Xiaomi needs to continuously expand its product line and tell various product stories to continuously expand sales. Once sales stop growing, the "Xiaomi model" is prone to problems. This is probably what Ren Zhengfei calls "bubble formation". Ren Zhengfei urgently called for a stop, possibly because he felt that this model could not continue, or because it was more difficult for Huawei to do it. Unlike Xiaomi, Huawei terminals also have operator channels with larger sales volumes. It is difficult for "Honor" to have small profits but quick turnover without affecting channel sales. In addition, Huawei and Xiaomi have different costs and markets. In order to compete for the high-end mobile phone market globally, Huawei's investment in terminal research and development is very high, even exceeding the annual profit of the terminal. The expenses mainly come from subsidies for Huawei's traditional operator business. In this case, the "Xiaomi model" with low or even no profit was finally deemed unacceptable by Ren Zhengfei after some practice, and Huawei did not want to continue to play this game.

Xiaomi is just making plans for the future, while Huawei is pursuing profits. Ren Zhengfei's "correction" of Honor certainly makes sense. But it will take time to prove who is right and who is wrong.

Huawei's terminal strategy has gone from full of enthusiasm to cooling down, showing that even Ren Zhengfei is taking a rudimentary approach to how the company will respond to the impact of the Internet and initiate reforms. He is no longer so confident. This is not uncommon among Chinese entrepreneurs, including Haier's Zhang Ruimin's latest speech. Faced with an uncertain future driven by new Internet thinking, they are anxious and hesitant, but they have to face it bravely. On June 16, Ren Zhengfei admitted in a groundbreaking collective interview with the media in Shenzhen that "many employees don't listen to us, including senior cadres." So, in the face of the new wave, will the rich experience and vision of old entrepreneurs continue to work this time? Is Lian Po too old, or is it that an old man in the family is like a treasure?

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.