Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

On May 26, the happiest person in China’s technology circle was Lei Jun. On the one hand, he won the lawsuit against the United States and was removed from the sanctions list. On the other hand, there was a good news from Q1 in 2021, with a total revenue of 76.9 billion and a net profit of 6.1 billion. The best result in the history of Xiaomi! But Lei Jun, who has double happiness, is full of anxiety behind his smile – Xiaomi’s high-end dream still has variables!

On the morning of May 26, 2021, Lei Jun immediately forwarded the good news that Xiaomi was removed from the sanctions list by the United States, and then Lu Weibing, President of Xiaomi China, followed in seconds, accompanied by the copywriting “We won!” Legal weapons, won the lawsuit, it is no wonder that Xiaomi executives are so proud.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

Just when Xiaomi was jubilant, on the evening of May 26, the good news came again. Xiaomi’s first quarter financial report for 2021 was officially announced. The revenue and net profit growth hit a record high in a single quarter. Lei Jun could no longer restrain his inner excitement. With pride, he posted a number of Weibo “running to tell each other”, and once said he wanted to drink a cup of “celebration wine”.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

As a well-known technology company in China, Xiaomi has won the lawsuit in the United States and achieved the most beautiful single-quarter performance in history. It is indeed worthy of encouragement. Looking closely at Xiaomi’s first quarter financial report, we found that in addition to the record high revenue and net profit, there are also Two highlights:

One is Xiaomi’s core main business smartphone, with revenue of 51.5 billion yuan in Q1, a year-on-year increase of 69.8%, and a gross profit margin of 12.9%. The global shipment of Xiaomi mobile phones reached 49.4 million units, ranking third in the world. The speed is as high as 69.1%.

The other is the strong performance of the IoT equipment and consumer goods business, with a comprehensive revenue of 18.2 billion yuan, a year-on-year increase of 40.5%.

What does that mean? To put it simply, Lei Jun has sharpened his sword in ten years, and the core strategy of “mobile phone × AIoT” set for Xiaomi has achieved remarkable results, and the general direction of Xiaomi Group is on the right.

However, it is not possible to report good news but not bad news. Behind this beautiful quarterly report, you can still see the hidden worries behind Lei Jun’s smile:

As early as the beginning of 2020, Xiaomi launched a strategy to fully sprint into the high-end market, and packaged Redmi to Lu Weibing to focus on the sinking market, and the Xiaomi digital series and MIX series went all out to attack. The price of the main models also soared to 3000+, completely declaring the end of the 1999 era.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

However, according to Xiaomi’s 2020 financial report estimates, the Xiaomi Mi 10 series shipped a total of about 3.5 million units worldwide in the first ten months of 2020. This result is far from being a firm high-end. How many flagship machines can be considered a firm foothold? ? There are no clear standards in the industry, which does leave room for some companies to market.

However, we can judge by referring to the recognized high-end brands, Apple, Samsung and Huawei’s shipment scale. Apple’s single new product (iPhone series) has an annual sales volume of 60-80 million, and Samsung’s dual flagship (S series + Note series) new products The annual sales volume is also at the 60 million+ level, and the annual sales of Huawei’s dual flagship new products (P series + Mate series) are also at the 30 million to 40 million + level.

And the models of these three brands have the lowest average price of 5999+, and the highest is 10000+.

Therefore, when Lei Jun came up with the data of 3000+ price statistics, and the single-season volume of only 3 million units in the world (even if the next three seasons can reach this level, then the amount will be 12 million) and put it on the table, saying that the high-end stands firm. At the time, it was somewhat unconvincing. Of course, compared with Xiaomi itself, the progress is huge, basically at the 3K+ price, and it sold the amount of the past year in one quarter.

There are also objective factors that cannot be ignored when Xiaomi won the first sales of Android mobile phones in the price range of 4,000-6,000 yuan in China:

Huawei is sanctioned, there are no new phones to launch in the first quarter of 2021, and even the old flagships are seriously out of stock, Samsung’s domestic market is declining, OPPO and vivo are weak in the 5K+ price range, and the Mi 11 series has attractive configurations and limits Value for money. In addition, Xiaomi did not count the specific number of units shipped. So out of the 3 million units, how many models were sold in China with prices ranging from 4,000 to 6,000? became a mystery to be solved.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

Although we can’t accurately measure how many 4000-6000 price range phones Xiaomi sold, but through the data of some e-commerce platforms, we can still estimate the sales situation. According to the April 2021 “JD.com’s Self-operated Mobile Phone Sales Rankings”, we found that the only high-end models on the list are the iPhone and Huawei, which is seriously out of stock. Low-end thousand-yuan phones such as Redmi and Honor X10 are not considered as statistical objects. The Mate 40 Pro released last fall can still achieve sales of 100,000+, and Xiaomi’s new products 11/11 Pro/Ultra have not been on the list. Note that the Mate 40 Pro starts at 6499 yuan.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

Data: JD.com, Graphics: Xiaoyi MAX

The data of e-commerce platforms such as Huawei Mall, Tmall, and Suning will no longer be counted one by one. Basically, there is little difference with the performance of JD.com. Huawei’s old model opponent. This also seems to prove a point: Xiaomi has not yet obtained the real high-end voice.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell at a higher price than Huawei? Another scary thing is that when Huawei is out of stock, some people buy it at a higher price. However, the Xiaomi Mi 11 Pro/Ultra was forced to sell at a “price reduction” just a few months after its release. A certain platform dropped by as much as 600 yuan. The logic behind this is Lei Jun’s anxiety. deep-seated reasons!

02, the sword refers to the world’s first! Xiaomi why?

Although 3000+ has been calculated as a high-end machine range, this statistical caliber is doubtful (because in the domestic market, any mid-range machine that is new this year can be sold at a price of 3000+), and despite the lack of stamina of the Xiaomi Mi 11 series (especially the Pro and Ultra’s price reduction), but it does not prevent the ambitious Xiaomi from publicly proposing the big goal of winning the world’s first.

On May 24, 2021, at Xiaomi’s 2021 school enrollment centralized training meeting, Xiaomi China President Lu Weibing announced Xiaomi’s big goal with confidence: “In three to five years, the mobile phone business will become the world’s first! Now Xiaomi Ranked third in the world, there is a relatively high probability that it will surpass Apple to become the second in the world after the end of June.”

More than Apple, if it is purely in terms of shipments, it is not impossible. Apple conquers the world with one machine every year, and Xiaomi and Redmi launch at least dozens of models every year. Citing Xiaomi’s financial report, a total of 49.4 million units will be shipped in Q1 2021. Xiaomi, and we know that only 3 million units have been shipped for more than 3,000 yuan, which means that the remaining 46.4 million units are low-end machines below 3,000 yuan, which just proves the second set of data.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

The above table shows the global mobile phone profit distribution map in Q1 2021. It can be seen from it that the profit of the global mobile phone industry in the first quarter exceeded 100 million US dollars. Among them, Apple alone took away 42% of the share. fear? In second place is Samsung with 34.4% share, and Xiaomi comes in fifth with 13.3% share. Not counting Samsung and Apple, in China, Xiaomi’s profitability is also behind OPPO and vivo.

Therefore, the first inference can generally be drawn: Xiaomi is sacrificing profit for scale, and producing quantity for quantity.

It is precisely because of the limited profitability that Xiaomi’s R&D level is largely restricted. Let’s continue to look at the data. The “2020 EU Industrial R&D Investment Scoreboard” released by the European Commission in December 2020 is based on the statistics of global companies’ 2019 financial reports. Out of the 2,500 companies with the most R&D investment in the world, a total of 624 Chinese companies are included in the list:

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

Huawei ranks first in China and third in the world. In 2019, it invested 132.699 billion yuan in research and development. Combined with the 2020 financial report data released by Huawei on March 31, 2021, Huawei’s total research and development expenses in 2020 will be 141.893 billion yuan, more than It is the sum of the four major domestic technology giants in BATJ.

Xiaomi ranks 15th in China and 187th in the world. In 2019, it invested 7.047 billion yuan in research and development. According to Lei Jun at the Xiaomi Million Dollar Technology Award Ceremony on January 7, 2021, Xiaomi has invested a total of 100 100 million yuan in research and development, ranking in the top 20 Chinese companies.

Therefore, we can see that in terms of R&D investment, there is a gap of more than 130 billion between Xiaomi and Huawei.

Although Xiaomi’s R&D investment is not low, it does not have any advantages compared with real high-end mobile phone factories, which is destined to be severely limited in the output of smart results.

This is also the core reason that affects the premium ability of Xiaomi’s products – the lack of first-class self-developed core technologies.

Taking the technology accumulation at the core and SoC chip level as an example, first-class giants such as Huawei and Apple Samsung have the ability to develop their own SoCs, and Xiaomi’s latest breakthrough is only to show the self-developed ISP at the MIX Fold conference.

What’s the meaning? Just like Huawei can build a house, Xiaomi can only build a mirror in the house at present, ISP is far from the most difficult thing for SoC, CPU GPU baseband… any one can get stuck in Xiaomi’s neck, so Xiaomi can only “sit back and enjoy the success” “Spend money to buy it from Qualcomm.

The question is, Xiaomi can buy it, OPPO and vivo can also buy it, how can Xiaomi achieve the experience of hanging friends on the basis of the same computing platform? Who is weaker in R&D than Xiaomi? This determines that at the most core technical level, Xiaomi cannot open the gap with its friends.

On the software system, they are all deeply customized based on Android, and each has its own characteristics. It is impossible to talk about who is crushing who. The only variable is to sell it first and leave it to the end of the article.

On the other hand, the Xiaomi configuration is coming up, but the ID and CMF design of the mobile phone are still almost meaningless. Compared with other high-end models, there will be a slight difference in quality, which is what Xiaomi needs to continue to tackle.

To get through the high-end, there is also a core level, namely brand recognition (brand power). When it comes to high-end, everyone will think of Apple, Samsung and Huawei, but will not immediately think of Xiaomi. The breakthrough of users’ minds relies on hard-core scientific research. Supported by strength and comprehensive product experience. Therefore, R&D strength and brand influence are complementary to each other.

Even if we don’t talk about Huawei (after all, we have been forced to withdraw from the mobile phone market), in China, there are well-known national mobile phone brands such as OPPO and vivo. Moreover, the public has no obsession with cost performance of OV products, and OV is fully high-end. , it will also form a check and balance on Xiaomi.

There are no tigers (Huawei) and monkeys in the mountains to dominate!

Therefore, before the R&D and brand power are not enough to lead domestic friends and businessmen, let alone the rhetoric of the world’s number one? The road to surpassing Huawei is long, and Xiaomi still needs to work hard.

Postscript: The mobile phone world has changed dramatically!

In 2020, which has been heavily sanctioned, Huawei still won the first share in China, which is not easy. Xiaomi ranked fifth after Honor, and it was also a year ago when Ren Zhengfei “cut” Honor with tears. Huawei officially broke up, but it also took away the “fire” of hope.

Why can’t Xiaomi, which is full of materials, luxurious in configuration, and kindly priced, sell Huawei’s price?

Huawei’s spark, what is it? It is talent, and Honor has taken away 8,000 Huawei leaders. Among them, 4,000 are the core R&D personnel of the original Huawei mobile phone department. It is no exaggeration to say that Huawei, the current mobile phone company with the strongest R&D potential in China, is very likely to be the new glory.

(Other news shows that Honor may also obtain permission to adapt to Huawei’s self-developed Hongmeng system in the future. In contrast, this is also a differentiated competitive selling point)

This is the hope and the biggest variable of the domestic mobile phone arena. The current channel and supply chain of Glory have been restored, and the R&D platform has also chosen the same Qualcomm as Xiaomi and OV.

It is precisely because of the existence of the “breaker” of New Honor, it is difficult for Xiaomi, OPPO and vivo to say that they will dominate China or the world. Coincidentally, when it inherits Huawei’s technology research and development heritage, the glory shouts – the goal is the first in China and the world! Where will the victorious Libra eventually fall?

Who will have the last laugh in the bloody mobile phone arena?

Author: Yoyokuo