Rebirth 08: Rise from copycat phones

Chapter 338 The Road to High-End
As March began, the smart terminal field once again set off a wave after a few months of silence.

Major manufacturers have chosen to hold spring press conferences in March and release various new products.

Zhiyun released the S15X and C9 mobile phones, as well as new tablets and smart watches.

Fruit also chose to launch a small-screen flagship phone, the Fruit SE, at this year's spring conference, while releasing a tablet computer and an ultra-thin business notebook.

The Fruit SE is also a new attempt by Fruit to clear its inventory and enter the mid-range model market. Previously, Fruit had launched the Fruit 5C, but the effect was not very good, with both good reputation and poor sales.

Seeing that Zhiyun's SX series launches a new model every year, and can sell 10 to 20 million units a year by using mature and cheap spare parts, it can reap the benefits while also expanding into the mid-to-high-end market. This makes people jealous.

Therefore, the Fruit SE was launched, with a classic three-section aluminum alloy body, a four-inch screen, and an A9 chip that was only released last year. It can be seen that it has great ambitions and is directly competing with the Zhiyun SX series.

In addition to the two leading companies mentioned above, Samsung was also unwilling to lag behind and also held a press conference in March to launch its new generation of Galaxy series, namely the Galaxy S7 and the Galaxy S7 Edge with a larger screen size, more expensive price and dual-curved screen.

It is worth noting that this series of new mobile phones from Samsung continues to use the typical three-section design on the front, that is, the upper part of the front of the phone is where the camera, earpiece, etc. are located, the middle is the screen, and the bottom is the front fingerprint button.

They didn't adopt a full-screen design.

This is because they do not have 3D face recognition technology, and the under-screen ultrasonic technology is not perfect, and there is no under-screen photoelectric sensing technology... they are in a very embarrassing situation.

In this case, they chose to stick with the traditional design this year and did not take the risk of using a rear fingerprint.

In fact, it's not just four stars. According to intelligence obtained by Zhiyun Group, the new Apple flagship currently under development will most likely continue to use the traditional three-section front design and will not rashly adopt a full-screen design this year.

Large companies like Fruit and Sixin actually have a lot in common with Zhiyun, which is that they are actually very conservative in many cases... When the technology is not mature, they would rather not use it than make major changes.

On the contrary, other mobile phone companies will come up with more weird things for selling points and publicity, and they are more adventurous.

Weiku Electronics is planning to use under-screen optical fingerprint on the Bluemax8 Pro to be released this fall.

Of course, that was in the fall. As for now in March, Weiku Electronics released the Little Blue MAX8, which continues to use a full notch screen design and a rear fingerprint. Its overall design is still quite stunning. After its official release in March, it has attracted considerable market attention.

Bai Qiwen found Xu Shenxue with a smile and said that the market is booming now and the shipment volume of their Little Blue MAX series is expected to reach 25 million units this year.

This is not an easy achievement!

For the Xiaolan mobile phone, which focuses on the mid-to-low-end field and has been considered a mid-to-low-end mobile phone for a long time, its road to a price point of more than 3,000 yuan has not been very smooth.

The first generation of Little Blue MAX had annual sales of only a few million.

After the subsequent release of full-screen mobile phones, sales increased, gradually climbing to more than 10 million and around 20 million.

This is almost the best-selling high-end model of a domestic mobile phone brand in China, except for the Zhiyun phone.

The sales of other domestic mobile phone manufacturers with models priced above 3,000 yuan are even worse. The best they can achieve is a few million units. Many mobile phone manufacturers don’t even have such models... The competition in this price range is too fierce.

To be precise, there are not many high-end models in this price range. At most, there are the Zhiyun C series, plus Warwick, OV, and Xiaolan MAX, and then there are some four-star models.

There are few models, and overall internal competition is actually not great...

But the problem is that mobile phones at this price will be strongly squeezed by high-end models centered on the Zhiyun S series!
This is true both in domestic and foreign markets.

Zhiyun's S series is at the top, supplemented by the A series, plus a fruit flagship model and a four-star Galaxy model, which has almost snatched up all the high-end market share.

And it also greatly suppressed the mid-range and high-end market...

In fact, in the global market, the market of 3,000 to 4,000 yuan is not that big. If it is a market of 4,000 to 5,000 yuan, it is even smaller.

According to data from a foreign survey and analysis agency.

In the price range of 3,000 to 5,000 yuan, the global market share is only about 10%.

However, the market share of models priced above 5,000 yuan is probably more than 20%.

At first glance, this seems very strange.

Why do expensive products sell better, while cheap products have poor sales!

This is because of the unique structure of the smartphone market, which is large at both ends and small in the middle. After all, the price of a smartphone, even a high-end model, is only around five or six thousand yuan, and many ordinary people can afford it if they grit their teeth.

This results in a considerable market share in the high-end market with prices above 5,000 yuan. If we only talk about sales volume, the market share is even larger, almost accounting for most of the market sales volume.

The market in the middle range of 3,000 to 5,000 yuan is relatively small, and it is neither going up nor down, which is quite awkward.

The market below 3,000 yuan is the mainstream market, with very large sales volume, but low prices and low profits.

Among them, the money above 5,000 yuan is monopolized by Zhiyun and the fruit family.

Even the four-star ones can only get some leftovers. Most of the time, the models they release for more than 5,000 yuan are often reduced to more than 4,000 yuan when they really sell well. The sales volume is very low, and their main sales are still models that cost more than 4,000 yuan.

In the current mobile phone market, there are actually only two high-end mobile phones priced above 5,000 yuan that consumers can accept: the new flagship of Fruit, Zhiyun S series.

The others don’t work well, the Galaxy series doesn’t work well.

If a mobile phone manufacturer makes a mobile phone priced at more than 5,000 yuan, it means that it is directly competing with Fruit and Zhiyun in a head-on battle!
Then consumers will ask this mobile phone manufacturer a soul-searching question: Why do you sell your products at the same price as the Zhiyun S series?

Not to mention the price range of more than 5,000 yuan, even in the price range of 4,000 to 5,000 yuan, it is inevitable to have a more direct comparison and fight with the Zhiyun S series and the Fruit flagship.

I still say that, your crappy phone costs more than 15 yuan, I might as well spend a few hundred yuan more to buy Zhiyun S!

This is also an embarrassing problem encountered by a large number of mobile phone manufacturers' high-end flagship models, including the four-star Galaxy!
Once the price reaches over 4,000 yuan, it will inevitably be compared with high-end phones from Apple and Zhiyun, and the comparison will be ruined!

The brand value cannot be sustained.

So the four-star Galaxy series, after so many years of hard work, still has mediocre sales, and the annual sales target of 30 million... has almost become a familiar meme to many people.

Some time ago, a talk show host on an American TV variety show brought up this issue and mocked the unfairness of the American mobile phone market.

After the Zhiyun S series was banned, people would rather buy the smuggled Zhiyun phones than the 30 million phones.

This 30 million mobile phone refers to the four-star Galaxy series.

The strength of Zhiyun's S series not only suppresses high-end models from manufacturers such as Samsung, but also its own A series and even C series.

The annual sales volume of S series models exceeds 250 million units, which is no joke.

It is clearly placed right above them. It is the ceiling for any mobile phone manufacturer, the kind that presses them down and makes them unable to raise their heads.

Zhiyun’s biggest competitor, Fruit, is now in trouble. Its sales have stopped increasing and entered a very embarrassing period of stability.

Two years ago, they still shouted the slogan of striving for an annual sales volume of 200 million units, but now, let alone an annual sales volume of 200 million units, it is still unknown whether the annual sales volume of 150 million units can be maintained.

Outside analysts are not optimistic about this year’s fruit sales!
The reason is simple. The Zhiyun S series, especially the S15MAX, is so powerful. In addition, many people have rumored that this year's S16 will adopt 3D face recognition and full-screen design for the entire series, which makes many people look forward to it.

They can’t afford the S15MAX with a starting price of yuan, or it’s too painful to buy it... After all, it’s just a mobile phone, so they’ll buy it for yuan after gritting their teeth, but they really can’t bear to part with the money.

But they can still afford the entry-level version of the S series at around 5,000 yuan.

However, the real high-end market capacity is limited. Zhiyun eats more, so it naturally eats less fruit, which greatly suppresses the price range of 4,000 to 5,000 yuan.

In the market price range of 3,000 to 4,000 yuan, it is also suppressed by Zhiyun's S series, as well as the fruit flagship and four-star Galaxy.

On the one hand, there are people who are willing to spend so much money to buy a mobile phone. They will most likely choose to pay more and buy Zhiyun S, Fruit or Galaxy.

If you can’t buy a new model, you can also buy an old discounted model, or buy a replacement model, such as the Zhiyun A series, SX series, etc.

At the same time, the market capacity of the entire smartphone is limited. After all, the number of people who can buy mobile phones is limited, and the total sales volume is only about 1.5 billion units a year.

If more high-end phones are sold, then naturally fewer mid-range and even mid-range models will be sold.

As a result, the overall market share in the price range of 3,000 to 4,000 yuan is also very small.

After all, even Zhiyun’s own C series has been suppressed, with sales continuing to decline, not to mention the others. It is actually extremely difficult to achieve a breakthrough.

It is not easy for Weiku Electronics' Little Blue MAX series to achieve sales of 25 million units, which fully proves its strength as the world's fourth largest mobile phone manufacturer.

Other manufacturers that are doing well in the market range of 3,000 to 4,000 yuan include the newly emerging Huawei's M series and P series, and the less eye-catching but actually large sales volume of OV's high-end model series.

Their high-end flagship phones are also in this price range and sell quite well.

It is normal for Huawei to achieve a breakthrough at this price range. After all, they are using self-developed chips and their chip technology capabilities are quite good. They are the third mobile phone manufacturer in the world to use self-developed chips on a large scale and have unique technical advantages.

In addition, Warwick has a strong presence in overseas markets, having entered the European market early on, so its products sell well in overseas markets.

However, the sudden rise of the company OV was beyond the expectations of industry insiders and shocked ordinary people.

The two brands under VO rely on offline channels and quietly ship large quantities of products, which is a bit like the approach of surrounding the cities from the countryside, and their mobile phones are taking a rather special approach.

Their mobile phones are currently highly imitative... Many of their mobile phones look very similar to Zhiyun's S series. They also imitate Apple... Mainly because Apple is not available in China, but Apple's mobile phone designs are still quite desirable, and many people like them, filling the market gap in this relatively niche market segment.

Some people joked that OV copied Zhiyun with one hand and Fruit with the other!

And their strategy was very successful!
The Zhiyun S series, which costs six to five thousand, or even seven to eight thousand yuan, is not affordable for everyone, especially the middle and low-income groups who can only look on with envy.

At the same time, although the fruit is not available in China, as the world's second largest mobile phone manufacturer, its high-end models that compete with the Zhiyun S series are actually quite famous in China, and are often reported by the media... even if most of the time they are just a foil for Zhiyun.

At this time, OV came up with a mobile phone that is highly similar to the Zhiyun S series, which only costs two to three thousand yuan. Coupled with the high commissions of offline channel salesmen, consumers are often fooled and buy an 'OV version of Zhiyun S15MAX' without knowing it!
Or they might take out a high-end imitation of an Apple flagship and say to consumers, look, what is this, an Apple phone? It sells very well abroad. It can compete with the Zhiyun S series, how can it be bad? But this phone is not available in China. Here, I have a phone that is similar to the Apple one. Would you like to get one? It only costs over 2,000 yuan, which is very cheap.

The high degree of imitation and fraud, coupled with the strong strength of offline channels, has enabled this mobile phone manufacturer to rise rapidly. Moreover, it did not rise by relying on low-end models, but took the mid-range route and quickly entered the high-end field.

Good sales, high revenue and high profits!

It is also one of the few manufacturers in China that can enter the high-end market with prices above 3,000 yuan!

Even Lei Jun, the CEO of Dami, would drool when he saw it: the price is 3,000 yuan, he wants it too... Unfortunately, Dami has been playing the ultimate cost-effectiveness game for many years, focusing on online business, and also paying too much attention to technology enthusiasts and young male market, resulting in their cost-effectiveness brand attribute being too deeply rooted in people's hearts.

Once you label your product as cost-effective, don’t expect to enjoy brand premium... Cost-effective brands will often be questioned or even abandoned by old users when they try to enter the high-end market!

Then I got into a very embarrassing situation!
Users of other brands will think you are low-end and ignore you.

Old users of my own brand think that you are no longer cost-effective and have betrayed them... I just can't stand the high prices and low specifications of brands like Zhiyun, so I sell you cost-effective mobile phones. Now that you are no longer pursuing cost-effectiveness, I will naturally abandon you.

Therefore, it is difficult for Rice to move towards the high-end market, much more difficult than for Huawei, OV and Weiku Electronics... This is a huge negative effect brought about by brand positioning, and it is not easy to erase this negative effect.

The only feasible way is probably to wait for these young users with the ultimate cost-effectiveness to grow up, start working, gradually become middle-aged, and have more money in their pockets, and then strive for the high-end market... As for now, forget it!

The above is still referring to the so-called high-end market of 3,000 yuan!
Many domestic mobile phone manufacturers, consumers, and media organizations believe that products priced above 3,000 yuan are already in the high-end market... Zhiyun Group has never admitted this!
Zhiyun has always believed that the market is high-end and the rest are mid- and low-end markets!

This is how different mobile phone manufacturers perceive high-end mobile phones. Of course, this positioning is more for publicity purposes.

However, the price range of 4,000 yuan recognized by Zhiyun has become a term in the industry.

Because Zhiyun is building a moat for its own high-end models in the market, when deploying the ceiling, it uses the price of 4,000 yuan as an anchor point.

This is a very special phenomenon!

Zhiyun Group's A series and SX series of mobile phones, these two phones plus some of Zhiyun's old S series phones priced at more than 4,000 yuan, have a market role in Zhiyun Group, that is, to act as gatekeepers. It doesn't matter how much they sell, what matters is that they block the 4,000 yuan threshold.

Avoid attacks on its own S series flagship phones priced above 5,000 yuan!

Similarly, Apple has a similar strategy: through its old models, the previous Apple 5C and the current Apple SE, it is strictly guarding against other mobile phone manufacturers' impact on the high-end market and trying to stick to the price point of more than yuan.

Zhiyun and Fruit both have highly consistent opinions on this matter and have worked together before.

Back then, a large number of high-end models of mobile phone manufacturers were strangled by Zhiyun and Fruit.

Although Zhiyun and Fruit are fighting each other to the death, in the years when smartphones exploded and the market grew, the two companies only seemed to be in fierce competition on the surface. But in fact, in the eyes of many mobile phone manufacturers, they were in cahoots with each other, and joining forces to clear the market was the forte of these two companies back then.

A large number of mobile phone manufacturers including Nokia, Motorola, BlackBerry, etc. were killed one after another by these two companies.

Zhiyun and Fruit became the world's number one and number two respectively by stepping on the corpses of a large number of traditional mobile phone manufacturers!

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So far, there is only one high-end model that has survived the joint stranglehold of Zhiyun and Fruit, and that is the very special four-star Galaxy series.

The four-star Galaxy series is also the only new model in recent years that has broken through the high-end threshold set by Zhiyun and Apple.

In order to break through the tight defense of Zhiyun and Fruit, the Li father and son mobilized almost the entire Six-Star Group's strength to compete with Zhiyun and Fruit on a global scale.

I don’t know how many things happened during this period, but ordinary people don’t know about it.

Ultimately, the success of the Galaxy series is inseparable from these two markets.

One is their domestic market in South Korea... A few years ago, smartphones faced a huge impact from Apple and Zhiyun. Traditional mobile phone manufacturing powers, Japan and South Korea, were once in a state of extreme panic.

As for Japan, after the panic, it tried to counterattack, but ultimately failed. Japanese mobile phone manufacturers have not disappeared to this day, but have basically fallen out of the top ten in the world and can only survive by relying on a few markets.

In South Korea, the situation was different from that in ordinary countries. The smartphones made by four stars in those days were obviously very mediocre. At one point, four stars even developed their own system, and later they developed the Android system. But to be honest, the early four-star smartphones were not very good.

But...how did they do it?

Almost everyone in the country supports Samsung or LG, no matter how bad their phones are!
The phenomenal S10 phone back then only had a mere percent market share in the Korean market... This is extremely strange and completely inconsistent with market rules.

How popular was the S10 back then?
The biggest wish of young and beautiful girls in many countries is to get an S10 phone as a gift, and they are willing to give themselves for it.

This is the case in many places, including Europe, America, Japan, China, India, etc.

Such an S10 did not cause any waves in the Korean market.

Ordinary Koreans who don’t use the Internet much and don’t understand external English information have never even heard of such a mobile phone... Because local TV stations and many media newspapers even refused to publish advertisements for Zhiyun’s S10 mobile phone, Zhiyun’s marketing staff in the local market were very helpless.

Faced with this kind of all-round rejection from almost the entire society, you can’t just sell your phone just because it’s good.

Back then, the four-star brand relied on the particularities of its domestic market to tenaciously maintain the survival of the Galaxy series, and then gradually improved it and pushed it into the global market step by step.

However, even at that time, the Galaxy series still had difficulty surviving and could only rely on its domestic market. It did not sell well in other countries' markets.

It wasn’t until 14 that Zhiyun and Fruit parted ways and started fighting each other… that the Galaxy series of Four Star saw an opportunity.

The Galaxy series replaced the Zhiyun S series that withdrew from the US market and became the second largest high-end mobile phone representative in the local market.

In the Chinese market, the Galaxy series took over from the withdrawn Apple and became the second largest high-end mobile phone brand in China.

Taking over Zhiyun or Fruit models from the two major markets allowed the Galaxy series to achieve this gorgeous breakthrough.

As a result, the Galaxy series has officially become the third representative high-end model in the world!

This is also the first high-end model in the world that breaks through the blockade of Zhiyun and Fruit!
The success of the Galaxy series is a result of chance caused by many factors and is almost impossible to replicate!

This is not just a technical or capital issue, it also involves very complex economic and regional environmental issues... In order to break through the blockade, the four stars actually made certain compromises.

For example, we accepted a series of harsh conditions from Zhiyun and adopted a large number of Zhiyun W series chips.

To date, a large number of smart terminals sold by Sixin still use Zhiyun Semiconductor's W series chips on a large scale. Sixin purchases 70 to 80 million Zhiyun Semiconductor's W series chips every year.

Otherwise, it would be impossible for Four Stars to thrive in the Chinese market and he would have been slapped to death by Zhiyun long ago.

As for the US market, it is unknown what price Four Star paid to the US consortium, but referring to Zhiyun, the price should not be small.

Today, in the Chinese market, it would be very difficult for other mobile phone manufacturers to break through Zhiyun's blockade, such as bypassing Zhiyun to have a monopoly, or to impact the high-end market of more than 5,000 yuan.

The main reason is that Zhiyun has absolute control in China. Almost the entire domestic smart terminal supply chain is under the control of Zhiyun... Without Zhiyun's approval to open the supply chain, other mobile phone manufacturers cannot even produce a high-end smartphone!

From chips to screens, to mobile phone batteries, memory particles, flash memory particles, fingerprint modules, etc., it is difficult to bypass Zhiyun.

Of course, you can also import...but imported goods are expensive, and there are tariffs.

You are using imported products to make high-end models. The bosses of domestic mobile phone manufacturers will wake up laughing in the middle of the night...

In the US market, fruit is not just for show. Even a strong company like Zhiyun can't survive in the US, so other manufacturers should not expect to threaten fruit's dominance in the US market.

In the Korean market, Samsung has completely suppressed LG, also a Korean company. LG's mobile phone business is getting worse year by year and it has no chance of turning around, let alone foreign manufacturers.

As for Japan, their mobile phone manufacturers are almost finished.

In Europe, Nokia and Asia are both finished, and there is no such thing as an electronic consumer industry chain.

It is impossible for other markets to cultivate any large-scale new mobile phone manufacturers, come up with any high-end models, and then seize the most profitable high-end market. Even if there is... the above three companies will join forces to strangle them!

Business competition is sometimes very cruel!
Under such circumstances, a large number of mobile phone manufacturers naturally focused their attention on the price range of 3,000 to 4,000 yuan.

Domestic mobile phone manufacturers include Weiku Electronics, Huawei, OV and even Dami, as well as foreign manufacturers such as LG and a number of Japanese mobile phone manufacturers.

They all took the high-end route and priced their products at 16 yuan, which led to fierce market competition in early !
In this regard, Zhiyun Group is sitting firmly on the Diaoyutai!

Because Zhiyun Group not only sells mobile phones, it also sells various core components of smart terminals, from SOC to memory, flash memory, screens and even batteries, vibration motors, charging heads, cables, etc. It sells them all...

In order to gain a competitive advantage, many domestic mobile phone manufacturers often sell mid- to high-end mobile phones at relatively low prices, resulting in low gross profit margins. In the end, their profits are not as much as Zhiyun itself.

This is also the reason why Zhiyun supports a large number of domestic mobile phone manufacturers...the more they sell, the more money Zhiyun makes!

(End of this chapter)