Rebirth 08: Rise from copycat phones

Chapter 247 The Worst Product in Zhiyun's History

Among the many product lines of Zhiyun Technology, the mobile phone business is undoubtedly the well-deserved flagship product, responsible for most of the group's revenue and main profit tasks.

In the past year, Zhiyun Technology has sold 180 million mobile phones worldwide.

In this series of mobile phone product lines, the S series is the undisputed core product, with sales reaching 120 million units, making it the best-selling smartphone in the world.

The S series of mobile phones alone had revenue of more than 100 billion US dollars and gross profit of more than 50 billion US dollars, contributing almost 70% of the gross profit of the entire group.

It can be said to be the best-selling and most profitable single series of products in the world!

Of course, a considerable portion of the gross profit from this mobile phone still needs to be distributed to the semiconductor design department and its supply chain department.

Because a considerable number of its own spare parts suppliers do not take much profit, this is equivalent to concentrating the profits of many departments on smart terminal products represented by the S series mobile phones.

This is a simple financial calculation, purely to highlight the gross profit of this phone and create better promotional materials for promotion in the capital market.

Compared with the continued strength of the S series of mobile phones, the C series, which also undertook important revenue and profit tasks for Zhiyun Technology in the past few years, began to show signs of being unable to cope with the situation last year, and its sales volume failed to achieve the expected high growth rate.

The marketing department had originally set the annual shipment target for the C series at 60 million units, but it was not achieved.

In the past year, the shipment volume of C series mobile phones was only about 50 million units, and the growth rate failed to meet expectations.

According to the analysis of Zhiyun Technology's internal analysts, the main reason is that the C series lacks cost-effectiveness in hardware compared to similarly priced mobile phones from other mobile phone manufacturers. At the same time, it does not have fingerprint recognition, aluminum alloy body and other unique selling points of Zhiyun mobile phones that are known to outsiders. Therefore, users are not very willing to pay a premium to buy them.

Then the outside world generally believed that only the S series of mobile phones could represent Zhiyun mobile phones, while the Zhiyun C series was despised.

A C series phone worth 3,000 yuan is also a Zhiyun phone? Are you kidding me!
Many people, especially those who claim to be proficient in mobile phones, regard those who buy the C series as being taken advantage of. They have no money but still try to save face by spending more money just to buy a Zhiyun LOGO.

It's probably about spending 300,000 or 400,000 to buy a compact car with a three-cylinder engine with a Porsche logo... No one thinks they are rich, but instead thinks they are vain and stupid.
If you spend three or four hundred thousand to buy a Porsche, what else can you get besides the logo?
What, you thought the problem was with the three-cylinder engine and the compact car?
Actually, it is not... According to the in-depth investigation and analysis of Zhiyun's strategic analysis department, they came to a seemingly ridiculous conclusion: the problem lies in pricing.

The C series phones are too cheap for the Zhiyun brand!
Then an awkward position of neither going up nor down was formed.

Inexplicably, a common sentiment among consumers has emerged: "If you have money, buy a Zhiyun phone. If you don't have money, buy flagship phones or even mid-to-low-end phones like Weiku and Xiaolan. They are very cost-effective... C series? I don't even want it. It's a low-spec, high-priced gadget. What else does it have besides the Zhiyun logo?"

Their Bluemax series is much better than your crappy C series. It also uses the Yun OS system, but has even higher hardware levels.

A comprehensive analysis shows that the positioning of the C series is stuck there!
Of course, even so, the shipment volume of Zhiyun C series still reached a huge figure of 50 million units, becoming the third best-selling mobile phone series in the world.

What else can I say? Zhiyun’s brand is indeed strong... Many people really buy the C series just for the Zhiyun brand!
Currently the world's best-selling mobile phone series.

The first is the Zhiyun S series.

The second is the fruit phone. There is only one series of fruit phones, so it is not easy to divide them.

The third one is the Zhiyun C series.

There are only a few companies in the world that can ship 60 million units of a single series per year. For other mobile phone manufacturers, it is already very good if they can sell 10 or 20 million units of a single series of mobile phones. For example, the four-star Galaxy is still struggling to break through the annual sales of 30 million units.

Of course, this is also related to the fact that many mobile phone manufacturers like to use the strategy of launching a large number of mobile phones.

For example, the sales volume of four-star smartphones is actually quite high. In the past year, the sales volume of pure smartphones was close to 160 million units.

However, they have too many mobile phone models, most of which are unsystematic low-end and mid-range phones, so there is no prominent flagship model.

Some other mobile phone manufacturers seem to be able to achieve sales of tens of millions of mobile phones, but they also rely on a large number of mobile phone models.

Including Weiku Electronics, a mobile phone company, which shipped more than 150 million smartphones in the past year, but the best-selling single series, the Bluemi digital series, only ships more than 20 million units per year.

The Little Blue MAX series, which is known as the Little Blue mobile phone brand under Weiku Electronics, has sold less than 10 million units.

In fact, more sales are divided up by a variety of miscellaneous models.

This is also the case when many people talk about smartphones nowadays. Some people tend to directly say S series, C series... because as soon as you mention these two series, people know that you are talking about Zhiyun S series or Zhiyun C series.

But what MAX series are you talking about? Who knows what brand of mobile phone you are talking about?
There are a lot of MAXs of various brands on the market...

Therefore, when talking about mobile phones from other mobile phone manufacturers, they are generally called by their brands, such as Xiaolan mobile phone, Wecool mobile phone, and Sixing mobile phone.

It will not be like Zhiyun phones, which directly use the S series or even specific models such as S12 to replace it.

As soon as you mention S11 or S12, basically anyone who has a little knowledge of mobile phones will know what you are talking about, but other brands of mobile phones cannot achieve this effect.

Of course, in foreign countries, especially in the United States and other regions, Fruit phones can also do this. When people talk about 4S, they basically know it is Fruit 4S.

From these perspectives, Zhiyun's C series is still a very successful mobile phone series, even if the sales growth rate did not meet expectations, and its popularity is quite good even on a global scale!

"Taking product positioning into consideration, especially the price, we decided to gradually build the C series into a separate sub-brand 'Zhiyun C' in the future, and develop multiple mobile phone models under this sub-brand to better serve the mid-range market!"

"Otherwise, if things continue like this, not only will it be difficult for the C series to get out of this embarrassing situation, but it will also affect the sales of the S series!"

Facing Ji Chenghe's suggestion, Xu Shenxue said: "This plan is still desirable, but we should be cautious when splitting the brands, and don't split them too far, otherwise the sales of the C series will be too low!"

Although the C series seems to be experiencing some sluggish growth now, the sales volume of more than 50 million mobile phones a year is still an important source of revenue for Zhiyun Technology!
It contributes more than 20 billion US dollars in revenue every year. Although the gross profit is a little less, it is still several billion US dollars. We can't mess around with it and lose it.

Ji Chenghe said: "We have conducted careful market analysis and made targeted adjustments. We also have plans for possible problems!" "This year's C series will still maintain a single C5 series, but we will revive the Zhiyun C5 Pro version. As the cost of fingerprint recognition technology decreases, we also plan to equip the C5 Pro version with fingerprint recognition, allowing our fingerprint recognition technology to be deployed in C series models for the first time."

"In addition, we launched a C5 Starry Sky Edition, which is priced at around yuan and targets the young market. Last year, we raised the price quite a bit and gave up the market below yuan. This is also the main reason why the sales growth of the C series failed to meet expectations!"

"In future promotions, the series of mobile phones will no longer be called C series or Zhiyun C5, but will use 'Zhiyun C' as the brand name to strengthen the brand characteristics of Zhiyun C!"

“Next year, we will officially promote Zhiyun C as a separate brand!”

"At the same time, in order to increase the appeal of the C series, we will further increase the performance configuration of this year's C series mobile phones. Although this will reduce the gross profit margin, it is expected to increase sales, expand revenue, and ultimately increase profits. At the same time, we can also further dilute the costs of various supply chains through larger shipments and increase total profits!"

For industrial products, sales volume is very important, and sometimes we would rather reduce profits in order to maintain sales volume.

As for Zhiyun Technology's products, it is impossible to reduce their prices for no reason as it will damage the brand too much.

What should we do at this time? Improving the hardware level to a certain extent so that users feel that the money is worth it will reduce the gross profit margin, but maintaining the brand style, increasing sales and expanding revenue will eventually increase profits.

Xu Shenxue thought that the series of solutions proposed by Ji Chenghe were feasible. He decided to just do it this way and give it a try to see how it went.

After talking about the headache-inducing C series, there is an even more headache-inducing A series!

Last year, Zhiyun Technology ambitiously launched a mid-to-high-end plan. On the one hand, it was to target other mobile phone manufacturers' flagship phones priced at 200 yuan and prevent them from competing with Zhiyun's S series. On the other hand, it was also to find an installation target for its own self-developed S series chips.

At the same time, we also want to open up a second high-end product line.

At the beginning, it sold well. However, within two months, people found out that it was a fake. The phone cost more than 4,000 yuan, but most of its hardware configuration was similar to the C series.

To put it simply, it is a C series phone with a glass back body and fingerprint recognition technology!

The price-performance ratio was really not good, which eventually led to the sales of this phone declining two months after it was on the market. In the last year, only more than 9 million units were sold, less than 10 million units!

This sales volume is not even as high as the S11X sold for the purpose of clearing inventory!
Sales of more than 9 million units may be considered a great success for new products of other mobile phone manufacturers, but for Zhiyun Technology, the leader in the mobile phone industry, it is a failure!

Even the outside world has widely commented that Zhiyun Technology has launched so many products, but the most unsuccessful one is the A11 mobile phone!

Neither word of mouth nor sales are good...even worse than the C series!

This year, in order to restore the reputation and sales of the A series, Zhiyun Technology is also prepared to make great efforts to give the A series a major upgrade.

The S300 chip in Zhiyun's exclusive self-developed S302 series has a dual-core 1.5GHZ plus a quad-core GPU configuration... Compared with the Zhiyun S series, the only difference in this mobile phone SOC is the main frequency, and there is no difference in other aspects.

In fact, this S302 chip is the chip with poor physical quality selected when the S303 chip was produced, and then it was shielded and frequency locked.

It is different from the S300 in the S301 series, which is a chip with only dual GPU cores... The S301 can only be said to have the same architecture as the S302/303, but they are actually two products. This thing is a mid-range chip specially developed by Zhiyun Semiconductor, with many functional cores castrated.

The new A12 phone will use a 12-inch retina display, just like the standard S12 version... This is the same screen as the standard version of the S series, and it's quite expensive.

When it comes to the two major components, SOC and screen, Zhiyun Technology can be said to be very conscientious.

The running memory maintains the 1GB running memory of the current mainstream high-end mobile phones, plus second-generation fingerprint recognition technology, glass back cover body, etc.

The workmanship and spare parts in other aspects have also been improved, making this thing a truly high-end mobile phone.

Although the cost increase will eventually lead to a decrease in gross profit margin, it is still better than not being able to sell anything.

Zhiyun Technology still hopes to develop a second high-end series.

Although the S series is powerful, no one would mind having an additional high-end series!
After the basic information of these two series of mobile phones has been finalized, there will be an S12X series later. Like last year's S11X, these are all products for destocking, which will extend the sales cycle of old spare parts products of its supply chain manufacturers and thus earn more profits.

For spare parts products with mature technology and greatly reduced costs, even if they are sold at a downgraded level now, the gross profit is higher than before. Therefore, many supply chain manufacturers are eagerly hoping that Zhiyun's old products can sell better.

However, Zhiyun Mobile’s older products are often greatly suppressed by newer products, and their sales will collapse directly after one year’s sales cycle.

This has put a lot of supply chain companies under tremendous pressure...

They worked so hard and invested huge amounts to develop the product line, but they only sold the products for one year and then the orders collapsed. They were really hurt.

Although Zhiyun will also give them orders for new spare parts for their new mobile phones, that means a large investment in R&D, production lines, etc.

All the money I earned after working so hard for a year was invested again...

In response to this situation, Zhiyun Technology temporarily launched the S11X last year not to make more money for itself, but to help supply chain companies make more money.

This year, we will continue this strategy... to make a mobile phone to clear inventory and help the supply chain make more money.

It is not just for third-party supply chain manufacturers. In fact, many supply chain companies are wholly-owned or controlled companies of Zhiyun, so it is also for itself.

In this case, the S12X naturally continues the previous three-section aluminum alloy body design and adopts the previous generation 45nm process S201 chip, dual-core 1.5GHz.

Then there is a 1-inch screen, GB of memory, second-generation fingerprint recognition, etc., which are all very mature old-generation parts and components. They are also easy to integrate and the price is not expensive, selling for around yuan.

The new C series, A series and S12X will be the main products of the autumn launch conference in August!
As for whether it can gain market recognition, especially whether the new and improved A series can make a comeback, this still needs to be tested by the actual market!
Even for Ji Chenghe, it is difficult to determine whether the new A12 will be successful!

(End of this chapter)