Description : The author of this article is Zhou Jiangui, a well-known business strategy expert. Combined with the practical strategic analysis of the four global smartphone giants: Apple , Samsung , Huawei , and vivo, it presents the global strategic competition for smartphones from multiple angles. The full text is about 7,000 words, and it takes about 30 minutes to read.
It goes without saying that Apple has become the ceiling for the development of Chinese mobile phone brands.
If we go beyond personal likes and dislikes and evaluate Apple without stance, it already has the characteristics of "imperial". According to the definition of Europe and the United States, empires can often dominate other countries. In reality, Apple's price policy can already determine the life and death of ecological partners and even competitors; according to Chinese cultural standards, empires are a huge political body that revolves around authority, and Apple has indeed endorsed smartphones to some extent. This company not only has world-class technology leaders like Jobs and Cook , but also has a huge ecosystem with absolute dominance. What's more, Apple has a profit of more than 90% of the global smartphone industry, which means it deserves its reputation as the "Apple Empire".
However, at the same time, beating it naturally became another great dream. There have always been brave challengers in front of Apple. Whether it is Samsung, who has fallen in love with him and has been fighting for many years, or Huawei, or Vivo, which has ranked first in China's mobile phone share for many consecutive quarters and has continued to make high-end breakthroughs, the challengers will never give up. What is particularly worth noting is that vivo, a low-key company that adheres to the "duty" evolution theory, is making obvious breakthroughs in imaging and other technologies. The unit price of products will increase against the trend in 2022, and the product power of X90 will ignite the entire network as soon as it appears. On the day after the press conference, the pre-sale volume of the full X90 series was nearly three times that of the X80 series in the same period. The rise of Chinese brands of high-end phones seems to indicate that a major change in smartphones is coming.
data is more intuitive. In 2022, the competition for smartphones in the Chinese market is unprecedentedly fierce, and high-end phones (wholesale price of 2,800 yuan and above) are competing with each other. data agency Counterpoint data shows that the overall market share of the total sales of high-end phones in high-end phones in China increased from 31% in the second quarter of 2021 to 33% in the second quarter of 2022. In the second quarter of 2022, vivo's high-end market share of 13%, second only to Apple, and the proportion of doubled year-on-year . The higher-end range ($600 to $799) driven by X80 grew 504% year-on-year. In the second quarter of 2022, the average sales price of vivo high-end products reached 6,170 yuan, and hit a new high. The data also clearly shows that Apple has a new challenger.
From this, we can already judge that in the 2023 China smartphone market competition, extreme external challenges and cruel competition will eventually end the balance of power, and high-end phones will surely determine the fate of the giants. In this article, we will strive to historically restore the current strategies and tactics of the three challengers of Apple's high-end products (Samsung, Huawei, and vivo) based on interviews with industry experts, manufacturers and front-line channels, and are committed to presenting readers with a vivid case of strategic competition around high-end phones.
Leader Apple: "Productism" superimposed on "revolutionary ecosystem"
Objectively speaking, the judgment that Apple has declined is hasty and misleading.
In the author’s column article published on FT Chinese in June 2022, “How can Chinese mobile phone brands win the “Innovation People’s War”? 》 mentioned a point that Apple has already superimposed the revolutionary software ecosystem strategy based on productism, and has upgraded from a conventional industry competitor to an invisible ability leader, and this process is almost driven by Cook. According to the e-commerce market monitoring of the famous data company Sandalwood (Rushen Data), the following table: From January to October 2022, Apple was in an absolute leading position in the market share of 4000-6000, 6000-8000, and 8000+, which established stronger barriers for challengers.
Sandalwood China CEO Sun Kai said in an interview that : "There is no shortcut to high-end, and it requires continuous high-intensity investment and lasting strategic patience. Finally, it establishes a voice and standard definition ability in the terminal industry, establishes a mental consensus in the minds of consumers, and at the same time puts a lot of effort around the consumer experience from products to services. From the perspective of market competition, Chinese brands have actually confronted Apple at the price of 4,000-6,000; and in the hinterland of 6,000+ Apple, domestic manufacturers have also entered the ultra-high-end market through sufficiently differentiated folding screen products, so they are still full of hope." But Xu Lin, a well-known technology media person, is cautious about this. He believes that challenging Apple's high-end is to be able to compete with both the software ecosystem and the hardware supply chain. At present, domestic brands do not have such conditions. But we can also see that the resolution has been accelerated in the past year, and the overall breakthrough will take time.
It is true that Apple is not only a super brand in general, but also a well-deserved "technology church" . As shown in the figure below, we can clearly feel the entire process of Apple's adherence to the innovative development of high-end technology brands.
Indeed, Apple is reaching its peak of evolution, and we can taste a few more details: Apple flagship store is directly managed by the US headquarters in all countries around the world. It not only has the design, construction, furnishings, and product release rhythms are highly consistent, but it is even exaggerated to the fact that every piece of wood or stone used for decoration must be airlifted from the United States to the local area, in order to maintain global consistency of user experience; all Apple flagship stores in the world are landmarks, such as the Louvre experience store in France, the Shinjuku experience store in Japan, and the Sanlitun experience store in the center of Beijing, China. This layout of the integration of experience store and famous scenes supports the strategic commanding heights of the super brand; Apple's online App There are currently about 1.64 million applications in the store, of which a large number of applications are unique to the Apple ecosystem, penetrating dozens of scenarios such as health, medical care, education and even military. The domineering lies in: Apple's rules are basically the global "law" in the field of technology, and " Apple tax " is determining the profits of more and more companies.
. The lack behind its strength is of course objective. We may call it "the weakness of the elephant" . In terms of hardware, Apple's basic communication capabilities have been criticized for a long time, that is, signal issues. Apple is not yet a top expert in the field of communications; in the field of imaging, it has only been in the last two generations of iphone, and its reputation has caught up with the Chinese brand, and it has been in a relatively lagging state for a long time. Moreover, in the charging battery life that Chinese local consumers are concerned about, Apple's battery life and charging technology have not made any breakthroughs for a long time.
It is reported that Apple currently only has 20W-30W power, and domestic flagships are generally around 100W, and even have 200W technology. In terms of software, the high pressure of Apple's taxes has actually not stopped the innovation of Super APPs. Applications such as Douyin /tiktok, Facebook , instagram , WeChat have already squeezed Apple's internal ecological applications, and have also put applications such as apple muscle, apple TV in a relatively embarrassing development state. To be honest, the stickiness of Apple's internal ecological has not continued to strengthen in the competition with Super APPs. In other words, although Apple is powerful, it is by no means omnipotent, and it is difficult to have a long-term dominance in the smartphone industry.
Based on the above analysis, we believe that Apple's challengers are not without a chance of success, but both Samsung, Huawei and vivo must have a more unique strategy to obtain strategic opportunities.
Challenger Samsung & Huawei: Branded operations persist in impacting high-end
In reality, Apple's strength does not really have the confidence to break through the challenger. To a certain extent, Samsung and Huawei have both had the experience of overtaking Apple.
Common knowledge is: There has never been any gods and emperors in business history, and the "empire" will inevitably be unable to escape the ultimate fate of prosperity and decline . Looking at the history of technology, powerful companies often decline because of indifference to marginalized innovation opportunities. The story of Nokia is from an invincible giant to a step down from the altar. Similarly, any seemingly perfect competitive advantage must have a clear logical opposite, which makes the differentiated development of competitors possible. The rise of the Microsoft empire only comes from a small mouse. So, what Samsung and Huawei think most clearly is that they must be highly differentiated from Apple's strategy, and find local differentiation advantages to get the reverse initiative.
pair, challenge giants must be brave and differentiated. Samsung is almost the first company to showdown to Apple. Not only can it launch a full range of products at a higher frequency, it also dares to invest heavily in in design and brand operations. Splitting off its structure, this company has the gene of US capital holding, supported by South Korea's national competitiveness, and its global localization strategy to face Apple is also very clear, which is to use a global value chain with more models, more configurations, and more product forms, and use the "innovation department store" people-friendly model to fight against the "technology church" with a strong aristocratic temperament. The following figure summarizes the "global value chain" strategy of Samsung mobile phone :
We summarize the overall strategic thinking of Samsung mobile phones based on Samsung Group brand into three key points : First, the fully localized corporate citizen strategy based on the global market layout, which makes Samsung surpass the Korean brand and become a global technology giant competing parallel with Apple; second, it is a full value chain that combines the comparative advantages of East Asia industrial chain , with high R&D investment, and maintains the leading device, which gives Samsung brand full low-cost manufacturing advantages to match the multi-dimensional competition of consumer electronics industry. The third is to insist on building high-end brands through branded operations, collaborating with the entire product line, and implementing "branded operations" through high-intensity performance orientation, supporting the high difference between multiple flagships, multiple series, multiple prices and multiple choices from Apple. shows that Samsung's strategic thinking on "global value chain" is highly differentiated, which lengthens the front line and competes with Apple for operational execution, and faithfully implements Plan B (Apple alternative) in the eyes of the global T (large operators).
It should be said that Samsung not only successfully surpassed Apple in its overall market share, but is also the only company in the world that truly competes with Apple's high-end products. However, the manufacturer that has launched the most violent impact in the past few years should still be Huawei . Looking back, Huawei's starting point for challenging Apple started with Mate7 around 2014. As a large-screen and business-oriented mobile phone, it just happened to catch up with the trend of Chinese government civil servants abandoning Apple, almost soaring into the sky to make the Huawei brand a mainstream configuration for political and business people. Later, in 2016, P9 established its leadership in the global imaging field due to its cooperation with Leica . At that time, it was the trough period for Apple's "real restore" mobile phone photography capabilities, and P9 was popular all over the world almost overnight. This makes the Huawei terminal team more confident on high-end phones, closely sticking to Apple in high-end strategy and completing a major reversal in the fourth quarter of 2018.
At the same time, with Huawei's rise, the high-end strategic breakthrough of the two giants, OV. In June 2018, vivo and OPPO quickly followed up and launched two high-end series NEX and Find X. This competition between Chinese brands challenging Apple's high-end phones is objectively initiated by Huawei and vivo and OPPO. Overall, starting from 2016, it has become an established strategy.
Today we will review the reasons why Huawei became a "brand totem" to achieve a phased breakthrough in high-end machines. Perhaps we can summarize the following four important reasons:
First, talent element .Huawei has had the gene of globalization since its operator business. Only its globalized people can integrate China's manufacturing capabilities and Europe's top technology and humanistic resources, and obtain positive feedback from high-end European consumers;
Second, globalized dividend . Huawei's R&D capabilities are derived from the American company management methods implanted by consulting companies such as IBM, and are in the stable period of Sino-US relations. This allows it to not only obtain the best materials and devices in the world, but also play the underlying R&D advantages in Kirin chip and OS operating systems;
, and re-invest in the brand . Huawei dares to make heavy investments in high-end brand operations compared to Apple, and learns the sinking methods of vivo and OPPO in the sinking of Chinese market channels, which has stabilized its position in the dual insurance of high-end brands with national brands;
is fourth, and high-level trading of . In fact, this is something that the outside world pays little attention, that is, Huawei China has made great contributions to the entire rise of Huawei brand. Its internal is called "one gun in the whole camp" multi-category, high-end, and holographic channel ecological trading thinking. This management technology is in a leading position in the industry. summary is shown in the chart:
Why is it said that "one gun in the whole camp" is an ignored factor of success? From the perspective of the author's close research and observation, Huawei has clearly confirmed three logics. First, without Apple's single model to compete in the world and high-end prices, it is bound to learn from Samsung's adoption of dual flagships and multiple categories; second, although Huawei's determination to invest in high-end brands is only a matter of financial numbers, the high gross profit brought by high-end brands is a strategic issue, and higher unit prices can also support the flagship to adopt better technologies and devices; third, China has a higher premium space under the support of economic level, especially the localization of ultra-high-end phones such as Porsche is extremely strong. But the opposite of the above three major logic is that multiple series of products are easy to bring channel inventory, heavily invest in brands to accumulate profits, and maintain a premium to Apple's ultra-high-end phones. Behind these challenges is the need for a high-level operation of "one gun in the whole camp" to ensure that every product is as good as "seafood" and reduces the company's financial risks.
We can already see Huawei's experience in challenging Apple's high-end phones. In summary, it is - firmly replicate Apple's high-end brand operation experience, benchmark and learn from Samsung's high-intensity product push and precision channel control, and maximize profits through high-level operation of "one gun in the entire camp" in China and create a "brand totem". Overall, this experience is also worthy of vivo's reference and inheritance of the overall market share advantage today.
Therefore, Samsung and Huawei collectively shine 2019 was Apple's bleakest time, and both of them truly broke the myth of Apple's invincibility.
Newborn vivo: "High-end strategy" is ready to go
From the current time node in 2022, vivo has become the largest dark horse of Chinese smartphone brands and rushed to the forefront of high-end phones challenging Apple. There is reason to hope for vivo.
At this moment, Samsung and Huawei's challenges to Apple's high-end phones seem to show signs of decline, while vivo, which continues to maintain the highest sales volume in the Chinese market, and the unit price of sub-brand iQOO, are rising rapidly. The strong growth of high-end phones makes vivo a major player in the new round of impact. Let’s follow the overall data performance of vivo in recent years, which also seems to verify the trend of vivo becoming the next Apple challenger . Data shows that when the X1 was released in 2012, the price was only 2,498 yuan, and by 2017, the high-end version of X20 exceeded 3,000 yuan, but after that, vivo became more and more hard-core and high-end, and this figure reached nearly 5,000 yuan in 2021. Since 2018, the sales of vivo products above 3,500 yuan have increased by nearly 100%. From the following figure, Sandalwood e-commerce market monitoring data shows that under the heavy pressure of the epidemic, vivo's high-end development has indeed risen rapidly.
However, objectively speaking, vivo has not yet reached the point where high-end phones are comparable to Apple, but the signs of a new generation of kings are undoubtedly revealed. If you want to stand out in the current high-end Chinese smartphone market, at least three conditions need to be met:
- The third is that the brand needs to reflect the necessary ideological leadership and technological leadership in high-end so that the mainstream political and business people and high-net-worth people in society can accept it, that is, strong brands and hard technology, and finally break the "high-end group" first to achieve "high-end". And behind it, we need a team with stable and strong execution to continue to make stable inputs and outputs, and use the idea of real "branded operation" to drive the company's overall progress. In other words, the road to becoming a high-end brand is destined to be very difficult.
Moreover, the high-end strategy requires long-term support from the company's major strategic determination. Recently, Hu Baishan, COO of vivo Group, talked about vivo's overall idea of "high-end strategy" many times in an external interview. He confidently believed that vivo's high-endization has reached an important explosion critical point and opportunities are magnifying. Hu said in the " China Brand Forum " hosted by the People's Daily that the fundamental opportunity of vivo's high-end strategy lies in the differentiated value of "user-oriented innovation". Specifically: From the perspective of vivo, Apple is the idea of global universal positioning, and the niche ultra-high-end flagships, high-frequency applications, cutting-edge trend follow-up, and localized innovation in the Chinese market have left a lot of room for Chinese companies to lead and catch up with.
Various signs also indicate that vivo is using "user-oriented innovation" as a secret weapon to achieve sustainable high-end breakthroughs. We have sorted out vivo's insights and ideas:
First of all, vivo believes that high-end challenges Apple needs to find asymmetric competition breakthroughs . At present, the most core breakthrough point in heavy investment is the imaging track, which is considered internally as a "coupled innovation point", which is the long-term investment track for the comprehensive capabilities of "software + hardware + tuning". It is reported that vivo's professional imaging team has now formed a team size of 1,000 people. From the perspective of vivo, professional imaging (hardware + algorithm) + productivity tools (improving personal productivity) may be two important opportunities for vivo to surpass Apple in functional applications in the future. Most vivo people confidently believe that the company's in-depth cooperation with Zeiss is greatly surpassing internal and external expectations, and on market feedback, vivo's professional image reputation is indeed rising rapidly;
Secondly, vivo believes that it is necessary to increase investment in highly differentiated localization innovation, such as the internal ecological software application that meets the characteristics of Chinese users and life scenarios. Among them, learning how Apple builds an ecosystem is the top priority, and the focus behind it is software applications. This requires enhancing the understanding and learning of the Apple ecosystem, opening up the pixel level of the system, three-dimensional and full-process, and making localized user-oriented innovation differentiation. One proof is that vivo serves 150 companies in a year to transform the commercial ecological environment user experience, and plans to complete the Top 500 in 5 years. This will make vivo far ahead in the office environment and ecological competition. This work has not been done in the industry at present. It can be seen that vivo has unique insights in localization and internal ecological software;
Once again, meeting the localization needs of high-end users and the flexible customization needs of ultra-high-end users is the fundamental advantage of Chinese mobile phone brands .This is particularly prominent in vivo's latest X90 series functional design. This phone not only fully integrates cutting-edge technological innovations, but also carries a number of self-developed technologies that users urgently need, such as self-developed V2 chips, 120W flash charging, ultra-retinal eye protection screen, and Zeiss professional imaging. Many experiences are very local and practical, such as the "atomic notes" application with Evernote style, so it has received unanimous praise once it was launched. Su Yi, a well-known technology industry expert, commented on the continuous breakthrough of vivo's high-end strategy: "In ten years, with the iteration of the X series, from the amazing X70 Pro+ to the stability of the X80 Pro, and now the surpassing of the X90 series, vivo's high-end has come step by step." He believes that the X90 series has promoted the changes in domestic high-end brands.
Finally, it is to consolidate the basic technical capabilities of hard technology base . In his speeches to the outside world, vivo executives repeatedly emphasized that "building a base that aligns with Apple" is the fundamental basis of technological leadership, solving the underlying problems of the Android open ecosystem, completely solving the problem of weak user experience, and forming two closed loops, "experience closed loop" and "commercial closed loop" as fundamental guarantees. A specific approach is: in vivo's underlying technology, it continuously optimizes the OS underlying technology, rewritten the computing power scheduling algorithm in the Android kernel Linux for more than 30 years, becoming an "unfair scheduling" algorithm, increasing the priority of front-end applications, and significantly improving the system's fluency;
or above clearly shows that vivo has systematic thinking and differentiated strategies in the high-end strategy. At the same time, vivo's important tool for "high-end breakthroughs" is also making unprecedented breakthroughs. seems to have formed an action roadmap for challenging Apple for high-end phones: first use vivo X Fold ultra-high-end phones and vivo X90 to break through high-end people, that is, win the trust of business people such as government and business; then base yourself on pursuing a full series of expected "high-end breakthroughs" based on the improvement of overall hard technology capabilities; and then strive to achieve the most important "high-end breakthroughs", which is to enhance user income (Benefits), where the top design is explicit income, and the system application experience is deep income; ultimately, it completely changes the past extensive brand investment model, promotes branded operations, and highly differentiates Apple to achieve high-end strategies. And accurately guide vivo brand actions through the coordinate system that guarantees value, demonstrates value, objective value and subjective value. Through interviews and research, we also summarized the "user-oriented innovation" strategy methodology of vivo from the external perspective of , as shown in the figure below:
It can be seen that vivo is in a state of breakthrough, and this company is full of self-challenge spirit and motivation for change. The roadmap of is indeed permeated with vivo's duty to plant causes, and its resilience and patience as an evergreen tree in technology companies. The entire team worked hard and pursued the distance as piously as the geese.
In summary, whether from the data or from the research and interviews, we deeply feel that a strong sense of confidence and grandeur is rising in the vivo team, which has always been low-key and introverted. Optimistically, in the upcoming 2023, China's smartphone market will definitely fall into a fierce knockout match, and high-end aircraft have huge opportunities. At present, the probability of Apple users flowing to high-end phones for domestic brands in the market with downgraded consumption has increased significantly. The attributes of high-end products as durable products are rising. In addition, Chinese brands have collectively led over Apple for three years in terms of ultra-high-end folding machines, and vivo has achieved internal and external conditions for the historic rise of high-end phone upstarts.
At the end of the article, boldly predicted: The performance of Chinese brands represented by vivo in the high-end mobile phone market in 2023 may greatly exceed expectations . As for whether this company can eventually become the ultimate challenger for high-end phones of Samsung and Huawei after Apple? This has become the most optimistic question in the current market's pessimistic expectations. Veterans have new thinking and heroes appear in troubled times. More people are seeing the tenacity and hope of China's high-end manufacturing industry in vivo.
The author is a well-known business strategy expert, CEO of Beijing Zhouzhanggui Management Consulting Co., Ltd., and strategic consultant of many global companies such as German Bosch .
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