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

2022 is coming to an end, and the "downturn" is still the main theme in the terminal market represented by smartphones.

Although the overall environment for the whole year is not good, domestic mobile phone manufacturers have tried their best to adopt measures such as rushing to the high end, entering the folding screen, self-developing chips and power ecology, in order to offset the losses caused by declining sales, and to make continuous breakthroughs and innovations in the "new track", fully demonstrating the exuberant vitality and strong industrial resilience of China's mobile phone industry.

Overall sales are in the doldrums, and domestic manufacturers have collectively attacked the high-end market in recent years. The global smartphone market is affected by a variety of factors, and shipments show a downward trend. In 2022, this trend is becoming more and more obvious.

Global smartphone shipments from January to September 2022 were only 902 million units, down 8.88% from a year earlier, according to third-party research firm IDC. In China, according to data released by the Ministry of Industry and Information Technology, domestic smartphone shipments from January to September 2022 totaled 196 million units, down 21.1% from the same period last year. According to the third-quarter global smartphone market report released by Canalys, domestic smartphones fell sharply. In the third quarter of this year, for example, vivo, OPPO, Glory and Xiaomi fell 21.4%, 26.8%, 14.8% and 15.9%, respectively.

In this situation, domestic mobile phone manufacturers have to explore new breakthroughs, and the collective impact on the high-end market has once again become its key choice to make up for the decline in sales. Therefore, various high-end models such as Xiaomi 13, vivo X90, OPPO Find X5, OPPO Reno9, one plus 10, Huawei Mate XS2, Huawei Mate50, Glory Magic V, Glory Magic Vs and so on.

However, although the ideal is "plump", the reality is very "bony". If the retail price of 5000 yuan is used as the threshold for high-end phones, according to data released by CINNO Research, Apple's share of the domestic high-end mobile phone market was 79.2% in the second quarter of 2022, 69.0% in the second quarter of 2021, compared with 48% in 2020.

However, the market share of domestic mobile phones in the middle and high end of more than 3000 yuan has increased. According to data released by Counterpoint, in the first quarter of this year, vivo topped the list with a 28.2% share of the mid-to-high-end smartphone market ($250,399). In the second quarter, vivo's sales in the domestic high-end mobile phone market (more than $400) increased by 91% compared with the same period last year, increasing its share from 6% to 13%, making it a high-end brand second only to Apple in domestic market share.

Although on the whole, there is still a gap for domestic mobile phone manufacturers to "rush higher" to challenge Apple, with the unremitting efforts of domestic manufacturers, it should be reasonable to continuously close the gap with Apple at the experience level in the future high-end market. the key still depends on the continuous investment of domestic manufacturers in innovation.

Pile up the folding screen "new track" and usher in the "small best part" as mentioned earlier, the smartphone market as a whole has been in the doldrums since the beginning of this year, compared with the large growth of folding screen phones against the trend, and has become one of the few bright spots in the smartphone market.

Sales of folding screen phones in China reached 723000 in the third quarter of 2022, up 114% from a year earlier, and some of the flagship folding screen phones are hot, according to research firm CINNO Research. Market research firm Omdia predicts that global shipments of folding screen smartphones will reach 61 million units by 2026, with a compound annual growth rate of 46.6% from 2021 to 2026, when the penetration rate of folding screen phones will reach 3.6%.

In fact, many mobile phone manufacturers have regarded folding screen mobile phones as a new profit growth point, constantly strengthening research and development, continuously improving on traditional technical difficulties such as flexible screens and hinges, and at the same time putting more emphasis on practical selling points. including thickness, waterproof and so on, further develop in a reliable and practical direction.

From the price point of view, since the beginning of this year, the prices of folding screen mobile phones launched by major brands have also shown a downward trend, falling from about 10,000 yuan before to about 8000 yuan now. The average global price of a folding screen phone has fallen from more than $2000 in 2019 to about $1500 in 2021, according to Canalys.

By the end of the year, domestic manufacturers set off an upsurge of folding screens. In November, Honor Mobile launched the new generation of folding screen Glory Magic Vs series, while Huawei launched its second vertical folding screen phone, Huawei Pocket Sport, on December 11, Xiaomi launched the new color matching MIX Fold 2 folding screen, and on December 15, OPPO released a new generation of flagship Find N2 series of folding screens, including horizontal folding flagship Find N2 and vertical folding product Find N2 Flip.

At present, with the exception of Apple, all head phone manufacturers have entered the "track" of folding screens. According to incomplete statistics, a total of 11 new folding screens will be on the market in 2022, with an average starting price of about 8907 yuan. Compared with last year, the average starting price of the folding machine is reduced by about 2,000 yuan. Although manufacturers have made a lot of efforts in promoting the cost reduction and thinning of the folding machine, the folding machine is still in the stage of "losing money and shouting".

As for how to reduce the cost, most mobile phone manufacturers think that it is necessary to reduce the cost of the whole supply chain through mass production. That is, by making better products, let more people get a good experience and buy, and then reduce costs. Of course, at least millions of sales are needed to cover costs.

From this point of view, although the folding screen mobile phone has become a bright spot in the market, it still does not have much substantial help to domestic manufacturers in terms of actual revenue and profits. However, domestic manufacturers have piled up folding screens to reduce costs in a short period of time, allowing the market and users to enjoy the new experience brought by folding screens, which is a wise choice for domestic manufacturers in the downturn of the smartphone market.

Self-research chips and ecology, the effect of differentiation remains to be tested by the market. 2021 is a year for domestic mobile phone manufacturers to "show their cards" to the underlying capabilities, and by 2022, a new generation of self-research chips will begin to take turns.

For example, during the INNODAY Future Technology Conference held at the end of the year, OPPO released its second self-developed chip, Mariana Y's flagship Bluetooth audio SoC chip, which shows that its team has the ability to design a "computing + connection" Bluetooth SoC platform. And OPPO's first generation of self-developed chip is the image NPU Mariana X, from the evolution route, is taking the team ability constantly "jigsaw puzzle" route.

Up to now, OPPO's Mariana X chips have been commercially used in Find X5 series, Reno8 series and Reno9 series, shipping more than 10 million pieces. The new folding screen Find N2 series released at the end of the year also carries the chip and matches the Hassel image capability.

In contrast, vivo's self-developed chip iteration is relatively fast. After releasing the V1 image ISP chip last year, V1 + and V2 chips have been iterated out one after another. At present, several iterative V-series chips under vivo, after being first commercialized in the high-end X-series, are also beginning to be imported into the sub-brand iQOO flagship models with parallel pricing. For example, the recently released iQOO 11 series is equipped with a new V2 chip, which is said to be optimized through 19 image algorithm hardening, reshaping chip structure and DLA chip accelerator, and V2 combined with software algorithms to improve the effect of the polar night scene.

In addition to self-developed chips, domestic mobile phone manufacturers have also spared no effort in ecology.

For example, OPPO invested in the construction of cross-terminal ecosystem and released Pantanal, a self-developed intelligent cross-terminal system, in August this year, which serves as the software base for OPPO to realize the integration of everything, further expanding the intelligent cross-terminal capability of ColorOS as an operating system.

It is understood that Pantanal system through the end-to-end cloud collaborative fusion computing and ubiquitous service two core capabilities to break the limitations between devices and systems and really connect different devices. At the same time, with the powerful multi-device fusion perceptual computing, we can more accurately judge and understand human needs, so that the service can reach users in a natural way at the right time and place and through the right equipment. to achieve a new experience of unbounded equipment and direct service.

The "razor project" launched by Xiaomi with MIUI 14 is intended to create an ultra-pure system with the smallest firmware, the least memory consumption and the least uninstallable applications. At the same time, MIUI 14 also uses a new photonic engine to "operate" on the underlying kernel of Android, opening up system capabilities to third-party applications to create a full-link smooth experience. In addition, MIUI 14 has achieved a multi-capacity breakthrough by upgrading the two interconnection centers of Xiaomi Miaoxiang and Mijia App.

From the author's point of view, self-research chip and power ecology are certainly valuable, but when almost all domestic manufacturers take this as a differentiated competitive advantage, whether it will become a new round of "homogenization" competition is open to question. More importantly, whether the market can pay for this remains to be tested in the future.

Nevertheless, to some extent, this mode of competition does enhance the differentiated competitiveness of domestic mobile phone manufacturers. More importantly, this competition makes the transition between manufacturers from the simple short-term product competition to the core long-term underlying technology competition, which will be beneficial to the overall competitiveness of China's smartphone industry in the long run.

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