Loss, decline, slowdown, saturation?? The financial report full of pessimistic words and the market full of panic seem to indicate that the golden age of China's smart phones is coming to an end.
According to the latest data released by market research company Gartner, global smartphone sales increased by 13.5% in the second quarter of 2015, mainly driven by the market outside China. In China, smartphone sales are down 4%.
What's worse is the profit. According to the statistics of the Ministry of industry and information technology, in 2014, the average profit margin of China's mobile phone industry was 3.2%, which was 1.7 percentage points lower than the average level of China's electronic manufacturing industry. According to canaccord, Apple's operating profit accounted for 92% of the total operating profit of the top eight manufacturers (including Samsung, Huawei, Xiaomi, Lenovo, etc.) in the first quarter of this year.
The seemingly prosperous domestic mobile phone market is actually facing a miserable situation of meager profits and even losses. Under the homogenization pattern formed by years of competition, domestic mobile phones have come to a new crossroads, and need to find a way of transformation and breakthrough.
Shuffle period coming
"Transformation breakthrough" is not only an eye-catching slogan for mobile phone manufacturers, but also an urgent topic.
In August this year, Lenovo released its first quarter financial report of fiscal year 2015, which showed that the mobile business unit had a pre tax loss of $292 million. In addition to revenue, Lenovo's sales of mobile phones were only 16.2 million in the first quarter, and its global smartphone market share fell to 4.7%.
Lenovo is not the only company in trouble. Xiaomi, as a pioneer in the popularization of smart phones in China, is also experiencing a growth bottleneck. Its performance in the first half of the year showed that the number of smartphones shipped was 34.8 million, down from 35 million in the second half of last year. For the first time in six years, Lenovo saw a month on month decline.
The whole market cake is also shrinking. At present, the penetration rate of smart phones in the domestic market has reached 90%. In June this year, the domestic mobile phone market shipped 38.12 million units, a year-on-year decrease of 10.2%. In 2014, China shipped 389 million smartphones, down 8.2% from 423 million in 2013. Moreover, with the end of the 4G era, the sales of smart phones will continue to decline in the future.
Besides apple, there are only a few markets left, which are also divided by a few enterprises. According to statistics, in the first quarter of this year, Huawei, Lenovo, Xiaomi, Coolpad and other mobile phone companies accounted for 50% of the domestic market share, and the trend of oligarchy is intensifying.
Obviously, with the arrival of China's smart phone shuffle period, domestic mobile phone enterprises need to form differentiated core competitive advantages if they want to survive in the fierce market competition.
Old troubles and "core" opportunities
The high profit of Apple mobile phone comes from the high brand premium brought by its excellent system and hardware manufacturing technology. However, for domestic mobile phones, this has always been a headache.
For example, as one of the core components of mobile phone, the chip directly determines the performance and price of mobile phone.
On the other hand, domestic mobile phones rely too much on mobile chip manufacturers such as Qualcomm and MediaTek. The biggest advantage of domestic mobile phones at present is high cost performance, which is completely based on the chips and integration solutions of mobile chip manufacturers such as MediaTek and Qualcomm. It can be said that the low price of domestic mobile phone is the low price of mobile phone chip and attached scheme.
Since the beginning of this year, with the game between MediaTek, Qualcomm and Intel in the field of mobile chip, chip prices have been falling all the way. However, if several chip companies form a price alliance, the purchase price of mobile phone chips may double.
Such a trend appeared as early as 2012. At that time, it was reported that Qualcomm and MediaTek had privately signed an agreement to protect the market price of chips, which would no longer arbitrarily lower the prices of mobile phone chips.
For the domestic mobile phone enterprises which have reduced their profits to the lowest point, if the price of mobile chip rises or the whole scheme implements paid service, the low-cost advantage will be difficult to sustain. If there is no breakthrough in chip and other aspects, Chinese mobile phone enterprises will face great survival pressure in the future.
In addition to the urgency, the breakthrough of domestic mobile phones in the chip field is also ushering in the best opportunity.
In June 2014, the State Council issued the outline for promoting the development of the national integrated circuit industry (hereinafter referred to as the outline), proposing the establishment of a special industry fund. Only in February, eight enterprises, including CDB finance, China tobacco and Huaxin investment, jointly established the national fund. This fund, which aims to promote the development of China's IC chip industry, will pull 5 trillion yuan into the chip industry in the next 10 years.
At present, the fund has made large-scale investment in China's leading chip manufacturing, design, packaging and testing enterprises to accelerate the formation of China's chip industry chain. And the news that Chinese enterprises purchase foreign chip companies continuously from the market also confirms the driving force of chip funds.
Breakthrough in core independent R & D
However, as we all know, there is a very high technical threshold for the research and development of core hardware such as chips. The technology accumulation of Chinese mobile phone manufacturers at the core hardware level is almost zero. Is there a way out for independent R & D?
At present, the practical difficulty is that there is still a big gap between China's chip and the international first-class standard. For example, in 2014, Intel launched a 14 nanometer process processor, and now the most advanced process in China is still 28 nm. In addition, the lack and backwardness of design software and manufacturing equipment also makes the Chinese chip lack of stamina.
But having difficulties doesn't mean there's no hope at all. The most typical case