Small And Medium Sized Mobile Phone Manufacturers Hope To Survive In 5G

Before the formal launch of the 5G large-scale switch node, some small and medium-sized mobile phone manufacturers were happy and worried.

In the past two years, the Meizu, a medium-sized mobile phone manufacturer, has experienced a gradual decline of executives. Hammer technology has been struggling recently, hoping to continue to release new machines, but there is no Luo Yonghao.

On the contrary, some small and medium sized mobile phone manufacturers who gained momentum from overseas earlier this year have increased their voice in the Chinese market and got the opposite trend.

But the Chinese market has been very difficult. Statistics from Canalys analysis show that in the second quarter of this year, the market share of the 6-10 mobile phone manufacturers in the Chinese market was only about 4%, and the share of more than ten manufacturers outside the top ten was about 4%, with the rest from the top five mobile phone manufacturers.

5G is an important opportunity for small and medium-sized manufacturers to see, one of which comes from operators. In the process of large-scale communication infrastructure transformation, the role of operators is not only the laying of base stations, but also the support for terminals. Some of the smaller share manufacturers in China are already equipped with deep operating experience with overseas operators, including ZTE, Lenovo and other technology giants.

Liu Zuohu, a mobile phone CEO and founder, told the twenty-first Century economic news reporter that the second half of 2020 will be a great development period for 5G, and China will probably be one of the fastest growing countries. "We must go all out to do well in this product."

The surge ahead of 5G

Small and medium sized mobile phone manufacturers with 5G R & D capability are rapidly catching up with the layout of 5G in the major markets, and the hottest ones are the two largest markets: China and Europe.

ZTE, Lenovo, and other veteran manufacturers do not need to say that some brands that are not very long years are also very active, hoping to become the first batch of players who benefit from the replacement.

Recently, more than a year's mobile phone brand realme has released its first flagship model with a price range of around 2500-3000 yuan, and announced its official entry into the European market.

"We won't be surprised at the layout of the 5G market," said Xu Qi, head of Realme global marketing, to the twenty-first Century economic news reporter. "As a mobile phone manufacturer with certain pursuits, Europe is a must do area and a high potential environment."

He further said that the popularity and education of 5G in the Chinese market were very "powerful", and the major mobile phone manufacturers and operators were actively deploying 5G. "Next year, realme will surely become the first batch of manufacturers to have high pass integrated 5G chips. 5G wave is a very good opportunity for realme to enable more people to see and choose realme. In the second half of next year, realme will take the lead in the world, mainly in China and Europe, and launch our 5G products.

One plus mobile phone has been the first 5G mobile phone manufacturer in the UK, and has worked with local operator EE. According to Liu Zuohu, part of the Canadian 5G mobile phone has been provided to dozens of fans in China. "At home, we are also working closely with the three operators, and we will introduce a more complete 5G mobile phone at the most appropriate time."

From the public statement of Dachang, we can understand the importance of 5G input. At the end of last year, OPPO CEO Chen Mingyong said publicly that it would invest tens of billions of yuan in research and development. One important category is 5G; vivo has launched 2 5G mobile phones.

Small factories are no exception. Liu Zuohu told reporters on the twenty-first Century economic report that at the end of 2016, a 5G laboratory was set up, and now there are 2 in Greater China and 1 5G laboratories in India.

"Do you know how much it costs to build a 5G laboratory?" He continued that only one laboratory needed 100 million yuan for laboratory hardware input. "In the next three years, we plan to invest 1 billion in India to build the largest R & D center in the world."

Although Realme has no official involvement in 5G's overall input, Xu pointed out that in terms of 5G R & D personnel, the company has invested more than 400 manpower. "At this stage, it is the power of the company to prepare 5G products, and realme wants to become the role of 5G pervasive."

Of course, in the face of the arrival of 5G, mobile phone manufacturers of all kinds have been making great efforts. Small and medium-sized manufacturers are not so easily able to make great breakthroughs in the tide of replacement.

Canalys analyst Jia Mo told the twenty-first Century economic report reporter that in the 4G era, because Lenovo and cool school did not follow the market pace in time, they only dropped off the team in the formal transformation. But in the 5G era, the head manufacturers are very aggressive. It is difficult to realize the overtaking of corners like the 4G era, leaving less opportunities for ZTE and Lenovo manufacturers.

However, he pointed out that operators need to be concerned about this variable. At the early stage of 5G, there will be subtle changes in the global market, including the Chinese market. Operators are more likely to provide subsidies. It will be the opportunity for small businesses to win the regional procurement orders of operators. This will be the order of several million units. Because of the high bargaining power of operators, it is a closed channel, and can actually feed some small manufacturers who have received orders, so that they can compete with similar manufacturers in the channel.

According to Canalys statistics, although China is a completely free competition market, the channel share of operators is not small. In the first half of 2019, operators accounted for 22% of the total market shipments, with an overall volume of 40 million units. "In the process of 5G conversion, the proportion of operators will continue to grow." Jia Mo pointed out.

Strategies for small and medium sized manufacturers

Unlike 4G, which is already very mature, manufacturers' foresight in 5G technology and capital reserves, product rhythm control and so on will undoubtedly affect the market share in the future, especially for small and medium-sized manufacturers, the cost of trial and error will be higher.

Liu Zuohu told the twenty-first Century business news reporter that China currently accounts for 30% of the total mobile phone in the global market. In view of the different 5G processes in different countries, it may also have a slight impact on the share of the company's future share in the world, but this is short-term. The test for a plus may lie in the product planning level.

"We also have our own solutions and will make better products. The global market share change is not a big problem. By 2021, 5G will definitely be released. " He added.

Liu Zuohu has repeatedly talked about the survival choices of small and medium-sized manufacturers in the current environment. "Living" is a high frequency vocabulary. In the past two years, the weakness of other small and medium sized enterprises has even disappeared. It also shows the importance of adhering to strategic positioning, making mistakes and adjusting in time.

One plus route is segmenting the "geeks" crowd market. Without considering the opening of stores under the line, the main online channels, and recently began to cooperate with offline stores and offline operators online platform, is still a lighter way.

"The competition in the domestic market is really fierce, but I feel more intense because of marketing competition." Liu Zuohu said, in fact, not a plus how strong, the company did not change much with the strategy 6 years ago. "For example, everyone is quarrelling in a room, and I hide in a corner and stand up. After a few days, many people are injured, and I am still standing. This is a very figurative metaphor."

Therefore, although the replacement cycle of China's mobile phone market continues to elongate and the total demand continues to decline, in addition to the rapid growth of HUAWEI in the top ten manufacturers, there are also small and medium-sized manufacturers in contrarian growth.

Canalys provided data for twenty-first Century economic report reporters. In the first two quarters of this year, realme, Yi Jia and Lenovo three of the small and medium-sized manufacturers showed outstanding performance.

Among them, realme returned to the Chinese market in the two quarter of this year. It achieved 550 thousand shipments from scratch, ranked eighth in the single quarter, and increased from 220 thousand shipments last year to 390 thousand shipments this year, up to 78%. Lenovo experienced a strategic adjustment last year, so it did not perform well last year, and this year also stabilized to a single quarter shipments of 400 thousand -50 million units.

Jia Mo analysis, because realme CEO had accumulated a long experience in overseas operations in OPPO, and can not regard realme as a completely new brand, and with the strategy of public channel, it is not difficult to understand that the manufacturer has returned to China for the first time.

Realme officials also point out that sharing supply chains and production with OPPO is similar to standing on the shoulders of giants, but they are independent brands.

As a result, the first flagship model released this time has broken the positioning of the realme price which has been released for 1000-1500 yuan in the past. "The price segment of realme is not an attempt, but a necessary process. I am very worried that because of the products released before realme, at a relatively low price segment, we will label realme as a low price product phone, and we will continue to attract more users."

Xu pointed out that although in the era of 5G, Japan and South Korea are relatively active markets and belong to the high potential full competition market, realme has not considered this layout at present, and has been preparing for the layout of new countries in recent two months, such as Australia.

"The domestic market is still our strategic focus, but this market needs us to operate more meticulous and think about how products are operated. We are still forecasting the Chinese market, and we will make more accurate predictions over time. He said.

The trend of Meizu will be released soon in the near future. Under the company's continuous strategy and executive adjustment, Meizu shipments data are not good looking.

Jia Mo analysis, Meizu is now going to get a share from other manufacturers will be more difficult, but the fans of the Meizu fans rely on the flyme OS system they have developed, maintaining some of the replacement needs.

"The situation facing Meizu is grim." He pointed out that there was no advantage of sharing the supply chain with the big factories, no such market support as similar Lenovo had overseas, and no accumulation of such strong communications technology as ZTE. "Overall, Meizu is second only to Samsung in the 6-10 place, but the problem is that shipments are falling from high places and there is no sign of decline. Therefore, even if the volume is large, there is still no obvious reversal of the trend."

At the 5G opportunity point, besides the rapid growth of the foregoing manufacturers, Jia Mo is optimistic about the follow-up efforts of ZTE and Lenovo. These two old communications factories are not short of technology and capital. With the good cooperation between domestic and overseas operators, they will be expected to launch more products in the future.

In particular, he pointed out that "it is foreseeable that there will be new demands in the 5G era. In the short term, both Chinese and Chinese manufacturers will be the main theme". He said that with the convergence power of various industry chain manufacturers, China will soon take the lead in the 5G market, and even China's 5G mobile phone market may be the sum of other markets. This is a good opportunity for all kinds of manufacturers to grasp the pace and strategy of development.