Author: Jin Lun
html On August 11, I didn’t watch Lei Jun’s speech because I was busy that day. Several friends forwarded the live broadcast to Moments that day, but I didn’t click on it. Due to work reasons, I read Lei Jun's speech afterwards. html On August 12, Xiaomi 's stock fell all the way after Hong Kong stocks opened higher, closing slightly up 0.5%. Lei Jun's speech flooded the screen, but the market remained calm and cruel.'s strong marketing efforts do not mean that its products are powerful. In his speech, Lei Jun talked about three life lows and then rebounded.
I think this is Lei Jun’s fourth low point in life, because Xiaomi’s difficulties have just begun.
1
Xiaomi's profits continue to decline
Analysts expect that Xiaomi Group 's revenue in the second quarter of 2022 will be 71.444 billion yuan, a year-on-year decrease of 18.6%; the adjusted net profit will be 2.162 billion yuan, a year-on-year decrease of 65.8%.
And this is just a continuation of the decline in the first quarter:
Xiaomi’s first-quarter revenue was 73.4 billion yuan, down 4.6% year-on-year, and its adjusted net profit was 2.9 billion yuan, down 52.9% year-on-year; its gross profit margin was 17.3%, down 1.1% year-on-year. .
The decline in the first quarter is the first year-on-year decline in quarterly revenue since Xiaomi went public in 2018. Xiaomi officially stated that it was affected by factors such as the epidemic and chip shortages, coupled with continued decline in consumer confidence and a weak mobile phone consumer market, resulting in a decline in mobile phone shipments and revenue. Is this really the case with
? Take a look at the first quarter data:
"Bankless Times" recently published an analysis report, giving some smartphone shipment data among major companies in the first quarter of this year.
Samsung Electronics supplied 73.6 million smartphones in the first quarter of 2022, with a global market share of 23.4%; while the second-placed Apple had global shipments of 56 million units, with a market share of 18% . Apple's sales increased by 2.2% year-on-year, and Apple was the only manufacturer to achieve positive growth.
Xiaomi ranked third with a market share of 12.7% (39.9 million units shipped). The report pointed out that Xiaomi’s market share fell by 18% year-on-year.
According to statistics from CINNO Research, only 67.2 million mobile phones were shipped domestically in the second quarter of this year, a year-on-year decrease of 14.7%. But there are also surprises. The shipment volume of Honor has increased significantly.
IDC announced the latest second quarter mobile phone shipment ranking data: Honor ranked first, with shipments of 13.1 million units, accounting for 19.5% of the market share, a year-on-year increase of 88.6%. vivo, OPPO, and Xiaomi ranked second to fourth respectively, and American Apple ranked fifth. Only Honor and Apple achieved positive growth.
Even if the reports and data are biased and watery, judging from Xiaomi’s official statement, it is true that Xiaomi’s mobile phone sales have declined, but not all mobile phones have declined. Honor and Apple are still strong.
What does this mean? It shows that and of Xiaomi mobile phones are not under pressure and have long been forgotten by everyone.
How are Xiaomi’s products? I have used two Xiaomi phones, and compared with Apple and Honor, I don’t think they are that powerful. I am also using Xiaomi's power strip, which I bought a few years ago. To be honest, it is very difficult to use. It is not easy to insert it in and it is not easy to pull it out.
I have no bias against Xiaomi. I even recognize Lei Jun as one of the rare calm and handsome leaders of Internet companies. He is willing to endorse and do marketing for the company, and he does it very hard. In fact, he has surpassed 99% of entrepreneurs at the same level.
However, a company ultimately relies on its products to speak for itself. If your products are mediocre, the market and customers will abandon you.
2
Xiaomi lacks excellent core competitiveness
I thought I was the only one who felt that Xiaomi products were not easy to use. As a result, a bunch of netizens followed up and complained:
"I have been buying Xiaomi products for more than two years, from mobile phones to bracelets to electronics. When it comes to TV boxes, it can only be said that the quality control is poor, the software logic has problems and there are constant bugs. It can only be said that you get what you pay for, and there is no added value to the brand."
"I bought an Xiaomi power bank , which is exactly the same as the one given to me by EVE. When I took it apart and saw that the control board inside has the same material number, it is an OEM product, and it is still a mid- to low-end product. Xiaomi product strategy How much care can you put into making products there?"
"Last year I spent nearly 7K to buy Xiaomi Mi 11 Ultra. It was too hot to play Xiaomi. The last one was Juhua M9 Porsche . It was all IQ tax. By the way, I also spent 699 to buy Xiaomi's . Noisy headphones , not long after listening, the sound was distorted, there is a reason why the stock price is like this."
"Everyone around me who bought a Xiaomi phone complained about it. I bought a Mijia thermostatic kettle before, and it leaked. Can you imagine that the kettle leaked?"
You see, everyone is talking about Xiaomi's product problems. , no one said that Rebus speech is not good. Xiaomi's stock price has dropped from more than 25 Hong Kong dollars to about 12 Hong Kong dollars in the past year. What is the reason?
Everyone feels that Xiaomi lacks excellent core competitiveness, and too many OEM products that are far away from its core advantages have overdrawn the credibility of the Xiaomi brand.
Can you imagine Apple making kettles or power strips?
It’s not shameful to make a power strip. It’s not bad if you make Bull . Bull made a power strip and achieved a market value of 86 billion yuan with a price-earnings ratio of 30 times, which is higher than Xiaomi’s price-earnings ratio of 22 times. Isn’t it good? Awkward?
When Lei Jun talked about how to find ideas for making popular products, he shared his experience in developing "Getting Started with Computers" and concluded, "We must make products that users need, rather than making products that just look high-end." Because "As long as we can make products that users want, sales will not be a problem."
It is always right for enterprises to meet user needs, but what do users need? I think what users need is a mobile phone that is less troublesome to use, a mobile phone that does not get hot when playing Xiaoxiaole, a power strip that is easy to plug in, and a kettle that does not leak.
But, has Xiaomi done it?
Lei Jun believes that Xiaomi is a technology-based, cost-effective company that makes the coolest products.
He announced that the company will invest 13.2 billion in R&D in 2021, and this year it is expected to be 17 billion, with a compound growth rate of nearly 40%. In the next five years, a total of 100 billion will be invested in R&D expenses. This is Xiaomi's emphasis on future technological innovation. Now Some of the new technologies can only be at ease if you have them firmly in your hands.
These are all very good, but as users, we only care about, you have invested so much money, how are you better than your opponents at the same level? As an investor, what I am more concerned about is whether the quality control will be strengthened and the product experience will be better after the company spends so much money.
Xiaomi is actually a little panicked and even getting more and more impetuous.
relies too much on the boss's annual chicken soup conference to drive sales. This is forgetting the original intention.
Xiaomi wants to increase profits and profit margins, stop focusing on short-term revenue fluctuations, continue to shorten its product line, and focus on the company's core products and core businesses. Jobs will not sell dishwashers and fans.
In order to maintain a good revenue figure, Xiaomi continues to extend its product line. This is a wrong strategy.
The indicator for measuring a company's competitiveness is not "the ability to pay the entire group's salary for 18 months at any time", or "at least enough to pay 20.5 months, and a maximum of 66.3 months". These are all excessive efforts in public relations, or even use in the wrong direction. It’s whether your product experience is good enough to make users chase your new products every year. If it’s good, your profit margin will far exceed that of your peers.
In 2021, Xiaomi's annual revenue will be about 328 billion yuan, and its profit will be about 19.3 billion yuan.
Apple’s full-year net profit for fiscal year 2021 was US$94.68 billion, equivalent to 639.09 billion yuan, which is equivalent to the profits of 33 Xiaomi groups.
will strive to build its core competitiveness in order to become a first-class enterprise.
3
Xiaomi faces multiple pressures when building cars
Apple has given up on building cars because it is too difficult to build a distinctive new energy vehicle. In the past eight years of building cars, Apple has experienced changes, chaos and difficulties, but still gave up.
Originally, Apple was working hard to build L3 to L5 electric self-driving cars.However, the ideal is very full, the reality is very skinny, and Apple’s self-driving test results are very average. Musk once said bluntly, "Compared with mobile phones or smart watches , cars are very complex. You can't go to suppliers like Foxconn and say, 'Build me a car.'"
cannot make god-level products Just give up. This is a sign that Apple cherishes its "feathers" and won't make do with it. If it doesn't make do, the products produced by Apple must be high-quality. Of course, the price is high, and the profit is also high.
Huawei also said that it would not build cars. I know this is very troublesome.
However, Xiaomi said "I want to build a car", and Xiaomi regards autonomous driving as a breakthrough direction for smart electric cars . Currently, the first phase of Xiaomi’s autonomous driving project has planned R&D expenses of 3.3 billion yuan, and the dedicated team has exceeded 500 people.
Lei Jun announced a video of the results of Xiaomi's autonomous driving team in his speech. Some senior automotive researchers believe that it is still relatively rudimentary. Lei Jun himself said: "Currently, our progress is very fast, and there may still be a big gap compared with our competitors. But it far exceeds my personal expectations.”
Lei Jun’s goal is obviously to self-research the whole stack and master the core technical capabilities, but can it be achieved? Is it more likely that , Tesla, or other domestic manufacturers that have come to an end will do it first? Apparently yes.
also has a cost and price issue.
An important threshold for making new energy vehicles now is whether you can get batteries at a suitable price. The prices of raw materials such as lithium, nickel, cobalt, lithium hexafluorophosphate , separators and even graphite are constantly soaring,
Chairman of Guangzhou Automobile Group Zeng Qinghong ridiculed at the World Power Battery Conference: "The cost of power batteries has accounted for 40%, 50%, and 60% of our cars, and it is constantly increasing. So am I not working for CATL now?"
CATL responded Said: Although our company has not lost money this year, it is basically struggling on the edge of making a slight profit, which is very painful. CATL’s financial report for the first quarter of this year showed revenue of 48.68 billion yuan, a year-on-year increase of 153.97%; net profit attributable to shareholders of listed companies was 1.493 billion yuan, a year-on-year decrease of 23.62%.
From January 2021 to March 2022, the average price of cathode ternary lithium materials soared from 124,000 yuan/ton to 368,000 yuan/ton, an increase of 196.8%;
The average price of lithium iron phosphate materials increased from 40,000 yuan/ton It climbed to 162,000 yuan/ton, an increase of 305%.
Xiaomi will face no less pressure than Guangzhou Automobile Group in making cars. After car prices go up, will the market be able to take over and continue to grow at a high speed?
When it comes to building new energy vehicles, in addition to stuck chips, some important parts of motors and electronic control systems also rely heavily on imports.
Xiaomi is not only facing a huge technological breakthrough bottleneck in making cars. Without breakthroughs, there will be no premium. It is also facing pressure from rising prices or shortages of raw materials and parts.
car can be built, what are the chances of winning? What's the profit? How does it rank?
To be honest, if there is no miracle, it will be difficult for Xiaomi cars to rank among Xiaomi mobile phones. Can it really create much profit?
Most car manufacturers are now losing money: the 2021 financial report shows that Weilai has a net loss of 4.02 billion yuan, a year-on-year decrease of 24%; Xpeng Motors has a net loss of 4.86 billion yuan, a year-on-year increase of 78%; Ideal Automobile 's net loss was 320 million yuan, a year-on-year increase of 111.9%.
Xiaomi has a lot of room for imagination when building cars, but it is difficult to make money.
Faced with Lei Jun, who was talking eloquently at the press conference, many people were cheering and forwarding his quotes and videos, but how many people knew that Xiaomi’s difficulties had just begun.
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