Shulou(Shulou.com)11/24 Report--

2022 may be the most challenging year for the smartphone industry.

Under the combination of many factors, the domestic smartphone market has experienced a rare downturn. However, in summing up 2022, Hu Baishan, executive vice president and chief operating officer of vivo, gave different keywords.

He called this year the year of vivo's high-end market confidence. In this year, vivo has become more and more clear in the deployment of internal resources, product layout, technical direction, personnel layout and so on.

In retrospect, vivo managed to catch both hands. On the one hand, it firmly ranks first in the domestic market in terms of shipments; on the other hand, it grasps the high-end market and achieves the second place after Apple.

Behind these achievements is also the result of vivo's "burying his head". Through the continuous investment and breakthrough in the chip, image, OS and other parts, the internal power of vivo is becoming more and more solid, which will also help vivo to move forward steadily in the future competition and continue to gain the lead of comparative advantage.

Multi-line break through the high-end market

In recent years, the high-end market has become the focus of domestic mobile phone manufacturers.

As the mobile phone industry enters the stock era, the overall sales are showing a downward trend. However, it is worth noting that the absolute sales of the high-end market of more than 4000 yuan in the domestic market did not decline, but increased slightly.

In Hu Baishan's view, one of the reasons behind it is that although the overall replacement cycle of users is lengthening, the replacement cycle of high-end users is not so much. For middle and low-end market users, mobile phones will continue to be used as long as they can be used, while for high-end market people, they can be changed whenever they want.

"the road of high-end phones is inescapable for every brand. Whoever can take the lead in obtaining the due market position in this place will continue to gain the lead of comparative advantage in the future competition." Hu Baishan said.

Impact on the high-end market, on the one hand, due to changes in user demand. In the functional phone era, 2-megapixel photography is already good; in the smartphone era, the screen is larger and the memory configuration has to be quickly upgraded, and mobile phones even begin to replace other consumer electronics in many niche scenes, such as the replacement of cameras and the replacement of tablets by folding screen phones. For high-end users, whether they are taking photos or business scenes, they have higher and higher requirements for mobile phones.

On the other hand, second-hand mobile phones are also bringing changes to the pattern of mobile phone manufacturers. For example, Apple's high-end phones sell for about 2000-3000 yuan, which has a great impact on the low-and middle-end market of the Android camp. If you do not do a good job of high-end phones, Android camp manufacturers will face great market challenges.

Vivo's product layout strategy at the high end of the market is to walk on multiple legs.

One is the X series. This year is the 10th anniversary of the birth of the vivo X series. The price of the X1 in 2012 is 2498 yuan, while the starting price of the X90 series released a few days ago has reached 3699 yuan. It is obvious that the price of each generation of X series is going up. According to the latest data, sales of vivo's newly released X90 phone have tripled compared with the previous generation of vivo X80, while the vivo X90 Pro and X90 Pro + have quadrupled that of the X80 Pro.

Among them, the X80 series is regarded by Hu Baishan as a milestone product with the original X1. On the X1, vivo found the feeling of selling 2498 yuan, while on the X80, he found the confidence to sell 4000 yuan. "X80 is the second landmark product in the X series, and it is the foundation war for the X series to continue to gain its due market share to the high end." It also gives vivo a better grasp of the X90 series, he said.

Judging from the market data, this is true. According to Counterpoint, vivo's high-end market share of more than 3500 yuan in the second quarter of 2022 was 13%, second only to Apple and double the 6% share in the second quarter of 2021. Driven by the success of the X80, vivo grew 504 per cent year-on-year in the higher-end range ($600,799). In the second quarter of 2022, the average sales price of vivo high-end products reached 6170 yuan, a new high.

Another way for vivo to be at the top end of the market is folding screens.

In April this year, vivo launched its first folding screen phone, the X Fold, which starts at 8999 yuan and begins to attack the higher-end market. According to the data, vivo ranked third in the folding screen market with 17.6% share in October 2022, and the breakthrough in folding screen phones gave vivo 7.84% share of the 7K + Android market for the first time.

"this year is the year when vivo's confidence in the high-end market is established." Hu Baishan said that the X80 and X Fold products have played a great role in unifying ideas within vivo. With this year's process, vivo has gained great confidence in next year and the year after next, and has made a greater improvement in internal skills than in the past.

Restraint in the face of market turmoil: firmly ranking first in China

In Hu Baishan's view, serving high-end users well is also a huge drive to the internal capabilities of vivo. If you serve the high-end users well, these capabilities can be devolved to the mid-end.

From X80 to X90, the hardware, imaging and OS capabilities of vivo continue to improve. After these capabilities are devolved, the mid-range experience will be greatly improved. For example, to calculate photography capabilities, vivo devolved many algorithms to 2000-4000 yuan models; in terms of hardware, all mobile phones worth more than 2000 yuan were equipped with optical anti-shake hardware at the end of this year.

While gaining a foothold in the high-end market, vivo has also refrained from fighting a price war in the middle market, such as the S-Series pricing strategy. Hu Baishan believes that in the stock market, radical prices can not lead to a substantial increase in share, and may even lead to vicious competition.

It is also worth noting that vivo also has a sub-brand iQOO.

Previously, vivo owned three brands: NEX, vivo and iQOO, but NEX actually coincided with iQOO in the direction of new technology. In the past two years, vivo has reorganized these brands, NEX series products have been reborn in the X series, and the responsibility of new technology exploration has been placed on the iQOO series.

The adjusted iQOO brand also focuses on the middle and high end of the market. IQOO's digital series and vivo X series are almost the same in pricing, but there are differences in direction. Among them, the X series focuses on images, while the iQOO digital series focuses on better performance and game experience.

"iQOO is doing very well in the market of 2000-4000 yuan and more than 4000 +, and we are also very confident about iQOO next year." Hu Baishan said.

Data show that iQOO continues to gain market recognition with its good product power and competitive price positioning, and its market share continues to increase, reaching 4.6% of the domestic market in the third quarter of this year.

In addition, with the breakthrough of multi-brand layout and multiple product lines, vivo has also achieved good results this year. According to data released by IDC, vivo ranked first in domestic market shipments in the third quarter of 2022, with a market share of 20.0%, making it outstanding in the sluggish mobile phone market.

Immerse yourself in the cause: continuously invest in the underlying technology

On vivo, "burying one's head and planting a cause" is one of the key words most frequently mentioned by founder Shen Wei.

In the 2021 vivo New year Open letter, he said: "because you decide the fruit, bury your head in planting the cause, and the fruit will come naturally." The market performance of vivo in 2022 is also the result of "burying one's head".

Hu Baishan, for example, from the X80, vivo began to grow "cause" in the high-end market. The continuous investment and breakthrough of vivo in the chip, image, OS and other parts, so that many users see, experience, and even word of mouth, thus forming a relatively positive cycle.

He believes that "high-end machine" and "high-end machine" are actually two different concepts. High-end machine is to pile up a bunch of things and sell it at a higher price, but the gross profit is not necessarily good, while high-end machine is when users recognize your brand, recognize the value brought by product differentiation, and then begin to like your brand and accept your products.

For mobile phone manufacturers, technological innovation is an important breakthrough to achieve differentiation and high-end.

In recent years, vivo has made a long-term investment in chip, OS and other underlying technologies. Hu Baishan revealed that vivo currently has a team of more than 1000 people specializing in images, including algorithms, hardware, and tuning; the OS team has more than 3000 people, covering artificial intelligence, underlying algorithm transformation, and so on; at the chip level, samples of image chips V1, V1+, and V2jue V3 have been launched immediately to prepare for the second half of next year.

In terms of technological innovation, vivo also adopts the mode of self-research and cooperation.

On the self-developed chip, vivo chooses coprocessor rather than SoC. Hu Baishan explained that SoC is made up of two parts. One part is the public architecture, for example, every year ARM releases the latest CPU and GPU architecture, which is an open ecology; the other is a closed-loop ecology, and dedicated image algorithms and chips are typical closed-loop ecology. The advantage is that you can do the whole ecology well without the participation of too many people.

"for these public parts, we invest less, but for dedicated parts, we invest more and focus resources better." Hu Baishan said that through this continuous superposition, vivo, together with the best partners in the industry, believes that the gap with Apple in products will become smaller and smaller, and it has even begun to gradually lead Apple in some places, such as photo portraits, night scenes, video night scenes, and so on.

"I believe that with this uninterrupted process, Apple users should keep trying our phones, and after using them, they will think that our phones are still very good, with many long boards and no obvious shortcomings, so as to form a good reputation for recommendation."

Hu Baishan believes that with the continuous efforts of Android manufacturers including vivo and the gradual recognition of users, the Android camp will gradually narrow the gap with Apple in the high-end share in the future.

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.