Mobile phone industry makes Lei feel terrible

After spending 7.4 billion yuan in two months, December 16, Lei 45 birthday on the day, he received two from the opponents of the "gift", one is 360 investment Alliance Cool mobile phone, the other is Huawei released a new mobile phone glory 6 Plus, he told reporters, "the industry's competition horror is a mess." ”

According to IDC's latest statistics, the three quarter of this year, millet mobile phones worldwide sales of 17.3 million units, accounting for 5.3% of the world's market share, followed by Apple and Samsung climbed the third World sales position.

The gap between millet and Huawei in handset sales is tiny, but millet is climbing faster, up 336% from a year earlier.

Over the past two years, the two companies have climbed out of hundreds of Chinese mobile phone companies, not only the king of domestic handsets, but also the market pattern of China's mobile phone market being occupied by international brands.

In the eyes of the outside world, Huawei Hardware development for the long, millet is a typical software leadership hardware of the Internet ecological thinking, the confrontation between Huawei and millet, mobile phone industry is the two development model of the duel, but is far from the decision to win or lose time.

Huawei

The strategic division of Huawei

Huawei consumer BG Interior never taboo to make millet as a direct competitor.

Last November, Huawei set up an independent internet phone brand "Glory", Huawei Consumer BG CEO Yu put it, the glory of this son brand is used to compete with millet, while the Chinese brand strategy is to take the boutique and high-end routes, is to compete with Apple and Samsung. Even the glory of the brand advertising language "for the Fever and health", but also with millet "for a fever and health" confrontation.

2014, the Glory brand mobile phone sold 20 million units, sales of 3 billion U.S. dollars, Yu that this is the overall mobile phone business in the 2014-year sales breakthrough of 12 billion U.S. dollars provides an important guarantee.

It is clear from the outside world that, in terms of sales and sales, the Glory brand cannot compete with millet. Glory a year's sales, and millet only a quarter of the sales, but Huawei does honor the glory and millet combat main force.

Glory in the business model to imitate millet, the main price, with ultra-low prices to promote high configuration, high experience of mobile phones, quickly grasp the young market. However, unlike Millet is, the glory of this play, in addition to the electric platform to save the traditional channel 30%-40% channel space, but also rely on Huawei's strong supply chain management system.

This provides a strong competitive edge for Huawei's terminal strategy. In a recent interview with the media, Lei said that with the increasing sales, millet is an urgent need to complement the supply chain short board.

In 2013, more than 60% of Huawei's profits came from foreign markets, and the proud brand, with its meagre profits, couldn't contribute too much to its profits. Huawei from the beginning is a hardware manufacturer, in the internet thinking to occupy the end of the market reality, the glory of a year running for the significance of Huawei is to show the outside world, Huawei has been in the homeopathy, for this changeable era ready.

It is also believed that Huawei's market dynamism is that when Apple and Samsung are increasingly suspicious of next-generation products, Huawei's innovations in hardware are clear. This paves the way for Huawei to step into the high-end handset brand.

This year, Huawei launched the high-end flagship smartphone P7 and Mate7, of which the lowest price of 3799 Yuan Mate7 in the release of less than one months after the sale of millions, gold and high distribution version even in the market was increased to 5000 yuan sales.

The success of the two handsets helped Huawei to turn from low-end to high-end brands, a middle-class person at China Mobile's terminal company has judged.

Yu that Huawei's high-end strategy has been successful because it relies on Huawei's core technology to make products that exceed consumer expectations.

Huawei spends more than 1 billion dollars a year on research and development, from self research chips, software, designs to hardware endurance.

From the white card of the operator's custom channel to today, Huawei's global brand awareness has risen from zero to 65%, and the brand's preference index has risen from minus 24% to positive 33%. From the whole of Huawei's share, because of Samsung's recession, Huawei and its gap further narrowing.

Huawei's stance of focusing on end-to-end vertical industry chains and hardware innovation is also seen as unsustainable. In the user era, a hardware brand without software ecology may be hard to grow green, Samsung is a best example.

Samsung is starting to show a decline in performance due to a failed layout in the software sector. Gartner statistics show that the three quarter of this year, Samsung Electronics global smartphone sales of 73.21 million, the year-on-year decrease of 7 million, the market share of 24.4%, down 7.7%.

In the area of ecology, Huawei is in the footsteps of millet. In September this year, Huawei's low-key launch of its own operating system Emui, Huawei's statistics show that more than 90 million users worldwide are using more than MIUI 70 million users.

Huawei's concept of software ecology is clearer: Emui can be installed on mobile phones and can be installed on all kinds of devices such as TV boxes, routers, televisions, watch bracelets, and so on. Emui will build Huawei's own software platform to connect all the hardware portals that are worth connecting to.

Yu that millet builds a closed system in a capital-related way, and then uses its own interests in the mobile phone, which is not in line with the principle of openness. He stated that Huawei would not adopt this approach and would open its cooperation to the fullest extent, for example, in the smart home sector, the visible brands in the market are in contact with Huawei, will not only bundle one.

This September, Huawei cooperated with Alipay to launch Mate7 's fingerprint-recognition payment system. On the technical level, Huawei's press fingerprint identification technology has reached less than 1 seconds of fingerprint unlock speed, than the other fingerprint phones on the market at least 80% faster, coupled with Huawei's fingerprint identification algorithm, so that Mate7 has the most stable fingerprint recognition.

The first time to launch a fingerprint payment with Apple and Samsung has revealed more of Huawei's ideas on software eco-deployment. So far, however, Huawei's software layout has yet to reap tangible results.

A number of internet people interviewed by Caijing said that Huawei has lagged behind the layout of its own software ecology, and similar to Samsung, hardware manufacturers have a unique vertical industry chain thinking, it is difficult for Huawei to learn to use horizontal platform thinking to make decisions.

There are also those who believe that the "end Taiyun" strategy within Huawei will be the opportunity for Huawei to build an ecosystem.

Ecological gain and loss of millet

In several changes in the market, millet with a running posture completed from entrepreneurship to the world's third growth process. The process took only four years.

Millet

April 2010, Lei founded Millet Company. Millet pioneered the use of Internet models to develop mobile operating systems, enthusiasts participate in the development of improved mode.

Unlike traditional mobile phone manufacturers, millet: from the user experience to create and sell a variety of hardware, hardware as the portal, through the provision of software and content to obtain revenue (user ARPU value), but also to achieve business users, access to user data, analysis of user data, Mining user needs and then can launch new hardware products, so the cycle will be able to obtain hardware scale of the ecological platform.

For four years, although the entire mobile phone market will have off-season, peak season, but Millet has been in accordance with their own pace every quarter, until the sales volume of the Third World.

Lei in a recent interview with the media, including Caijing Magazine, Millet won three reasons: first, the hardware on the real material, high-performance, high experience, the keyword is cost-effective on the super user expectations; second, E-commerce Direct, efficient operation, the advantages are obvious; Can save a lot of advertising marketing costs.

Millet has entered the market with high performance, high experience and low prices when Chinese consumers are most in need of cost-effective smartphones, which has benefited from a blowout in China's smartphone market. But compared to the digital level of reputation, Lei more concerned about the whole industry diagnosis and grasp.

The traditional hardware era has passed and the user era is coming. Lei opens up a new advanced path for hardware entrepreneurs: Start with an idea to improve the user experience, and then use hardware and software products to implement the experience. They take the creation experience as the core, to hit the user pain point as the starting point.

Millet Future Ecological Empire Map is a challenge to Apple, Samsung's powerful weight. Lei gave Millet a cake, this cake to MIUI system as the core, composed of three different millet.

The first millet is by the millet cell phone (including millet plate), millet TV (including millet box) and millet router three hardware core products; The second millet is MIUI and its construction of mobile Internet content and service ecology, and millet plans to spend 5 billion of dollars invested 100 smart hardware companies will become "the third millet."

Because of the success of the mobile phone business, and the continuous investment of MIUI system, millet in the ecological chain of the extensive enclosure so that the industry is askance. Some people think that the key to this ecosystem is the software system platform, "if the millet to make a standard ecological chain, so that all the hardware running on the software, that is a great thing." ”

Some of the interviewees interviewed by Caijing said that the advantage of the millet eco-chain lies in the infinite imagination space. That is, the hardware is gradually moving towards free, through the application and content to obtain profits.

Qihoo 360 Chairman Zhou at the 2014 Forbes China Innovation Summit has expressed the view: in the Internet thinking, hardware can be free, millet mobile phone in the future will continue to low profits, more profits will be obtained from the platform. If true, millet will once again subvert the entire mobile phone market, the threshold of replication is further enhanced. Of course, a set of eco-systems that co-ordinate all hardware entrances is not built.

At the same time, millet from the Internet business model, run faster, the hardware short plate exposed more thoroughly. Millet has been known as an internet company, but its competitors have been Huawei, Lenovo and other authentic terminal manufacturers.

The turning point occurred in the three quarter of this year. In the quarter, the Millet market share ranked third in the world, but millet in the internationalization of the first station in India has encountered Ericsson's patent lawsuit.

Before, millet latest release of ultra-low-priced air purifier is Japan's air purifier manufacturers to blame through the cooperation approach to plagiarism, after the storm, millet quietly removed the Millet mall home filter recommended ads.

Lei has seen the lack of millet in the hardware industry chain level. November, Millet quietly teamed up with the core set up the chip company Pine Cone Electronics. Chip expert Yanhui that, the biggest mission of the pineal gland Electronics is to ensure that the production capacity of millet low-end mobile phones, millet mobile phone next year to impact billion sales of effective guarantee.

Yanhui predicts that the establishment of the pineal gland can help millet to release 499 or even 399 red-metre mobile phones based on the core 1860 solution in a short period of time.

Millet has always been good at using mergers and acquisitions or shares to quickly replenish the hardware short board. However, with the investment of intelligent hardware manufacturers of the ecological matrix effect is very high in the chip area of technology research and development threshold, the effect of such a rapid model, still to market test.

Roads

Huawei is good at hardware, Millet is good at software ecology, but the two face is actually the same market and the same consumer group. At the same time, Apple's successful experience shows that in the smartphone world, the hardware is competitive, the ecosystem brings users stickiness, for a company, the two are in fact indispensable.

According to this logic, Huawei's challenge is actually two, first, in the next generation of hardware research and development in the first breakthrough in the promotion of user experience based on the creation of a new hardware advantage; second, quickly make up the software ecological Short board.

Millet challenge more realistic, Lei summed up the future of the three major pressures: one is the capacity of the problem, the second is the increasing risk of postpartum, how to ensure product quality; In addition, with more and more sales, how to accurately forecast sales? Millet profit is very thin, as the category of millet increased, How each model can improve inventory turnover is a key issue.

In addition to the hardware and supply chain challenges, Millet also has a huge challenge is how to integrate the acquisition of the 100 hardware companies into their own ecology, rather than simply replicate the 100 smaller volume of millet.

Industry personage Lin thinks, Huawei and millet two kinds of pattern difference is very big. The millet pattern heavy dependence takes the shortest time, the lowest cost, the best experience fast moves to cut into the new product and the market comprehensively. The traditional hardware thinking represented by Huawei emphasizes to win by thickness and strength, the risk of which is that the decision chain is too long to lead to missed opportunities.

"This is like playing games, the traditional enterprises will follow the rules of the pass dozen strange, and internet companies will look for the abnormal combat." "But Lin to Caijing reporter stressed that no matter what kind of business model can only be temporary and can not always avoid technical competition," and the wonderful posture can not replace the strength and thickness.

The rivalry between Huawei and Millet has gone beyond the scramble for short-term market share, but which model is more capable of owning the future.

In the layout of the future, Huawei and millet face more pressure in fact from the product itself performance and experience, brand, supply chain management, marketing capabilities. In the global market, Samsung and Apple are still far more than third in market share and sales, with global smartphone shipments slowing sharply, average prices falling and competitive pressures increasing.

Between near and far, reality and ideal, Huawei and millet starting point opposite, different paths, but always stand under the same sky.

In fact, in addition to Huawei and millet, other domestic mobile phone play different, also bring competition variables. In November this year, Lenovo completed the acquisition of Moto, Lenovo President Yang said to Caijing reporter, after the completion of the acquisition, Lenovo actually in the global market share has surpassed millet, ranked third.

In the near future, 360 joint venture to join the cool, according to the planning joint venture will fully combine the cool in the hardware design, production, supply chain management advantages, and 360 in the Internet security software, mobile application design and online marketing to promote the strength.

Given the strength of both sides in their respective fields, some in the industry believe such alliances are likely to produce a new Huawei or millet.

In addition, under the pressure of the market, has always focused on exquisite and small-crowd of the charm family has also begun to launch the following low-end brand charm blue. Whether it is hardware or software combination, in the mobile phone market is becoming more saturated today, Huawei and millet stand in the middle of the entire mobile phone market, one side to the peak impact, while accepting more competitors challenge.

In recent public occasions and media interviews, Yu and Lei both sent a similar feeling: competition is too cruel, be careful, make sure no mistakes.

On the other hand, many Wall Street analysts interviewed by Caijing say Apple remains the most powerful company in smart hardware, with no rivals. When Huawei and millet touch the ceiling, they depend on their future strategy.