Huawei's terminal strategy changes the root cause

Tencent technology Guo Xiaofeng reported on May 8

From the 2011 smart phone OEM brand to today's free-brand, Huawei spent nearly three years, reached the index 52% global visibility. In the ensuing development, Huawei Terminal began to pay more attention to profit improvement besides continuing to strengthen brand building.

"Huawei invests more than $ 1 billion in research and development of mobile phones every year. Sustained high-input must have good profits as a support, while Huawei terminals only have a few billion dollars of profits each year." Huawei Consumer CEO Yu Chengdong, leader of flagship Ascend P7 After the release of Tencent Technology interview said so. This is also the fundamental reason why Huawei's terminal strategy has changed.

In the past six months, Huawei's terminal development was mentioned many times by Founder Ren Zhengfei in his internal speech. The most recent one pointed out that the consumer BG must focus on profit. This is because the development of a few years of Huawei terminals, scale, brand degree gradually increased, while the profit is not proportional to, and this is not Ren Zhengfei desired outcome.

From the point of view of scale, Huawei terminal shipped 52 million intelligent machines last year, into the global TOP3. This year, according to Yu Chengdong planning goal is 80 million units, or even higher 120 million units, but this premise should be to improve the supply capacity.

The last generation of P6, for example, was launched in June last year after much praise the industry, but the volume did not complete Yu Chengdong 10 million a year sales target, so far the world sold 4 million units, the Chinese market accounted for 60%. Yu Chengdong explained that in the second half of last year, Chinese market operators emphasized that 4G and 3G versions of P6 did not realize this point. When they started to debug 4G, they found that the demand for P6 in the market was still huge. The erroneous 4G market judgment caused the shortage in demand. P6 Really bought half a year.

When it comes to P7, Yu Chengdong still tens of millions of goals. He believes that the second half of this year, or even the fourth quarter is the real 4G network maturity, 4G P7 life cycle much larger than P6.

Brand degrees, after years of hard work and high input marketing, and with the Ascend series of praise from 25% in 2012 global awareness rose to 52% last year.

"There are only two paths to Huawei's terminal in the future either to grow rapidly or die, and to grow rapidly, we need to speed up brand building. This year, Huawei's global brand name goal is 60% and next year is%, the only way it will not die." Yu Chengdong Said.

However, the scale is, the brand is also good, in the view of Huawei, the terminal needs more profits. From Tencent's understanding of the situation, the terminal in recent years continue to invest heavily in research and development mainly from Huawei's traditional carrier business subsidies, and this model with the increase of time, terminal profitable state will inevitably be challenged by internal challenges .

Data show that Huawei consumer BG business revenue in 2013 exceeded 9 billion US dollars for the first time, profitability reached the best period in history. However, in the face of a major reshuffle in the global handset industry and the plunging of the domestic market into a price melee, Huawei management has repeatedly said that the terminal business should rely on profit rather than scale for restructuring.

According to Huawei's practice, the general business line leader will rotate every three years or so, and the other two BGs in Huawei have completed the redeployment in early April, while Yu Chengdong continues to dominate the consumer BG, showing that Ren Zhengfei Top executives at Huawei confirmed their work over the past three years. But the next profit target will be when testing Yu Chengdong's ability.

So how to improve the terminal profit? First, the price will be introduced on the price of Huawei will be more than 3,000 yuan of high-end models, followed by increased sales in the field of accessories support.

Yu Chengdong said frankly that the terminal product strategy still covers the high, middle and low three ranges, but will increase investment in the high end. Huawei's premium capability in the industry is currently higher than other domestic brands, which is an advantage.

In this P7 release at the same time, Huawei has also developed a series of accessories. Such as the perfect match with Huawei smart bracelet, you can monitor the quality of sleep, exercise fitness data, with mobile anti-theft management, remote camera and other functions, or even through the bracelet key and mobile phone APP can help quickly find hidden in the corner key.

According to overseas market research firm ABI Research data show that the global smart phone accessories market in 2012 up to 20 billion US dollars, the expected smart phone accessories market in 2017 to grow to 38 billion US dollars, the market for the entire industry is still a pattern "Blue Ocean."

Yu Chengdong said that the high profits of accessories in the industry is no longer a secret, HUAWEI terminals in the future will strengthen the introduction of accessories products, in particular, to strengthen the support of sales channels.