Smartphones usher in a knockout round in the second half: some compete in the supply chain, while others consider AI

　　10 years ago, Steve Jobs defined " smartphone " as different from feature phones. Today, 10 years later, the smartphone market has become a mature one, and many are considering full-screen and artificial intelligence. Let's learn more about the relevant content with the editor of Mobile Phone Portable.

　　In the past two months, perhaps influenced by the e-commerce festival, the domestic mobile phone market has presented a carnival of new phone releases and price cuts. In multiple press conferences for several consecutive days, full-screen new phones have reignited the market. In the past two months, we have seen many confrontations between mobile phone manufacturers to compete for the market. For example, there were press conferences held in groups. Honor, 360 mobile phones, OnePlus 5T, and Xiaomi's first IoT summit were all held on the same day, November 28. Later, 360 and Honor collided again yesterday (the former released the full-screen new N6 series starting at 999 yuan, and the latter directly discussed " The transformation and thinking in the first year of AI  mobile phones"). There was even an offline incident where Xiaomi employees smashed Huawei Honor stores. In this market, for rankings, sales, and brands, some people fight with blood, some people pursue technological innovation crazily, and some people gradually fall behind and become frustrated.

Smartphones usher in a knockout round in the second half: some compete in the supply chain, while others consider AI

　　According to the 2017Q3 Chinese smartphone market shipment statistics report released by market research firm Canalys, a total of 119 million smartphones were shipped in China in that quarter, of which Huawei shipped 22 million units, with a market share of 19%, ranking first; OPPO followed closely behind, with 21 million units accounting for 18% of the market share; vivo accounted for 17% of the market share with 20 million units; Xiaomi ranked fourth, and Apple rebounded strongly, ranking fifth, accounting for 13% and more than 10% respectively.

 Smartphones usher in a knockout round in the second half: some compete in the supply chain, while others consider AI

　　It can be seen that the market shares of the top three mobile phone manufacturers are very close, which also indirectly reflects the fierce competition in the current domestic mobile phone market.

　　On the other hand, according to the latest data from market research firm Kantar Worldpanel, by the end of October, the top five Chinese mobile phone manufacturers accounted for 91% of the entire market share, compared to 79% last year. This means that the leading advantage of the top five is further expanding.

　　Behind the fierce competition in the domestic mobile phone industry, leading manufacturers will continue to compete with each other for existing users, while the remaining small manufacturers in the second and third tiers will be caught in a helpless elimination game as the smartphone dividend fades.

　　Smartphone market is already a success

　　IDC's 2017 third quarter global smartphone research report shows that although smartphone shipments are still growing in the quarter, the growth rate is slower than in previous years. At the same time, according to a report released by the China Academy of Information and Communications Technology, from January to June this year, the domestic mobile phone market shipped 239 million units and launched 565 new models, down 5.9% and 26.0% year-on-year respectively.

　　This means that the slowdown in the growth of domestic mobile phone shipments is basically an indisputable fact. For the leading camp, in addition to maintaining the current user market, they also have to grab market share from other mobile phone manufacturers. Mobile phone manufacturers that have emerged in the era of mutual benefit networks are paying more and more attention to offline, and operator channels are the top priority of the offline market.

　　The key point is how to expand channels and business capabilities. With the decline of Samsung in the domestic market and the rise of domestic brands such as OV and Huawei, operators will gradually abandon Samsung and turn to domestic brands with better sales.

　　"In the big picture, in 2017, Huawei and OV's revenue capabilities far surpassed other brands. They have the best supply chain and channels among domestic brands, and the second-tier brands will not see a chance to turn around in the short term. Because of the concentration of resources, Huawei and OV's leading advantage will continue to increase," said Wang Yanhui, secretary-general of the China Mobile Alliance.

　　It can be basically determined that the leading domestic mobile phone manufacturers will also be divided into two major camps: one is the companies that can continue to drive a substantial increase in mobile phone shipments, and the other is the ODMs that expand into overseas markets.

　　According to research by Michael Walkley, an analyst at financial firm Canaccord Genuity, Apple's share of global mobile phone profits has dropped to 72% in the third quarter of this year. Although it is still in the lead, it is no longer in a dominant position.

　　In the future, competition among the first-tier companies will become more intense. They will either directly snatch food from their competitors or focus on new market layout.

　　It is difficult for emerging manufacturers to counterattack the market share

　　However, due to the crushing of the first-tier companies in many aspects such as technology development capabilities, supply chain, channels and ecology, it will be difficult for more small independent mobile phone manufacturers to make a comeback.

　　Moreover, due to the problem of homogeneity, the current smartphones are almost the same in appearance, workmanship, specifications and functions. For example, in terms of screen material, they are gradually moving towards OLED screens; all Qualcomm Snapdragon CPU processors, with 6GB RAM as standard; in terms of storage media, 16GB, 32GB, and 64GB are all configurable; dual cameras are used, giving up the simple pursuit of high pixels. At the same time, the rapid product iteration of various manufacturers has made the impact of performance on the value of smartphones increasingly weak. Even a thousand-yuan phone can meet user needs well. At present, the new technologies advertised by most manufacturers are at most functional upgrades, which are easily caught up by peers.

　　What's more, in terms of price, most manufacturers are still faced with the problem of selling products at low prices but not making any money in the short term, while it is difficult to open up the market and increase brand premium by entering the high-end market.

　　Li Kaixin, president of 360 Mobile, mentioned in an interview that "the current gross profit margin of making a mobile phone is very low, almost only a few dozen yuan."

　　In addition, in the smartphone industry, which is generally money-burning and difficult to make profits, small manufacturers without external resource support will be the first to face the risk of being eliminated. Coolpad, which was once ranked in the first echelon of domestic mobile phones in the "China Cool Alliance", has suffered layoffs, huge losses, and high-level turmoil after losing the big tree of LeTV. Recently, news of its acquisition was reported. A Coolpad employee said, "The entire Coolpad business is shrinking quite a lot now, and there are problems with the internal capital chain. It is quite difficult to turn around. People in various business lines are in turmoil..."

　　Competition in innovation: all are eyeing full screen and artificial intelligence

　　Since September this year, various full-screen mobile phones have been launched one after another, from Apple iPhone X, Samsung S8, Xiaomi MIX2, Gionee M7, vivo X20, to OPPO R11s, HTC U11+, Smartisan Nut Pro2, OnePlus 5T, 360 N6 series, Honor V10. Almost all mobile phone manufacturers have either launched new full-screen phones or are on the way to launch new phones.

　　Xiaomi's 1,000-yuan full-screen smartphone Redmi 5/5 Plus

　　According to the forecast of consulting agency CINNO, the penetration rate of full-screen mobile phones in the smartphone market was 6% in 2017, which will soar to 50% in 2018 and gradually rise to 93% in 2021. Judging from the probability of full-screen phones appearing in new phones in November, the penetration rate of full-screen mobile phones in 2018 will only be higher than 50%.

　　However, in terms of the implementation of full screen as a functional configuration, full screen is currently only available in mobile phones with ultra-high screen-to-body ratio, and has not yet achieved 100% screen-to-body ratio on the front of the phone, which has also caused uneven quality of new phones. For example, iPhoneX, due to the need to carry a series of mobile phone sensors, adopts a special-shaped full screen to better adapt to the body design and overall structure, but the resulting "bangs" design greatly affects the visual experience of users when watching videos, playing games or browsing the web.

　　According to current observations, since the full screen has changed the industrial design of mobile phone products, all aspects such as product structure, camera position, earpiece position, new fingerprint chip design, etc. have become technical thresholds that all manufacturers will face in the future.

　　Looking at artificial intelligence, in recent years, after competing in performance and piling up parameters to "run a score if you don't agree", the mobile phone market has finally ushered in some changes due to artificial intelligence technology. From face recognition to voice assistants, functional applications are accelerating their popularization. We can get a glimpse of this from the new phones of Apple, Samsung, and Huawei. Among them, Huawei has successively launched the "first artificial intelligence mobile phone" Honor Magic and the Honor V10 equipped with the "first artificial intelligence processor chip" Kirin 970. Obviously, for the entire smartphone market, AI technology that enables mobile phones to self-learn based on user behavior habits, and then optimize, intelligently perceive user scenarios, predict user behavior, and then intelligently allocate resources to ensure the best operation of the system  has  become the next outlet.

　　Friends and Foes in Smartphone Ecosystem Construction

　　From Internet giants such as Apple, Google, Amazon, BAT, to device manufacturers such as Huawei and Xiaomi, their actions have told us that "we should make more friends and fewer enemies." From "Mobile First" to the current " AI First", almost all manufacturers are consciously building an ecosystem. From hardware, software to services, all will be based on cloud computing to build a "everything connected" system.

　　For example, Apple launched the Home Kit platform based on the user stickiness and usage habits established on the iOS operating system, and joined forces with Philips, Honeywell and Haier to enter the smart home market; Google released the Android Things Internet of Things operating system to enable developers to connect their products to cloud services.

　　This is why Xiaomi started to develop IoT three years ago and has now chosen to cooperate with Baidu. The goal is to use Xiaomi's IoT ecosystem + Baidu's AI technology capabilities to achieve rapid integration and linkage of IoT products on the cloud platform.

　　As Lei Jun envisioned, Xiaomi is not just a mobile phone company. From the initial mobile phone to TV, router, TV box, and then to smart home, smart speakers, wearable devices and other hardware products, Xiaomi's IoT ecosystem of "connecting all smart devices with mobile phones as the center" seems to be a replicable path. In 2016, it was reported that the revenue of Xiaomi's ecological chain companies had exceeded 15 billion yuan.

　　Although in addition to Xiaomi, more mobile phone manufacturers have begun to try, at the Honor event on December 12, Zhao Ming mentioned more than once the "ecological construction" of "with friends, there is a future": "All Internet companies and all mobile phone brands must have an open mind and contribute their capabilities."

　　However, it is still a big challenge to effectively link its own or third-party businesses based on the relatively mature mobile phone business module.

　　In the minds of smartphone manufacturers, there is not only the current mobile phone market, but also the opportunities brought by future changes. The mobile phone market is destined to be a battlefield for the top echelons to fight, based on mobile terminals as traffic entrances and building the entire ecological chain. This also means that whether it is artificial intelligence, AR, or new technologies such as the Internet of Things and blockchain, only a few players with resources can afford to play, and what about the many small and medium-sized players under the survival of the giants? They flocked to the market when they entered, and they will inevitably "die" together when they leave.

    The above is an introduction to the portable mobile phones - the second half of the smartphone market is about to enter the knockout stage: some compete with the supply chain, while others are eyeing AI. If you want to know more relevant information, please pay more attention to eeworld. eeworld Electronic Engineering will provide you with more complete, detailed and updated information.