Domestic mobile phones Xiaomi and Meizu are preparing for a press conference in a hotel in Beijing at the same time this week. I believe many people will feel a little happy.
In August and September of last year, Xiaomi’s annual flagship mobile phone should have been released. However, at the press conference to compete with Meizu, Xiaomi released a brand-new product line-Xiaomi 4c, with a price of 1299 yuan, instead of the expected Xiaomi 5.
As a result, Xiaomi, who claims not to engage in "sea tactics", has developed two sets of new products this year: Xiaomi Note, which focuses on the high-end market, and Xiaomi 4c, which is positioned between Xiaomi and Redmi.
Xiaomi, founded five years ago, has been catching up with Apple and Samsung, and has become the top smartphone manufacturer in China. After building a huge user base through cheap mobile phones, Xiaomi built an ecological chain, hoping to expand into profitable Internet service projects. In December 2014, Xiaomi received $1.1 billion in financing, and its valuation soared to $45 billion, making it an entrepreneurial company with a global valuation second only to Uber.
However, the outside world is worried about whether Xiaomi has encountered a bottleneck in the high-speed growth channel.
The obvious figure is that since the first device was released in 2011, Xiaomi’s smartphone sales have doubled every year. However, in the first half of 2015, Xiaomi’s mobile phone sales reached 34.7 million units, a year-on-year increase of only 33%. This achievement is also less than half of the annual mobile phone sales set by Xiaomi Chairman Lei Jun at the beginning of the year. The goal is to guarantee 80 million units and sprint 100 million units.
Where is Xiaomi 5?
The rise of Xiaomi in China market originated from imitating Apple, but its price is less than half that of Apple. In the face of market criticism, Xiaomi subsequently improved the product design and began to introduce differentiated products.
At the beginning of this year, various analysts predicted that the growth rate of the global smartphone market would slow down this year. IDC also predicted that China’s market growth rate was lower than that of the whole world for the first time, only 2.5%.
Xiaomi, which has been growing at a high speed, has not been spared.
Lv Junkuan, chief analyst of market research firm Gartner Smartphone, told The Paper (www.thepaper.cn), "We observed that Xiaomi’s sales were still concentrated in Redmi series, but in the same price band, Xiaomi was strongly competitive by other manufacturers, such as Meizu and Glory, so its performance in the first half of the year was not as good as expected."
In the second half of the year, Xiaomi still runs through Redmi. Redmi is a thousand yuan machine released by Xiaomi Company, which is positioned lower than Xiaomi. Xiaomi released Red Rice Note 2 in August. Although it was accused by users of "false propaganda" and did not use Sharp or AUO’s screen according to the propaganda slogan, it was still very popular. According to the data released by Xiaomi, the sales volume of this machine reached 2.15 million units in one month, which set a record for the single-month shipment of Xiaomi and Redmi series mobile phones.
It stands to reason that the annual flagship machine can also bring considerable sales. However, this year, Xiaomi 5 was postponed. In this regard, the industry says that Xiaomi 5 is waiting for Qualcomm Xiaolong 820 processor or MediaTek 10-core processor, but these two processors may not be released until the end of the year. Xiaomi considered Xiaolong 810 before, but gave up for various reasons.
"Xiaomi 4c may be to fill the gap (before the arrival of Xiaomi flagship Xiaomi 5)." Wang Yanhui, secretary-general of China Mobile Alliance, told The Paper (www.thepaper.cn).
"Hunger Marketing" is history
Xiaomi is also changing the sales model.
In the past, it was very difficult to buy the latest Xiaomi mobile phone. Even in September this year, a diary of a Wall Street Journal reporter who spent two months buying Xiaomi was madly transferred online. Now, including the latest Xiaomi 4c, users can go to third-party e-commerce channels such as Tmall to buy, or they can go to the offline Xiaomi home to queue up for purchase.
Lin Bin, president of Xiaomi, recently released this signal frequently: "The biggest change of Xiaomi in the past six months is that we have changed from an abnormal e-commerce to a normal e-commerce. The outside may not feel anything, but it is very important to us internally. We call it’ Xiaomi 2.0′. "
As for the reason why I couldn’t buy a mobile phone before, I’m afraid only Xiaomi himself can figure it out. Some people say that this is Xiaomi hunger marketing, and the official said that this is because the production capacity can’t keep up with the user’s demand.
Xiaomi said that the change in sales model is not to cope with the completion of the annual target.
"Xiaomi no longer pursues the first launch of a chip, but is more concerned about whether the mobile phone is stable after it comes out. Under the’ Xiaomi 2.0′ mode, the mobile phone will be sold in large quantities and the quality must be good, otherwise there will be big problems." Lin Bin said.
Opponent "pixel level" copy
Lu Junkuan did not predict whether Xiaomi could achieve the annual target. He said: "The China market showed signs of recovery in the third quarter, and at the same time, we expect the China market to warm up in the second half of the year. The reason is that the main festivals are concentrated in the second half of the year, plus more new machines are released, such as a new generation of iPhone, Huawei Mate S and Samsung Note5. "
Competition in the mobile phone market is still fierce, and other smartphone manufacturers are even trying to copy Xiaomi. Both mobile phone manufacturers such as Lenovo, Huawei and ZTE, and new mobile phone manufacturers such as 360 and LeTV have launched products that compete with Xiaomi mobile phones. "Crazy price wars, homogeneous products, unprofitable business models." Internet analyst Wang Bin said.
Hugo barra, vice president of Xiaomi Global, said in July that Xiaomi’s competitors were chasing the old business model. "I think the model they are currently adopting is the model we adopted maybe a year ago, and we are still innovating."
In 2013, Xiaomi hired the former Google vice president to take charge of international expansion, but at present, Xiaomi mainly enters the Indian market. Xiaomi said that Xiaomi is already the fifth largest mobile phone manufacturer in the Indian market, and India’s smartphone sales this year are 80 million units.
In fact, many local start-up mobile phone manufacturers in China have chosen India as a transit point to enter the international market. This is mainly because the United States and other markets have very strict requirements for patents, and the weak patents of China manufacturers are a common problem. Even so, Ericsson still got into trouble last year and once stopped selling Xiaomi.
"If Xiaomi regards domestic manufacturers as rivals and restrains energy, it is doomed to an increasingly cruel profit squeeze trend, which may destroy its original market space." Fang Xingdong, chairman of Internet Lab, said.
Chen Tong is "quite satisfied" with the TV business.
After several rounds of strategic changes, Xiaomi is currently centered on three product lines: mobile phone, TV and router.
Regarding TV, the government has not released detailed data. Xiaomi, which has not yet been listed, has no obligation to announce a lot of data.
Chen Tong, who jumped from Sina editor-in-chief a year ago and joined Xiaomi as vice president, spent $400 million, less than half, on the $1 billion investment fund that Lei Jun gave him. Chen Tong told The Paper (www.thepaper.cn) frankly that there is still a lot to be done in TV content, such as the membership system of various video websites needs to be opened, and it is not yet possible to watch all paid content with one vote, and cinema movies cannot be broadcast on TV simultaneously. Chen Tong also admitted that after-sales maintenance is Xiaomi’s weakness.
This year, Xiaomi TV "achieved Lei Jun’s expectations, but the long March has only taken one step. The competition is long, and it will not be seen in two or three years, but the Internet TV faction will win in the end." Chen Tong said.
This year, Xiaomi and Letv had a quarrel, which seemed to be a content dispute, but in fact it was a mode dispute. Letv does not rely on hardware to make money, but relies on the mode of charging service fees and ecological services to make profits, which is in direct conflict with the hardware profit model on which Xiaomi depends.
If it can attract attention and sales by mouth-to-mouth, it should be excellent.
Xiaomi Ecological Chain: "We use each other"
Xiaomi is still laying out the ecosystem around the mobile phone, which is the future of Xiaomi.
Xiaomi plans to invest in 100 eco-chain enterprises to replicate the "Xiaomi model", launch low-priced intelligent hardware products, and open brands and traffic to them.
Explosive products such as mi band, Smart weighing scale, Air Purifier, smart plug, etc. began to enter daily life. Xiaomi told The Paper that Xiaomi has invested in about 40 eco-chain enterprises.
According to The Paper (www.thepaper.cn), the relationship between Xiaomi and its eco-chain enterprises is becoming subtle.
Insiders of an enterprise in Xiaomi Eco-chain told The Paper, "Users only recognize Xiaomi’s brand, but not their own. If the goods produced for Xiaomi develop very well, it will be both good and bad for us. We don’t want to be an OEM. I think that we are actually using each other with Xiaomi. "
However, this statement was refuted by Huang Wang, CEO of Huami Technology. "We regard the wearable products of Xiaomi brand as our own brand, do research and development, do sales and do market operations, just like the Amazfit brand, but the user base is different and the marketing methods are different." He told The Paper (www.thepaper.cn). Mi band is made by Huami Technology, and it is the only eco-chain enterprise product that is still out of stock after open purchase.
Some commentators said that it is faster for eco-chain enterprises to expand in Zhang Zhilu and adapt to China. But at the same time, it means that this former subversive has become a typical "Chinese giant"-building barriers by high enough market share and traffic, rather than exporting technology and patents.
Some people also say that this is the story that Xiaomi told the capital market. "Selling a purifier is to get a user, and selling a mobile phone is also a user. In the future, Xiaomi can provide users with more added value in big data mining."
"Xiaomi Company is not valued as a hardware company, but as an Internet company. The standard for measuring the valuation is the number of users." Wang Yanhui said that the value of "running sales" of red rice mobile phone series was also highlighted.
Pan Nongfei, another fast-growing start-up in China, the vice president of DJI Innovation, a drone manufacturer, once commented on Xiaomi: "After several years, Xiaomi has become a $45 billion elephant, but recently it released a new product, a patch panel in 49 yuan. Does China really lack a tens of billions of dollars company to make patch panels? Rejecting the cottage, making products with high brand premium and doing value-added innovation, this road, if the older generation of entrepreneurs and enterprises have no ability, will and courage to take this step, let the new generation of entrepreneurs and enterprises complete this mission. "
"What is the ecosystem based on smart phones? At present, it is far from an outline. If you really have a chance to build an ecology, you need at least a killer application with a billion users. The top two companies with the most opportunities are Apple and Google. These two companies control the operating system and the app store, but their ecosystem is still very uncertain and unstable. " Fang Xingdong said.
