author | Yuan Silai
editor | Su Jianxun
Huawei and Xiaomi conference crashed, but this time they are no longer facing each other in the same space.
If you only look at mobile phone products, nova10 is not as good as Xiaomi 12S. Xiaomi's press conference was held on the same day as Huawei's, and it used and Leica , which had exclusively cooperated with Huawei. Xiaomi has spent a lot of effort and money on the 12S flagship phone, hoping that it will take away the glory that once belonged to Huawei's P series.
Huawei’s mobile phone products show signs of struggle. The configuration of nova 10 will not be very competitive in 2022. Whether it’s a 120Hz refresh rate screen or 66W fast charging, it’s already standard equipment for mid-range phones, and it’s also a 4G phone.
is more concerned about businesses other than Huawei mobile phone . After a lapse of seven months, Huawei once again released a new energy vehicle, the mid-range SUV M7. The products that attract attention have shifted from mobile phones to cars, even if the car launch only takes up a small part of the conference time. This may become the norm for future Huawei conferences.
mobile phone sales data are so cruel. In the first quarter of 2022, Huawei will no longer be among the top five smartphone shipments in China and the world. This means that the migration of users from Huawei to other brands has come to an end. Compared with the decline of mobile phones, Huawei has a more urgent matter: looking for the next growth point.
The embarrassing car business
In Huawei's major offline stores, users are no longer surprised by the cars parked in the middle of the store.
M7 is the third car jointly launched by Huawei and Xiaokang Co., Ltd. subsidiary Cyrus. Its products not only use the three-power system and Hongmeng OS developed by Huawei, but the more obvious benefit is that this previously unknown brand has entered Huawei's offline stores across the country.
Cyrus is not the only host manufacturer Huawei cooperates with, but it has the deepest ties. Huawei's cooperation with car companies is divided into two modes: Huawei Intelligent Selection and Huawei Inside (HI, solution integration). In the former, Huawei will be deeply involved in product definition, component selection, system research and development, etc., and the products will enter Huawei stores. The HI model is for car companies to purchase modular solutions such as Huawei's smart cockpit, smart driving, and communication architecture.
Most manufacturers still choose the HI model where the sales rights are in their own hands. For example, BAIC's JiFox Alpha uses Huawei's intelligent driving system and Hongmeng cockpit. In fact, except for the hardware, the software is all Huawei's technology.
As a new company, Huawei’s HI model has not been promoted smoothly. The BAIC Polar Fox Alpha HI version has been released at the Shanghai Auto Show in mid-2021, but has not yet been delivered. The Avita 11, which Huawei cooperated with Changan and CATL , was difficult to produce, and there was no news about the sub-brand it cooperated with GAC for a long time.
Compared with the twists and turns of the HI model, the launch of models cooperated by Cyrus and Huawei in the "Smart Selection" model has been relatively smooth. In addition to software cooperation, this model also provides Huawei design, channels, mobile ecosystem and other services.
Huawei and Cyrus launched two products in half a year. However, because of the weak brand power of Cyrus, the current sales volume is also unsatisfactory. The first car they cooperated with, the SF5, sold only 8,086 units in 2021. If SF5 is just testing the waters, then the independent brand line AITO M5 did not become a hit. It was not until May this year that there was some improvement. In June, there was a large order of more than 10,000.
Yu Chengdong once made a bold statement that 300,000 M5s will be sold throughout the year, which is almost the annual sales volume of Hongqi Motors. Although his "big mouth" speech was successful in building momentum, facts proved that this goal was too optimistic. The M5 product encountered a chip shortage right after its release, and chip prices skyrocketed hundreds of times. When Huawei held an analyst meeting in April, Huawei's rotating chairman Hu Houkun admitted that the current annual sales target of 300,000 is difficult to achieve. Yu Chengdong also changed his mind: "We can't do 300,000 units at all. It's already a miracle to complete 100,000-200,000 units in the first year." The ruins of struggling manufacturers. Before Thales joined Huawei, it was only a fringe brand. In 2020, Xiaokang Co., Ltd., the parent company of Cyrus, sold 273,000 cars throughout the year, which was only a quarter of that of Geely. In 2021, the net profit attributable to the parent company was a loss of 1.824 billion. After cooperating with Huawei, Xiaokang Automobile's new energy line has indeed made some progress.As of May this year, their sales of new energy vehicles have tripled year-on-year.
Yet shadows of disharmony can still be seen in these two peers. Huawei has always emphasized that it does not build cars, while Xiaokang has tried its best to distance itself from the term "Huawei OEM", and its positioning is still unclear. Cyrus uses Huawei technology on a large scale and relies on Huawei to sell goods. It will inevitably transfer part of its production dominance, which is a taboo for car companies.
It is unknown how long Huawei can continue to use up its aura in the mobile phone industry in the automotive industry. After all, the well-off Thalys is a third-tier brand. The M7 is positioned as a mid-sized SUV with a price starting from 319,800 yuan. Although it is lower than the price of the flagship SUV of new forces, it is still expensive among Thalys products. Obviously Huawei hopes to use its own brand to compete with Cyrus.
Huawei may have overestimated the loyalty of its mobile phone users. "If you put the engine of Rolls-Royce into a tractor, it will definitely still be a tractor, not a Rolls-Royce." A retired Huawei executive described this to "Shenzhen Web" when talking about the current situation of cooperation.
Next stop
Huawei is desperately looking for a new direction to survive.
The decline of their mobile phone products is difficult to recover. According to Huawei's financial report, its consumer business revenue has fallen by half compared with the peak period in 2019.
Similar to other products, the nova 10 released by Huawei this time still only has a 4G version, and users can only barely receive 5G signals with the provided mobile phone case. The product
will hardly stir up much excitement in 2022. The overall market has begun to decline, with domestic smartphone shipments falling by more than 10% in the first quarter of 2022. Manufacturers are crazy about configuring mid-range phones in the 2000-4000 price range. In the same price range, the Honor 70 has a Qualcomm 5G chip, and the Redmi K50 Pro has a 100-megapixel Samsung camera and 120w fast charge. Even the OPPO Reno series, which focuses on offline, the latest product Reno 8 also has the selling point of self-developed chips.
Comparison, nova 10 only has 4G version, priced from 2699 yuan. For comparison, the just-released Honor html is priced at 32,699 yuan, and the OPPOReno 8 basic version is priced at 2,999 yuan.
In the past, nova was a profitable and popular product in Huawei's product line, with high gross profit. In the past, 2 million units of nova 5 were sold in one month. Nova 10, launched in 2022, is somewhat late in life.
Perhaps the worst has not yet come yet. Users in the domestic market are migrating from 4G to 5G, and 4G users still occupy a large market. When the migration is completed, if Huawei cannot solve the 5G chip problem, the mobile phone business will truly enter the winter.
During this window period, Huawei is desperately squeezing out water on other products. In the consumer business, revenue from smart wearables, smart screens, etc. increased by 30%, which can somewhat offset the sharp decline in mobile phone revenue. They also launched a new smart watch Watch FIT 2 at the press conference, equipped with Hongmeng system. But these products require mobile phones as the core. If the mobile phone business continues to decline, ecological products will also lose their support. As for whole-house customization, it is even more difficult to excel when the real estate market is down.
Their exploration extends to more hardcore areas. For example, in the photovoltaic industry, Huawei's inverter business has ranked first in the world, even surpassing the established manufacturer Vision Power.
In April this year, Huawei established ten more corps, covering fields such as power digital, government affairs, airports and railways, many of which are controlled by government departments. Their goals are obvious. Huawei MVP Ma Chao said in an interview with " Securities Times " that the new legion is to "expand into the more profitable enterprise-level market."
For Huawei now, mobile phones cannot be given up. It will still contribute to cash flow for a long time, but its future business focus has already quietly shifted. Perhaps in five years, Huawei will become an automobile service provider, government and enterprise service provider, and the brand of mobile phones will gradually fade away.
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