Where is the opportunity for low-end mobile phones that Ren Zhengfei is obsessed with?

　　As usual, on the first day of work in 2018, the bosses of companies will give a New Year's speech to encourage their employees. The ways of speaking vary, some look forward to the New Year, some imagine the future, some don't say much and just give out red envelopes, and some even say that Gree's sister Dong will provide 80,000 employees with two bedrooms and one living room... True or false, the lively and lively speeches have aroused a lot of discussion. Let's follow the mobile phone portable editor to learn about the relevant content.

Ren Zhengfei , 　　the low-key and pragmatic Huawei CEO , also made his debut in 2018. On January 2, the first document in the 2018 Huawei President's Office email was signed, entitled " Ren Zhengfei 's speech at the Huawei Consumer Business Report and Core Staff Symposium". In this nearly 5,000-word speech, Ren Zhengfei talked about the past and the present, reviewed the tragic experience of Huawei's early terminal business, affirmed the remarkable achievements of the terminal business in recent years, and put forward "six musts" for Huawei's terminal development:

　　First, we must correctly judge future market trends; second, we must deeply understand customer needs, taking into account both high-end and low-end devices; third, we must build an independent Honor brand; fourth, we must provide differentiated cloud services; fifth, we must strengthen control over the terminal supply chain; and sixth, we must establish a broad talent base.

Where is the opportunity for low-end mobile phones that Ren Zhengfei is obsessed with?

　　As the big brother of Chinese mobile phone brands for many years, Huawei's strategic deployment has a reference significance for many enterprises. Today, let's talk about Huawei's low-end mobile phones, which Ren Zhengfei has repeatedly emphasized in recent years, and take a closer look at where the opportunities for low-end mobile phones in China will be.

　　Ren Zhengfei redefines the value of low-end phones

　　Today, Huawei's high-end mobile phone brand has achieved a pivotal position in the global market. Why is Ren Zhengfei still thinking about low-end phones? In this regard, Ren Zhengfei replied in October last year: "More than 90% of the world's population is poor. Low-end mobile phones from our competitors have a market among the poor. Don't underestimate them. Huawei also wants to make low-end phones, and our old products may be used to make low-end phones." To sum up, there are three reasons: first, the consumer market base is large; second, low-end phones can make money by selling at low prices and in large quantities; third, the basic support of product technology.

Where is the opportunity for low-end mobile phones that Ren Zhengfei is obsessed with?

　　In his 2018 New Year speech, Ren Zhengfei further defined the dividing line between poor people's phones and low-end phones. He bluntly said that poor people's phones are not low-end phones. The difference between high-end and low-end phones lies in commercial value, not in the users. Poor people can use high-end phones, and rich people can use low-end phones. In Ren Zhengfei's theory, mobile phones are just a tool for providing services. As long as they can meet the needs of consumers, whether they are high-end or low-end phones, they are all commercially valuable phones and are what Huawei wants to make.

　　Ren Zhengfei gave an example. In the eyes of most people, Africa is a backward place with a harsh environment and underdeveloped economy. African brothers still use 2G/3G mobile phones and live a "hard life". So are their mobile phones poor phones? No, some African brothers earn three times as much as those in Guangzhou! The performance of their 2G/3G mobile phones is not worse than similar models at that time! The reason why they cannot use high-end models is that the local network environment is poor, and even if they can afford it, they may not be able to experience it normally. Therefore, the sales volume of Huawei terminals exported to Africa is far less than that of Guangzhou, a city in China.

　　But the "stubborn" Huawei has not given up these difficult and war-torn areas. Ren Zhengfei said in his speech: "If we continue to withdraw from difficult and war-torn areas... retreat to only the Chinese market, and then retreat to developed cities such as Beijing, Shanghai, Guangzhou and Shenzhen, we will eventually be easily eliminated by others like ants."

　　In the eyes of many industry insiders, this is a big chess game played by Ren Zhengfei. First, low-end phones are sold at low prices and high volumes, and the profits earned can protect the continued investment in high-end phones; second, it is to establish a brand, circle users into the Huawei camp, and wait for the arrival of the "phone replacement wave" in the third world; third, it complies with the national government's "Belt and Road" strategy and conforms to the image of a strong country.

　　"Generals can emerge from difficult areas, and leaders can emerge from low-end products." Ren Zhengfei still has full confidence in the African market and low-end mobile phones. "I define the success of low-end phones as commercial success. Huawei's terminal business must always focus on commercial success and build a deep strategy and pricing system. High-end products must be strengthened, and low-end products cannot be ignored. Only by keeping pace with each other can we jointly open up a larger market space."

　　Current status of Huawei's low-end device layout

　　Huawei's terminal business, especially its mobile phone business, has a very clear positioning and can be divided into "three ends":

　　High-end - Ascend series, including D series (Huawei's highest-level mobile phones , D1 and D2 are the kings of the contemporary mobile phones. There are no new models now, replaced by the Mate series, focusing on business endurance), P series (focusing on fashion and photography, and there is also a relatively low-end Enjoy series), Nova series (light flagship, focusing on the female market);

　　Mid-range: Honor series (Internet mobile phone brand, flagship phone, and a relatively low-end Play series);

　　Low-end - includes the G series, Y series (entry-level and operator-customized models, including senior phones and 3G phones), and Maimang series (telecom customized models with exclusive logos).

Honor mobile phone

　　Compared with its own high-end models, the first advantage of Huawei's low-end G series and Y series is that they are cheap. A thousand-yuan mobile phone, entry-level, is affordable for the majority of consumers and is the first choice for conquering the city. Second, the designated cooperation with the three major operators, China Telecom, China Mobile, and China Unicom, is conducive to quickly seizing the market. Third, use high cost-effectiveness to increase exposure and cultivate the public's Huawei sentiment. Fourth, relying on the existing product foundation, the delivery cycle is shorter, the market layout is more flexible, and the production cost is lower. Fifth, the third world market with huge potential.

　　It can be said that as long as the hardware of the mobile phone is normal and the experience development of software applications is strengthened, the future of Huawei's low-end mobile phones is unlimited. We can also find some clues from Ren Zhengfei 's New Year's speech. He emphasized: "Low-end mobile phones must be of good quality, low cost, and maintenance-free during the life cycle. We must polish mature, high-quality mass-shipped products. Such products have been refined and run-in by tens of millions of units, with no failures, improved quality, and no technical risks. Then, through bulk procurement, the procurement cost can be reduced. This is the practice of low-end mobile phones."

　　Where are the opportunities for domestic low-end mobile phones?

　　1. Large user base, small profits but quick turnover. The new generation of domestic mobile phone manufacturers, led by Xiaomi, OPPO/vivo, highly pursue product cost-effectiveness. They have successfully opened up the market with low-end and mid-range mobile phones with high configurations and affordable prices, creating the current "Huami Ov" market structure.

　　A broad consumer base is the key to the success of "Mi, OPPO and Vivo". The so-called "small profits but quick turnover" means that when only one out of ten people on the street has a mate 10, and the other nine have redmi 5 or OPPO A series, the profit difference can be imagined. Perhaps this analogy is a bit exaggerated, but it is undeniable that mobile phone sales are originally made up of consumer demand.

　　Today, Huawei's re-emphasis on low-end phones is not only "repetitive" but also "important". It can be seen that domestic mobile phone manufacturers are paying more and more attention to the consumer market and user experience.

　　2. High cost-effectiveness accumulates word-of-mouth and cultivates user recognition. To make a difference in the low-end phone market, the first thing to do is to focus on configuration and price, that is, how to improve cost-effectiveness. The cost-effectiveness of low-end phones is relatively simple, because the products are relatively cheap, so the phones do not need too many gimmicks, too much black technology, or too many functions, but the hardware and system must be "tough" to meet the existing needs of customers.

　　As for the future needs of customers, there is no need to rush. Build up word of mouth to build a good brand, maintain continuous output of value, release models with different positioning, let users identify with the manufacturer's products and concepts, and sales will come naturally.

　　3. Online and offline sales channels are flexible and diverse. Nowadays, domestic mobile phone brands have different sales channels, but in summary, they are nothing more than: Huawei, Xiaomi and other brands mainly use online channels, supplemented by offline channels; OPPO/vivo mainly use offline channels, supplemented by online channels, and penetrate into third- and fourth-tier cities; old brands such as ZTE still cooperate with operators to customize models; Meizu, Gionee, Nubia, 360, Meitu and other brands mainly use online sales platforms; and finally, there are emotional products such as Hammer and Nut, which rely on annual press conferences to compete for a wave of market share...

　　For low-end mobile phones, since the product price is relatively low, the sales cost cannot be extravagant, and it is necessary to combine the product positioning with multiple sales channels. Cooperation with operators can quickly implant the market, online purchases can cater to the young new generation, offline stores can directly experience and attract users, and cooperation with low-cost online sales platforms are all good options.

　　Of course, there is also the after-sales service. It would be best if we could achieve what Ren Zhengfei hopes for, "no after-sales service during the life cycle." If this cannot be achieved for the time being, after-sales service cannot be ignored, and customers cannot have the impression that we are "making a fortune by selling low-end phones."

　　4. The third world export giant is ready. At present, including Huawei, Xiaomi, Lenovo, OPPO and other domestic brands have entered the new overseas markets in the third world regions such as India, Southeast Asia, Africa, Latin America, etc., and have achieved good results in both terminal equipment and communication facilities.

　　In the terminal mobile phone market, low-end phones are obviously more popular than high-end phones. Because high-end phones are expensive and have limited experience, the strategy of adopting a single high-end phone when entering the market is not the best solution. Instead, it is the best choice to first attract users to your camp through low-end phones, and then transition to high-end phones in waves of "phone replacement" through technological development and consumption upgrades.

　　Now that Ren Zhengfei has reiterated his old words, it is a foregone conclusion that Huawei will return to the low-end market. So with Huawei's current strength and status, will it become a "troublemaker" or a "disruptor" in the low-end market? It is worth waiting and seeing.

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