Is OPPO really in danger?

　　Since last year, OPPO's sales and market position have grown by leaps and bounds, bringing it into the spotlight of the media. Many media (self-media), including me, have done some analysis on the reasons behind OPPO 's comeback, hoping to decode OPPO 's success to a certain extent . Let's follow the mobile phone portable editor to learn more about the relevant content.

　　In recent days, "China Economic e-Business Circle", a WeChat public account affiliated to the TMT section of China Business News, which focuses on technology, media and communication platforms, also released a masterpiece - "OPPO: A Crisis in an Age of Prosperity?" Once released, it caused a huge response in the technology circle and was reprinted by many platforms.

 Is OPPO really in danger?

　　I also read this masterpiece carefully, hoping to absorb nutrition from this kind of masterpiece. However, the more I read, the more I felt that some parts of this article seemed to be wrong, or not rigorous enough, which made me have many questions. Therefore, I will list the questions (doubts) I found when reading this masterpiece. If the author of "Zhongjing e-Business Circle" can give a reply to solve my doubts, I would be very grateful. Let's get straight to the point and directly raise a few questions I have.

　　Question 1: Why did OPPO fall to fourth place?

　　In the article "OPPO: A Danger in a Time of Prosperity?", the author said, "Now, despite its prosperity, OPPO is also facing many troubles. According to the report on global smartphone shipments in the first quarter of 2017 released by Xuri Big Data, Samsung ranked first with 80 million units shipped, while OPPO ranked fourth with 26 million units shipped."

 Is OPPO really in danger?

　　But what is curious is how the author concluded that OPPO has fallen to fourth place from this sales data.

　　As we can see, from last year till now, according to the OPPO smartphone global sales market rankings published by many well-known research institutions at home and abroad such as IDC, CounterPoint, Trend Force, IHS, and Sino, OPPO has always been ranked fourth in the global smartphone sales market share ranking, and has never been ranked third, second or first. In the first quarter of this year, data from many research institutions also showed that OPPO's global smartphone sales in the first quarter of 2017 were still ranked fourth. From these data, we can actually see that the current smartphone market share ranking is actually relatively stable.

　　So did the author's reference to the Sunrise Big Data put OPPO in third, second or first place when calculating OPPO's global market ranking in 2016? Unfortunately, judging from the ranking of the top 10 global smartphone manufacturers' shipments and market share in 2016, the Sunrise Big Data cited by the author is consistent with the data released by research institutions such as IDC and CounterPoint. The Sunrise data also shows that OPPO ranked fourth in global sales in 2016.

 Is OPPO really in danger?

　　So the question is, since OPPO ranked fourth in the global market in 2016, and in the first quarter of 2017, OPPO's global market share ranking is still fourth, then I would like to ask the author, how did he get the data for the so-called "OPPO fell to fourth place in global smartphone shipments in the first quarter of 2017"?

　　Question 2: Is it fair to compare the three-day online sales of OPPO R11 with the eighteen-day sales of other brands?

　　In the article "OPPO: A Dangerous Situation in a Prosperous Era?", the author said: OPPO seems to have miscalculated in terms of online sales. According to the data released by JD.com's "6.18", from June 1st to 18th, in the cumulative sales of mobile phones on JD.com, OPPO ranked only eighth, and the top five were occupied by Xiaomi, Honor, Apple, Huawei, 360 and other brands. In addition, in the TOP10 sales list of mobile phone brands on JD.com's "6.18" event, Redmi Note 4X, Honor Play 6X, and Honor Play 5 ranked in the top three, followed by iPhone7 Plus, Redmi 4A, iPhone7, Honor 8 Youth Edition, Honor v9, Xiaomi 6, and iPhone6S Plus, while OPPO R11, which claimed to have invited half of the entertainment industry to endorse it, was not on the list.

 Is OPPO really in danger?

　　Judging from the ranking, this is indeed a fact, but can we say that OPPO has made a wrong calculation based on this? It seems not. In this ranking, I think the most important thing the author should disclose or the most important thing that cannot be ignored is: when did OPPO R11 participate in JD.com's 618 event? Did it start on June 1st?

　　In fact, OPPO R11 participated in JD.com's 618 event on June 16. So from here we can easily find a core fact: OPPO R11 actually participated in JD.com's 618 event on June 16, and as we all know, JD.com's 618 ended on June 18, so in fact, OPPO R11 participated in JD.com's 618 event for three days. And as the author said in the article, the sales ranking time counted by JD.com is the cumulative sales from June 1 to 18. So is it really fair to compare OPPO's three-day sales, which is not in a strong position in the online market, with other brands' 18-day sales? Can we conclude that the online market is under pressure? It seems that it is not.

　　In fact, compared with the past, although the online performance of OPPO R11 is somewhat behind other brands that have traditionally cultivated the online market, it has made great progress compared with itself. According to the data released by OPPO, on the first day of sales on June 16, OPPO R11 won the first place in mobile phone sales and sales on JD.com's 618 (that day) within 5 minutes of online sales. 40 minutes later, the online sales exceeded the sales data of R9s for the whole day. So from this perspective, isn't this an improvement and breakthrough for OPPO in the online market?

　　Question 3: Is the return of OPPO’s growth rate to normal a turning point?

　　In the article "OPPO: A Dangerous Situation in a Prosperous Era?", the author mentioned: In fact, after more than a year of crazy growth, the decline in OPPO's overall sales has already appeared in the fourth quarter of 2016. Two years ago, OPPO's shipments were basically not affected by the quarterly cycle, while Huawei has always been subject to the industry's quarterly cycle. However, since the fourth quarter of 2016, OPPO has entered a normal quarterly sales fluctuation. The growth rate dropped from 116.6% in the fourth quarter of 2016 to 29.8% in the first quarter of 2017.

 Is OPPO really in danger?

　　From the data, OPPO's growth rate in the first quarter of 2017 did decline compared to the first quarter of 2016. Although its growth rate is still the highest, it did not achieve the crazy growth rate of over 100% in each quarter of 2016. But can we conclude that "OPPO's overall sales have reached a turning point"? Personally, I don't think such a conclusion can be drawn.

 Is OPPO really in danger?

　　It is a well-known fact that the crazy growth rate achieved by OPPO in 2016 was actually based on its relatively small sales base in 2015. With the rapid growth of its sales in 2016, the sales base of a single quarter will inevitably expand. Under the reality of the expansion of the base, it is impossible to require OPPO to achieve the same year-on-year growth rate as in 2016 every quarter. In other words, can you ask Samsung, Apple, and Huawei to continue to achieve a 50% year-on-year sales growth rate every quarter at their current size? Obviously not.

　　As the author said, OPPO has actually entered a normal quarterly sales fluctuation. After the base number has expanded, it has returned to the normal incremental range. Isn't this a good thing for OPPO? Wouldn't it be more conducive to the healthy development of OPPO if it falls back to a normal level? I would also like to ask the author: Does a 100% increase every month represent a healthy growth rate?

　　Question 4: Is OPPO’s 2 billion advertising expenses in 2016 high?

　　In the article "OPPO: A Crisis in an Age of Prosperity?", the author mentioned: Survey data show that OPPO's annual advertising expenses in 2016 were around 2 billion yuan.

　　If I understand correctly, the author's implication is that OPPO invested 2 billion yuan in advertising in 2016, which is a very high expense. It gives people the impression that OPPO can spend money on advertising, but is 2 billion really that much for OPPO? If we allocate this 2 billion yuan to each smartphone, combined with OPPO's sales of nearly 100 million smartphones last year, and do a simple arithmetic problem, we can conclude that the advertising cost of this 2 billion yuan allocated to each smartphone is actually only around 20 yuan.

　　So is this cost really high? It is not difficult to draw this conclusion. I suggest that the author compare the marketing costs of other companies to see how big the gap is. This may be better. I wonder if the author has relevant data.

　　One data I can find is that Apple's marketing expenses in 2015 were US$1.8 billion (calculated at the rate at the time, about RMB 11.68 billion). According to relevant statistics, Apple sold 227 million smartphones in 2015. If we add in its sales of 49.4 million iPads and around 20 million Macs, that number will also increase.

　　So here we can roughly calculate the marketing expenses that Apple spends on each product. And if we compare this expense with the 2 billion RMB that OPPO spent in 2016, we can actually draw a conclusion that the marketing expenses that OPPO spends on each product are not high on average.

　　Of course, when it comes to marketing, we have to say a few more words. Due to OPPO's remarkable achievements in entertainment marketing, it tends to be stigmatized on the Internet. People say that OPPO is marketing-driven and spends all its money on advertising.

　　But in fact, this may not be the case. One fact that cannot be ignored is that OPPO has always been a major patent applicant. Data shows that since 2009, OPPO has begun to accumulate its own patents and strengthen its investment and exploration in cutting-edge technologies. Especially after 2012, OPPO's patent applications have increased significantly.

 Is OPPO really in danger?

　　In the data report on the ranking of domestic enterprises' invention patent applications accepted in 2016 released by the State Intellectual Property Office, we can also see that OPPO ranked fifth among all domestic enterprises with 3,778 invention patent applications accepted. This is also the second consecutive year that OPPO has ranked in the top ten in this list (in 2015, OPPO ranked fourth with 3,338 applications).

 Is OPPO really in danger?

　　Question 5: OPPO's profits only account for 1.5% of the total operating profits of the global smartphone market. How unsatisfactory is that?

　　Of course, in the article "OPPO: A Crisis in an Age of Prosperity?" by China Business Network, after talking about OPPO's marketing investment, we also talked about OPPO's profitability.

　　The original text says: Despite the huge marketing investment, OPPO's apparent prosperity is far from as good as its sales performance. According to data released by market research company Strategy Analytics, the total operating profit of the global smartphone market in 2016 was US$53.7 billion. Apple alone accounted for 79.2% of the operating profit; Samsung ranked second with 14.6%, while the three Chinese giants Huawei, OPPO, and vivo ranked third, fourth, and fifth, although their sales have been very impressive, their sales profits are not high. The total profit of domestic mobile phone manufacturers is very low, accounting for less than 5%. Among them, OPPO, which has been criticized for its "high price and low configuration" and poor cost performance, only accounts for 1.5% of the total operating profit of the global smartphone market. Compared with Apple and Samsung, it can be said to be "small profits but quick turnover."

 Is OPPO really in danger?

　　Here, my question is: How unglamorous is it that OPPO accounts for 1.5% of the total operating profit of the global smartphone market?

　　Indeed, compared with the profits of Apple and Samsung, there is indeed a huge gap. But is it that OPPO's profit is only 1.5%, and are the profit margins of other domestic manufacturers on par with Apple and Samsung? Using their own spear to attack their shield, we can also see that the Strategy Analytics report data cited by the author of this article also shows that in 2016, the total profit of domestic mobile phone manufacturers was very low, accounting for less than 5% of the total.

　　So in this reality, how did the author come to the conclusion that OPPO's 1.5% global profit margin is far less impressive than its sales volume? At least one reality is that OPPO is making money, while many domestic manufacturers are losing money. In fact, OPPO's 1.5% global profit margin is likely to be the highest profit level among all domestic manufacturers. The so-called small profits but quick turnover, ask all mainstream domestic manufacturers, who is not pursuing the strategy of small profits but quick turnover?

　　At that time, compared with Apple and Samsung, domestically produced products had low profits, which was indeed an embarrassment for domestically produced products. However, it is unfair to blame all this embarrassment on OPPO, which makes people mistakenly think that this is a situation that only OPPO has. Don’t you see that I also said in the quoted report: Compared with Apple and Samsung, all domestically produced products put together are no match. Of course, from another perspective, this is also an honor for OPPO, as it can finally represent domestically produced mobile phones to fight against Apple and Samsung.

　　In conclusion:

　　I am not writing this article to pick a fight with the author of this article, but after reading this article, I have been confused. In view of the fact that this article has been widely circulated, in order to maintain the rigor of science and technology reviews and the authority of China Business News, I still dare to speak out some of the confusions I encountered in this article. I hope that the author of this article or the TMT section of China Business News can give a reasonable explanation to help me solve these doubts I encountered in this article. As the saying goes, confusion is not clear until it is solved, so I would like to thank you in advance!

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