Domestic Mobile Phone Demand Enters Bottleneck, Terminal Manufacturers Seek To Break Through

The decline of domestic mobile phone market demand in the second quarter has more or less affected the terminal and supply chain manufacturers' research and preparation for the future market.

Although 618 e-commerce has been greatly promoted, according to the statistics of the China Academy of communications and communications, under the background that the new crown pneumonia epidemic affected the whole first quarter of mobile phone shipment in the same period of last year, and even the sales in some months were almost stagnant, the mobile phone market in the first half of this year has returned to the normal rhythm, and the shipment volume only increased by 13.7% compared with last year.

The reason lies in the fact that it is difficult to find new incremental space in the domestic market. Since 2016, the domestic mobile phone market has entered a bottleneck period for many years, and the overall market is in the downward range. Nowadays, 5g mobile phones have become the main force in the current shipment, but the price of 5g mobile phones is still slightly higher. From the experience point of view, 5g mobile phones and 4G mobile phones have not brought about significant difference in experience. To some extent, it seems that this has not changed the increasingly extended replacement cycle.

In this context, mobile phone manufacturers urgently need to use more abundant product matrix and marketing methods to promote the market carrying enthusiasm. It is expected that between the second half of this year and next year, more manufacturers will gradually launch smart phones and folding screen mobile phones equipped with under screen cameras. At that time, it may improve the current situation that the market believes that innovation is weak in stages.

Looking at the second half of the year, with the return of new glory, the market pattern will still face many variables.

A market with declining demand

At present, the market entry of 5g mobile phones does not seem to bring significant changes to the status quo of the replacement cycle of more than 20 months.

An insider of a mobile phone manufacturer told the 21st century economic report that at the peak of 2016, the domestic mobile phone market shipped about 500 million units. Since then, the market has maintained about 300 million units. At present, it is still difficult to return to the peak period in the short term. After all, the increase requires more increment. However, it is obvious that China has entered the stock market for a long time, and the variables in the second half of the year are also large, and some manufacturers do not particularly look forward to the second half of the year.

In view of this consideration, he pointed out that this to a certain extent was the reason why many manufacturers were doing "enlarged bidding" measures such as price adjustment during 618.

"The overall situation is not particularly optimistic, so the pressure is on the industry as a whole." The person admitted that, among them, if the head company wants to achieve growth, it needs to find more incremental space, and its pressure will be relatively greater. Other small and medium-sized manufacturers other than top5 are still in the development stage of absorbing more rising space.

Counterpoint analyst Zhang Qi also told reporters: "we believe that the replacement cycle of smart phones itself plays a more dominant role in the shipment volume. At present, 5g charges of the three major domestic operators are still high, and the minimum consumption is about $20. To some extent, this has divided the consumer groups. "

From this point of view, the demand for 5g consumer power has been met in last year's Q4 Apple iPhone 12 replacement wave and this year's 618 replacement wave, he added. In particular, in the current domestic market, 5g mobile phones account for an absolute proportion in the newly shipped mobile phones, making 5g functions no longer have the "premium" attribute.

"We will find a way to make consumers feel the value of 5g replacement from the aspects of products and richer ecology." Insiders of the mobile phone manufacturers said that there are indeed people who are not willing to change their phones at present, thus prolonging the replacement cycle“ Judging from the trend, mobile phones will eventually change, and the market may gradually get better. The industry needs to work together to impress consumers through products and ecology. "

This is why the rapid replenishment of overseas markets is equally important. Among the three domestic brands, Xiaomi, oppo and vivo, the proportion of overseas business is increasing. Compared with the other two major brands, Xiaomi, which has set sail earlier, will obviously benefit from the growth brought by its overseas deployment in the current competition process.

In addition, the price of 5g mobile phones does not seem to have entered a large-scale "people-friendly" stage.

According to the current mainstream manufacturers' definition of walking price, 3000 yuan is an important price distribution range. Before that, the mainstream sales price of offline market was more around 2000 +.

From a single brand example, vivo positioning "hot" s series and online potential sub brand Aiku series, have a relatively rich layout in this price segment.

Although realme has been released for more than 1000 yuan, it also hopes to maintain the market space of 3000 + yuan. The recently released zhenwo GT master series is also in this price range.

Xu Qi, vice president of realme and President of China, stressed to reporters including the 21st century economic report that quality price ratio is the key direction of realme. He pointed out that realme officials never mention "cost performance" because they do not want consumers to think that the brand is only competing through price, but also want to pay attention to the advantages of the brand in terms of design and performance.

"3000 + yuan is a price point for all domestic brands, including zhenwo, Hongmi, Rongrong, Aiku and other brands with internet characteristics. Nevertheless, due to market demand, shipping pressure and other considerations, brands will continue to launch 2K, 1K price point products. " Lin Keyu, a senior analyst at counterpoint, said.

However, he told reporters that the current mainstream consumer groups of 5g mobile phones do not have a strong demand for 5g 1000 yuan mobile phones, so the popularization cycle of 5g mobile phones to 1000 yuan mobile phones will certainly be prolonged, which is not directly related to the shortage of components.

The second half of the year is not small

The demand for machine replacement is not particularly strong, leading to a certain amount of cutting orders at the end of the supply chain in the first half of the year, which also affects the expectations of the future market among the industrial chains.

For this reason, Lin Keyu analyzed to reporters that most of this was because the upstream supply chain and terminal manufacturers had been too optimistic about the market demand and predicted too radical“ We expect that the Chinese market's shipment volume in the second half of this year will be the same as that of the same period last year. "

The variables that may stir up the overall market pattern in the second half of the year are not only the uncertainty of demand, but also the further admission of new glory to a certain extent.

Zhang Qi pointed out that in the dynamic changes of the market, other mobile phone manufacturers have made up for the supply gap left by Huawei by releasing new models and optimizing the deployment of price segments. At the same time, it is hard to deny that some consumers still love and approve Huawei series products“ Therefore, the return of glory will change the overall competition pattern, and the competition in the second half of the year will be more intense. "

"I never use the current market environment as too many excuses." Xu Qi responded that realme's overall market share in China is less than 5%, so external changes have little impact on the company. It is more important for the team to consider internal factors“ There will be a lot of new products in the second half of the year. This situation is very good, and the choice is more diversified. Realme will stick to the trend of fashion and quality price ratio. We welcome all kinds of flowers to bloom. "

From the current performance point of view, many manufacturers are taking a richer product matrix, as well as more active marketing methods to promote the further popularization of 5g products. For example, realme, which has entered the domestic market for a short time, has been updating its market activity with the rhythm of new products every month this year.

Xu Qi said that during this year's 618 promotion period, the company has achieved its small goal of entering the top three of the industry in mainstream online platforms“ This year realme has set a goal of breaking through 10 million yuan in the Chinese market. I think that the brand of realme is growing. Now, the magnitude of realme in the Chinese market in the second half of the year should be higher than that in the first half of the year. There is no big problem in achieving the goal of the whole year. "

On the whole, due to the demand of 5g mobile phones for larger volume of components and the impact of market problems such as long-term and short-term materials, the rising cost of 5g mobile phones has been an inevitable problem since last year, which may affect the people-friendly degree of 5g mobile phones to a certain extent.

Referring to this, the mobile phone manufacturers are used to it“ The cost rise has occurred since last year, after all, the supply chain has been rising. As for whether the price will be adjusted, it will depend on the strategy of different brands combining inventory and positioning. "

According to the data provided by counterpoint research market monitoring service to the 21st century economic report, in the first quarter of 2021, 37.56% of the global sales of 5g smart phones came from products with a price range of $200-399, and only 5.04% of products with a price less than $200, The second highest price segment is over $800.

At present, China is one of the core sales countries of 5g mobile phones in the world, which largely represents the sales trend of 5g mobile phones in domestic and European and American mainstream markets.

However, Lin Keyu pointed out to reporters that domestic top brand manufacturers will increase the price of new products to a certain extent from the second half of this year to next year. Of course, relatively speaking, there will be no "price increase with the same allocation". At the same time, each manufacturer implements the strategy of product combination, so the behavior of price increase will not appear in all product lines“ The shortage of components does have an impact, but for the head manufacturers, part of the pressure on parts supply has actually eased a lot than at the end of the year. "